How Do Tax Breaks for Household Help in Germany Work — and What Changes in 2027?
Summary: This guide explains which household expenses qualify under Germany's §35a income-tax relief, how the 20 percent credit works, and why a planned 2027 change could reduce some households' relief by up to 300 euros.
A Tax Break for Paying Someone Else
German income tax law includes a provision known as §35a EStG. It rewards people who pay for work in their own household. Instead of merely lowering taxable income, it reduces the income tax actually owed. For many qualifying costs, 20 percent of the expense comes off the tax bill.
Two categories matter most: household services and handyman work.
What Counts as a Household Service
Household services under §35a paragraph 2 cover work done in the private household. Cleaning, gardening, and certain care services are typical examples. These qualify for a tax credit of 20 percent of the expenses, up to a maximum annual relief of 4,000 euros.
Handyman Work Has a Different Cap
Handyman and craftsperson work falls under §35a paragraph 3. The relief applies to labor costs, not materials. If an invoice includes parts and labor, only the labor portion helps. Some machine and travel costs, including VAT, may also count. Material costs generally do not.
The current cap for handyman work is 1,200 euros per year. That means a taxpayer can claim 20 percent of qualifying labor costs, but the credit stops at 1,200 euros.
Who Can Claim It
The relief is not limited to employees. Pensioners can use it too, provided they meet the same conditions.
There is an important paperwork condition. The taxpayer needs a proper invoice, and payment must go to the service provider's bank account. Paying the handyman in cash wipes out the relief.
What Changes in 2027
According to rentenbescheid24, the 1,200-euro cap for handyman work is planned to fall to 900 euros in 2027. Under the law as it currently stands, 1,200 euros still applies. For a household that reaches the old maximum, the difference is up to 300 euros less in tax relief.
The planned 900-euro cap is not yet current law. Taxpayers filing under the existing rules should still use the 1,200-euro limit. The reduction will apply only after the change takes legal effect.
What This Means in Practice
Keep receipts. Separate labor from materials on invoices. Pay by bank transfer, not cash. Then check the caps: 1,200 euros for handyman work today, 4,000 euros for household services. In 2027, handyman relief shrinks to 900 euros unless the plan changes.
The distinction between household services and handyman work matters because the law sets different maximums and different rules. rentenbescheid24 notes that the two categories are separate and should not be mixed.
For anyone planning larger renovation work, timing may matter. Work paid for while the 1,200-euro cap remains in force can produce the higher relief. Once the 900-euro cap takes effect, the same work brings less.