It is well known that there are many options for property and property owners to turn the current tax advantages into valuable money. But hobby gardeners can also ask the tax authorities to pay with their annual tax return and save a lot of money completely legally. The basic requirement is that the tax return submission deadline must be adhered to and any refunds can only be claimed for the previous tax year.
How can hobby gardeners optimize their tax returns?
Hobby gardeners can deduct costs for gardening work as household-related services or craft services in their tax return. Here, 20% of the wage costs or a maximum of €1,200 for gardening work and €2,000 for one-off craft services are tax deductible.
From this year, for the first time, you have until July 31st to submit the documents for 2017 to the tax office. If a tax advisor is commissioned, you can even do so until the end of February 2019. In addition, from 2018 there will no longer be any requirement to provide documents. The documents such as receipts, invoices and bank statements only have to be kept and transmitted upon written request from the tax office.
How garden design becomes an “extraordinary burden”
The tax benefits can be claimed by homeowners and their tenants as soon as they commission gardening work. It doesn't matter whether it's about redesigning the garden or creating a new one. However, there are a few important principles that you still need to keep in mind so that you can actually expect a refund:
- The owner must live in the house belonging to the garden himself. This can also be a holiday home that is not usually used all year round and the property can even be located in other European countries as long as the main residence is within Germany.
- The gardening work taken into account may not take place at the same time as the construction of a new house or winter garden.
- A maximum of 20 percent of the accumulated wage costs per year plus a maximum of 1,200 euros can be deducted from tax.
In addition, the legislature defines important differences regarding the definition of household-related services and craft services, which must also be broken down on the tax return according to the type actually incurred.
Handicraft services & household-related: the difference
Household-related services may return at certain time intervals. A good example of this is mowing your lawn, which is done periodically by household members or commercial helpers. 20 percent of 20,000 euros would be deductible from your annual tax, which corresponds to a refund amount of 4,000 euros per year. Craft services provided by companies, on the other hand, have a unique character, such as repairing a boiler, building a new terrace on the house or building a well for water supply. The invoiced labor costs, materials and rental costs for construction machinery can be recorded. The maximum amount per year is 2,000 euros. If higher costs arise, you can work with partial invoices or deductions over two years.
What else is important for tax relief
Please note that neighborhood help cannot be taken into account here, as craft work must always be carried out by a registered company. Costs that arise outside of your property, for example when clearing snow from the sidewalk or trimming hedges on community land, do not have a tax-reducing effect. Keep both the invoices AND the corresponding bank statements for at least two years. Avoid paying cash on receipt and instead use bank transfers to pay your handyman bills. For larger construction projects on the property or in the garden, a consultation with the tax advisor can be helpful.
