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Proportional costs of the home office in the modernization measure

January 16, 2017 | 30,00 EUR | answered by StB Steffen Becker

Hello,

I am a freelancer and have a recognized "100% home office" (without limitation). We have had the heating system modernized and received a KfW subsidy (430) for it. In the application we signed, it says:

"No tax deduction according to §35a paragraph 3 EStG (tax reduction for craftsman services) is possible for measures supported in this program."

I understand that this is to prevent double funding and that I cannot claim the craftsman costs (labor costs) in the tax return for the "total house," but I also have my expenses for the home office to consider.

My questions are:
1) Can I still claim the modernization costs as partial costs of the home office in the tax return despite the mentioned paragraph in the KfW application?
2) Do the expenses for craftsmen related to the home office not count as §35a and therefore do I not violate my own KfW application?
3) If it is possible, am I allowed to claim labor costs + material costs proportionally for the home office or only one of them?

Thank you in advance!

StB Steffen Becker

Dear inquirer,

Thank you for your inquiry. I will answer it as part of an initial consultation based on the information you have provided. Missing or incorrect information can affect the legal result.

You are not allowed to deduct labor costs as artisan services according to § 35a EStG.

However, you can deduct the proportionate maintenance expenses (materials + labor) related to the home office, minus the partial funding received from KfW, as operating expenses. This way, you will not violate the KfW application.

I hope I was able to assist you further.

Kind regards,
Steffen Becker
Tax advisor