Building cost subsidy – public collection networks – no tax reduction

For the claim

of craftsman services for renovation, maintenance and modernization measures, a tax reduction of 20% of the expenses, but no more than 1,200 euros per year, is eligible. Craftsman services that are performed beyond the property boundary on third-party – e.g. public – land may also be eligible if the work is performed in direct spatial connection to the taxpayer’s household and serves the household. Up to now, the tax authorities have not considered measures provided by the public sector or a third party commissioned by it to be beneficiaries.

The Federal Fiscal Court

In an earlier ruling, the Federal Court of Justice considered the costs of connection to the public supply network to be a tax-privileged tradesman’s service and recognized the expenses for making the house connection .

In a recent decision

the court no longer considered the spatial-functional connection to the household to be given if a construction cost subsidy is charged for the new installation of a combined water pipe as part of the public collection network; a tax reduction can therefore not be considered in this respect. The court stated that the construction of the actual (beneficiary) property connection begins at the branch point of the collection line and ends at the property boundary.
Accordingly, the Berlin-Brandenburg Fiscal Court assumes for traffic connections that only the property access roads from the branch off the actual road are beneficiaries. Road improvement fees should not be considered, he said, because the public road is not household-related.

(Further comments & information on this can be found in our information letter 08/2018 under the item 6.)