An electrician and a painter renovating an empty Berlin period apartment

Tax deduction for tradesmen in Germany – how §35a works

WohnWork Services · Last updated: 26 September 2026

In Germany, labour costs for repairs, renovation and maintenance in your own home reduce your income tax directly: under §35a(3) of the Income Tax Act (EStG) you deduct 20% of the labour cost, up to €1,200 a year. Labour, travel and machine costs count; materials don’t. You need an invoice and must pay into the company’s bank account.

How much does the tradesmen tax credit save?

This isn’t a deduction from your income – it comes straight off the tax you owe. Every euro you’re entitled to lowers your income tax bill by exactly one euro. The tax office credits 20% of the eligible labour cost, capped at €1,200 per year. You hit that cap at €6,000 of labour.

An example with round, made-up figures: an invoice shows €500 labour (travel included) and €300 materials. Only the €500 counts. 20% of that is a €100 tax reduction. The materials don’t count.

One catch: the credit only helps if you actually pay income tax. If your tax for the year is zero, there’s nothing to reduce, and the credit isn’t paid out.

€500 labour × 20% = €100 off your tax
€2,000 labour × 20% = €400 off your tax
€6,000 labour × 20% = €1,200 – the annual maximum
€8,000 labour × 20% = €1,600, capped at €1,200

Trade services vs household services – what’s the difference?

§35a has two separate pots. Trade services (paragraph 3) cover renovation, repair and modernisation: fixing things, painting, servicing the heating, electrical and plumbing work. Household-related services (paragraph 2) are jobs a member of the household could otherwise do, such as cleaning the flat or looking after the garden.

You can use both caps in the same year, but each invoice goes into one pot only – the same cost never counts twice. There’s also a smaller third pot for mini-jobbers employed in your household (paragraph 1: 20%, up to €510).

Trade services vs household services – what’s the difference?
	Household services	Trade services
Legal basis	§35a(2) EStG	§35a(3) EStG
Typical examples	Cleaning, window cleaning, gardening, stairwell cleaning billed via service charges	Repairs, painting, boiler servicing, electrical and plumbing work
Rate	20% of labour costs	20% of labour costs
Maximum tax reduction per year	€4,000	€1,200
Labour cost that reaches the maximum	€20,000	€6,000
Not eligible	Materials, goods supplied	Materials, new-build work, publicly subsidised measures

Which costs count – and which don’t?

Only labour costs qualify. The Finance Ministry’s guidance on §35a explicitly includes travel and machine costs that are invoiced, plus consumables. Materials and goods – paint, taps, light fittings, appliances – are excluded.

The labour share has to be readable from the invoice; a percentage split stated by the company is also accepted. You’re not allowed to estimate it yourself. That’s why our invoices show the labour share separately.

Counts: the tradespeople’s labour
Counts: call-out and travel costs, if invoiced
Counts: machine costs and consumables
Doesn’t count: materials and goods supplied
Doesn’t count: valuations and energy performance certificates
Doesn’t count: work on a new build before it’s completed

What does the tax office require?

Most rejected claims fail on paperwork. Know these rules before you book the job:

Invoice: you need a proper invoice that shows the labour share.
No cash: payment must go into the company’s account – bank transfer, direct debit or card. Cash isn’t accepted, even with a receipt.
In your household: the work has to be done in your home in the EU or EEA, including cellar, balcony and garden.
No new builds: trade work that’s part of constructing a new home is excluded.
No double dipping: if a measure is funded by a subsidised loan or tax-free grant (e.g. via KfW or BAFA), §35a is ruled out for that entire measure.
Not already deducted: costs you claim as business expenses or income-related expenses (Werbungskosten) can’t be claimed here as well.
Year of payment: what matters is when you pay, not the invoice date.

Can tenants claim tradesmen costs?

Yes, in two ways. First, for jobs you commission and pay for yourself – a new ceiling light, say, or repainting when you move out. According to the Finance Ministry, renovation closely linked in time to a move still counts as done in your household.

Second, through your service charges (Nebenkosten): caretaker, stairwell cleaning or servicing of the building’s heating are often part of your annual statement. You prove your share with that statement or a certificate from your landlord or property manager (Hausverwaltung). Ask for one if the statement doesn’t break the amounts down.

Owner-occupied or rented out – what applies to owners?

If you live in the property yourself, §35a applies – also for a second home or holiday flat you use yourself, though the cap then covers all your homes together.

If you rent the flat out, trade costs are expenses against your rental income. §35a is excluded then – but the full cost, materials included, reduces your taxable rent. Two single people sharing one household get the cap only once between them.

Please note

This guide reflects §35a EStG and the Federal Finance Ministry’s guidance letter of 9 November 2016 as amended on 1 September 2021, checked on 26 September 2026. It isn’t tax or legal advice. For your own situation, talk to a tax adviser (Steuerberater) or a tax assistance association (Lohnsteuerhilfeverein).

Sources

Frequently asked questions

What’s the most I can deduct for tradesmen?

The tax reduction is 20% of labour costs, up to €1,200 a year – reached at €6,000 of labour. Household services such as cleaning have their own separate cap of €4,000 a year.

Can I deduct the cost of materials?

No. §35a only covers labour, including invoiced travel and machine costs and consumables. Materials and goods are excluded, so the invoice must show the labour share – you can’t estimate it yourself.

What if I paid the tradesman in cash?

Then you can’t claim. The law requires payment into the company’s bank account. According to the Finance Ministry, neither a receipt nor a later bank transfer replacing the cash payment fixes that.

I rent my flat – can I still claim anything?

Yes. Jobs you commission in your flat qualify, and so does your share of caretaker, cleaning or maintenance costs in the service charge statement. Your proof is that statement or a certificate from your landlord or property manager.

Does §35a apply to a flat I rent out?

No. For rented-out property the costs are expenses against rental income, and §35a expressly excludes those. The upside: as expenses they reduce your taxable rental income in full, materials included.

Do WohnWork Services invoices show the labour cost?

Yes. Our invoices list labour separately from materials, so you can enter it in your tax return. Pay by bank transfer and the second requirement is met too. Invoices are available in English on request.

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