Moving Expenses for Income Tax Purposes
MOVING EXPENSES INCURRED FOR WORK-RELATED REASONS ARE DEDUCTIBLE AS EMPLOYEE EXPENSES
Expenses incurred by an employee due to a work-related move are deductible as income-related expenses.
WORK-RELATED REASON
A change of residence is considered work-related only if the total daily commute time between home and the workplace (round trip) is reduced by at least one hour. The same applies if the move is carried out in the overwhelming interest of the employer, particularly when moving into or out of company housing. Tax benefits also apply if the move is due to the employee’s first taking up employment, a change of employer, or in connection with a transfer.
DEDUCTION OF COSTS
The following costs are deductible, provided they have not been reimbursed tax-free by the employer:
- Travel expenses for searching for a residence, preparing for, and carrying out the move
- Transportation and moving costs for furniture
- Expenses for damage incurred during transport
- Additional meal expenses
- Double rent payments
- Brokerage fees for renting the new apartment. However, such fees incurred in connection with the purchase of an apartment at the new place of employment are not deductible
- A lump-sum allowance for other moving expenses (renovation materials, curtains, blinds, lamps, telephone connection, connection and installation of a water heater) in accordance with the current provisions of the Federal Moving Expenses Act. This currently amounts to 1,374 euros for married individuals, 687 euros for single individuals, plus 306 euros for each child and additional person in the employee’s household.
Outlook
If the move is for personal reasons, at least the costs for tradespeople’s services in the new home can be claimed as household-related services, with 20 percent of the expenses—up to a maximum of 1,200 euros—deducted directly from the tax liability.
