Double Housekeeping: Costs of Living

Double housekeeping for work-related reasons exists if the employee both lives at the place of work and maintains his or her own household at another location. Double housekeeping is regularly checked separately by the tax office, as this enables a further and usually not insignificant deduction of income-related expenses - in particular accommodation costs or journeys home to the family (Section 9 (1) sentence 3 no. 5 of the German Income Tax Act (EStG)). The prerequisites are essentially the occupation of an apartment and a financial contribution to the costs of living. In its ruling of January 12, 2023 (Case No. VI R 39/19), the German Federal Fiscal Court clarified how this latter criterion is to be interpreted.

In the case in dispute, an employee maintained a rented apartment near his place of work. In addition, he and his brother lived in an apartment on the upper floor of their parents’ house outside the place of work, which had been left to them free of charge by their parents, who lived on the ground floor. The two apartments were not structurally separated from each other, but were connected to each other via a staircase from the main entrance of the house. Although the employee did not contribute to the ongoing house and ancillary costs, in December of the year in dispute he transferred an amount of EUR 1,200 with the purpose of use “ancillary costs/telecommunications” and an amount of EUR 550 with the purpose of use “share of new windows in 2015” to his parents and purchased food during the year in the amount of approx. EUR 1,400. However, the tax office rejected the application for double housekeeping for work-related reasons with expenses of around EUR 8,000 as part of the income tax return, because sufficient financial participation in the joint household of the parents and brothers had not been proven. Both the tax court of first instance and the German Federal Fiscal Court took a different view.

In principle, a taxpayer has an apartment that forms the center of his or her life if he or she uses it under his or her own right - for example, as owner or tenant. However, a derived right in the sense of a protected legal position may also be sufficient. This is particularly the case if the spouse, partner or another family member - such as the taxpayer’s parents in the present case - is the owner or tenant of the apartment and leaves it to the taxpayer for (free) use. The decisive factor for the criterion of the center of life is always that the taxpayer essentially stays in the respective apartment with the exception of absences due to work or vacation; keeping an apartment for occasional visits or vacation stays, on the other hand, is not sufficient.

Furthermore, the taxpayer must be regarded as a part that essentially determines or co-determines the household management. In other words, he or she must not merely be integrated into another household, as is often the case with young employees who continue to live in their parents’ household after completing their education. In the case of older, economically independent, employed children who live with their parents or one parent in a joint household, it must be assumed that they have a decisive influence on the management of the household, so that this household can be attributed to them as their “own”.

The existence of an own household further requires a financial contribution to the costs of living. This includes, in particular, the costs that must be incurred for the use of the living space or that arise from its use (e.g. financing, rent, operating and other ancillary costs), as well as the other costs of household management in the home (e.g. expenses for food, telecommunications, etc.). Not included, however, are expenses for clothing, vacations, leisure activities, cars and health care.

With regard to cost sharing, however, the law neither provides for a specific limit in terms of an amount, nor that it has to be an ongoing contribution in the sense of a rent-equivalent payment. The taxpayer may therefore also participate financially in the costs of household management by making one-off payments - including those at the end of the year. However, household participation in any other form (e.g. by taking over household work or services) is not sufficient in this respect. Also, the financial participation of the taxpayer in the costs of the (main) household must not be recognizably insufficient. For this purpose, the household and other living expenses actually incurred in the year serve as a standard of comparison, which the taxpayer must present and, if necessary, prove. Costs that are regularly incurred in fluctuating amounts (such as, in particular, for food and other household necessities), can generally be estimated with recourse to empirical statistical values.

Applying these legal principles, both the existence of double housekeeping and sufficient financial participation of the employee in the joint household management were to be affirmed in the case in dispute.


In deviation from the ruling of the German Federal Fiscal Court, the requirement of financial participation is only to be met if a de minimis threshold is exceeded, according to the tax authorities. This means that the employee’s cash contributions would have to account for more than 10 % of the monthly running costs of the household. It now remains to be seen whether the tax authorities will follow the simplifying legal opinion of the German Federal Fiscal Court.