Dual household without own residence
September 5, 2009 | 60,00 EUR | answered by Oliver Burchardt
I have my primary residence at my grandparents' house (2 rooms, approximately 30sqm, kitchen and bathroom for common use, no rental agreement - but sole usage rights, no rent payments made by me, there is a household insurance in my name). Due to my job, I moved into an apartment near my workplace in August 2005 (fixed-term employment contract until August 2007, then permanent contract). I claimed the double household management for the period 08/05 - 08/07 in my income tax return and it was accepted without any issues.
When submitting my income tax return for 2008, I again claimed the double household management, as I read that it is no longer limited to two years. This has led to my tax office examining the circumstances of the double household more closely and requesting proof in the form of a rental agreement or land register extract from my primary residence, which unfortunately I cannot provide as described above. Additionally, the tax office wants an explanation as to why I did not do this for the months 08/07 - 12/07 (simply due to ignorance!).
Now my question is how to best argue my case, as I fear that they will retroactively deny the double household management to me (partly due to lack of evidence and the absence of my own kitchen). Is it possibly even an option to submit a corrected income tax return for 2008 (and the years before) stating that the double household management existed without having my own household (i.e. only claiming the kilometers between my primary residence and workplace without costs for the apartment at the secondary residence)?
Oh, and it is verifiable that my primary residence is my center of life (club activities, gas receipts, relatives and friends).
Thank you in advance!
Dear inquirer,
Thank you for your question, which I would be happy to answer as part of an initial consultation.
Please note that the answer to your question is based on the information you have provided. Deviating facts may potentially lead to a different tax assessment.
One of the requirements for the recognition of a double household management is having a separate household.
According to established case law of the Federal Fiscal Court (BFH), a separate household exists when you use the apartment on your own right. The tax authorities impose higher requirements for children (or in your case, as a grandchild). A rental agreement is not necessary. However, you must occupy your own apartment in your grandparents' house. An apartment exists when it has its own sanitary facilities and cooking facilities.
Based on the information provided by you, it appears that you do not establish a separate household at your primary residence, resulting in the fact that a double household management is not actually present.
However, it could be argued that you maintain a household by taking in your grandparents due to a possible need for care. This would need to be proven in detail.
For the assessments of the years 2005 to 2007, it is important to note that the tax office cannot simply change the tax assessments. This requires an amendment provision. Section 173 (1) No. 1 AO could be relevant in this case. Facts must subsequently become known that lead to higher taxes. You have indicated the double household management in your tax returns. The tax office has apparently assessed in accordance with your information. If there were doubts at that time, an investigation of the facts should have taken place during the assessment. The assessment cannot now be changed retroactively because the tax office could have easily determined the circumstances through fact-finding at that time. In my explanations, I assume that the tax assessment was not issued subject to review (this is the usual case for non-self-employed individuals).
Therefore, you do not need to fear that the tax office will retroactively change the assessments. If this were to happen, please file an appeal against the amended assessments with the above justification.
I recommend explaining the circumstances of the household management to the tax office. As mentioned, a rental agreement is not mandatory, but it is important to demonstrate that you occupy your own apartment in your grandparents' house convincingly to the tax office.
If the tax office denies the double household management for the year 2008 due to the lack of a separate household, you can still claim the deduction for commuting expenses from your primary residence to the place of employment. This deduction should be considered regardless of the question of a separate household.
I hope this answer has been helpful to you. If you have any further questions, please feel free to use the free follow-up function.
Best regards,
Oliver Burchardt
Tax Advisor
