Moving can be expensive, whether you're relocating for a dream job, expanding your family, or facing health-related challenges. The good news is that many moving expenses can be claimed as tax deductions in Germany, provided you meet specific criteria. Here’s how to deduct your moving costs and maximize your tax refund.
Where to deduct moving expenses in your tax return
Moving costs are categorized differently based on the reason for your move. Here are the primary categories:
Work-related expenses (Werbungskosten)
Extraordinary burdens (Außergewöhnliche Belastungen)
Special expenses (Sonderausgaben)
Household services (Haushaltsnahe Dienstleistungen)
Business expenses (Betriebsausgaben)
Each has its own rules and requirements.
Work-related moves: Deducting moving costs as work expenses
If your move is job-related, the expenses can be deducted under work-related expenses (Werbungskosten). Common scenarios include:
Reduced commute time by at least one hour daily.
Starting your first job.
Relocation due to a transfer or change in your company’s location.
Moving related to dual household management (maintaining a second residence for work).
Moving into or out of employer-provided housing.
To claim these deductions, you’ll need proof, such as a new employment contract or a statement from your employer.
Eligible moving expenses include:
General Costs:
Travel costs for house-hunting and preparation.
Packing and transportation.
Double rent payments for up to six months.
Broker and viewing fees.
Repairs for transport damages.
Tutoring costs for children relocating to a new region.
Lump sum allowances: If you are not documenting every expense, you can claim a standard moving allowance, which varies based on your household type. In 2022 these allowances were:
For married couples: 1.476 €
For singles: 886 €
Per child/dependent: 590 €
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Private moves: Deducting household services
If your move is private, you can still claim certain costs under household services. These include:
Hiring a moving company.
Installing fixtures such as lighting or appliances.
Repairs in your previous home, such as painting.
You can deduct 20% of these costs, up to a maximum of €4,000, provided you pay via bank transfer and retain invoices.
Extraordinary burdens: Health-related or forced moves
Some moves aren’t voluntary. If you’re forced to relocate due to health issues, such as requiring proximity to a clinic or needing an accessible home, you can claim these expenses as extraordinary burdens. Examples include:
Relocation costs due to a natural disaster (e.g., floods).
Moves required due to medical conditions, supported by a doctor’s certificate.
You may deduct expenses exceeding your personal burden threshold.
Freelancers and self-employed: Moving as a business expense
Moving costs can be deducted as business expenses for freelancers and self-employed, provided they are essential for business operations. Examples include:
Expanding to a larger office.
Relocating closer to clients or business partners.
Ensure you maintain clear documentation proving the business necessity of the move.
What you can’t deduct
Not all moving costs are eligible for deductions. Common exclusions include:
New furniture purchases.
Storage fees for furniture.
Renovations in your new home.
Costs related to homeownership, such as real estate agent fees for buying a house.
First-time job moves: Special expense deductions
If you’re moving for your first job after university or training, the costs are considered special expenses (Sonderausgaben) rather than work expenses. Note that:
Moving expenses are not eligible for loss carryforwards in these cases.
The standard allowance is reduced if you move from your parent’s home.
Optimize your tax return with Norman
Handling moving expenses and tax deductions can be daunting, but automation tools like Norman make the process seamless. Here’s how Norman helps:
Automatically categorizes your moving costs based on their nature (work-related, health-related, or private).
Calculates the optimal deduction amount, including lump sum allowances and specific costs.
Keeps you compliant with the latest tax regulations.