Relocation costs may be incurred for job-related reasons and thus be deductible as income-related expenses for tax purposes if the change of home leads to a significant facilitation/improvement of the working conditions. This is the case, for example, if the relocation had to take place due to a change of job or if - even without a change of job - the time required to commute between home and place of work has been significantly reduced as a result of the relocation. In its ruling of February 23, 2023, Case No. 5 K 190/22, the Hamburg Fiscal Court addresses the question if a significant facilitation/improvement of working conditions also occurs if the change of home gives the opportunity to work in a home office.
In the case in dispute, two spouses performed their respective non-self-employed (office) work in 2020 for lack of other options, initially at the dining table at home in their three-room apartment of approximately 65 m², which they occupied together with their five-year-old daughter. Against the background of the ongoing Corona-related restrictions, the family relocated to an approximately 110 m² large five-room apartment in May 2020, which allowed for the establishment of two home offices; however, the previous respective commute of both spouses remained approximately the same length. The costs for a respective home office declared in the income tax return for 2020 were recognized by the tax office; however, it rejected the likewise declared relocation costs for lack of a job-related reason. The Hamburg Fiscal Court took a different view.
According to this, the relocation in the case in dispute was objectively caused by the job and subjectively intended to support the job. This was because it was only made possible - in particular during the Corona-related restrictions - for both spouses to carry out their non-self-employed activities without interruption. The argumentation of the German Federal Fiscal Court in its ruling of October 16, 1992, Case No. VI R 132/88, according to which a change of home is not caused by job-related reasons if this provides space for setting up a home office, but the commuting times between home and place of work are only reduced by less than one hour per workday, is not supported by the Hamburg Fiscal Court due to the changes in working conditions over the years. While the above decision of the German Federal Fiscal Court is still based on the assumption that, in principle, a person has to go to the place of work every working day, the world of work has become increasingly flexible in recent years - and this was already the case in the year in dispute - due to individual home office arrangements. The legislator has taken this development into account, among other things, through the home office allowance implemented in the long term with the Annual Tax Act 2022.
Furthermore, the new apartment did not differ significantly from the previous apartment in terms of furnishings and comfort, but was merely spatially expanded to include the two home offices. Consequently, in the opinion of the Hamburg Fiscal Court, the associated relocation costs are deductible as income-related expenses in the income from non-self-employment.
Notice:
The Hamburg Fiscal Court has allowed an appeal, which is pending with the German Federal Fiscal Court under Case No. VI R 3/23. Comparable cases should therefore be kept open until the decision of the German Federal Fiscal Court