Tax credit for household expenses
You are entitled to a tax credit for household expenses if you have household work done in your home or holiday home. Such work includes cleaning, child care, decorating and renovations and installation of IT equipment.
The tax credit for household expenses is 2,250 € (2019 €2,400 a) year at maximum. Your personal liability portion is €100.
What kind of work entitles you to the credit?
You can get the credit if you have paid expenses for
What is the maximum tax credit you may be granted?
The maximum credit for household expenses is €2,250 a year. Your personal liability portion is €100/person a year.
The credit is personal, so you and your spouse together may get a credit of €4,500. If the expenses do not exceed the €2,250 threshold, it is advisable that only one of you should request the tax credit. This way, the personal liability portion will be subtracted only once.
If the tax credit for household expenses is greater than the taxpayer’s total taxes, or if its amount is greater than the maximum limit for one individual, the Tax Administration will automatically grant the exceeding part to the spouse. It will be subtracted from the spouse’s taxes. This way, the credit is granted and carried out the same way as if the spouse had claimed the credit himself or herself.
When you buy services from a company registered in the prepayment register, you may deduct 40% of the part of the expenses relating to work subject to VAT. You get the maximum credit when the portion of work included in the invoice you pay is €5,875 (€5,875 x 40%) - personal liability €100 = €2,250.
When you hire an individual worker and pay wages directly to him or her, you may deduct 15% of the wages and related social security expenses. Read more about hiring an individual worker.
The tax credit for household expenses is granted only on the part of the expenses relating to work. You are not entitled to a tax credit on work you do yourself, nor on travel expenses or supplies.
Note that the company must be registered in the prepayment register
If the company is not on the prepayment register, you cannot get the credit.
Always check that the company or entrepeneur is registered in the prepayment register before you make an agreement. Search at the Business Information System website(www.ytj.fi).
The company must be registered in the prepayment register at the moment when you are concluding the agreement. If the company is on the register when the agreement is concluded, you will be granted the tax credit for household expenses even if the company is no longer registered when you pay the invoice.
Conditions for the tax credit
You can get the credit if you have had work done
- in your home
- in your holiday home
- in your parents’ or grandparents’ home.
You do not have to own the apartment, it is enough if you live there or if it is in your own use.
Estates are entitled to the tax credit for household expenses but only for the year during which the deceased person died. Housing companies are not entitled to the tax credit for household expenses.
Frequently Asked Questions
The credit is personal, so you and your spouse together may get a credit of €4,500.
You can agree between yourselves how to divide the credit. The credit will be granted in the tax assessment based on your request. The personal liability portion is first subtracted from both of you. If the expenses do not exceed the €2,250 threshold, it is advisable that only one of you should request the credit. This way, the personal liability portion will be subtracted only once.
A common-law spouse can get the credit even when (s)he is not an owner of the apartment. A valid justification is that the spouse lives in the apartment and has paid expenses that entitle to the tax credit.
A child living at home may also be granted the credit if (s)he has income and has paid expenses entitling to the credit.
The credit is specific for the calendar year.
It is granted for the year when you pay the invoice to the company or pay your directly hired worker’s wages and social security expenses. If, for example, renovations are made at the turn of the year, you may request the credit in two tax years – depending on when you pay the related invoices. The personal liability portion will be subtracted in both years.
You can request the credit to be taken into account in the calculation of your withholding rate on your tax card for the current year or, alternatively, you can request the credit at a later date when you submit your tax return.
The tax credit for household expenses is deducted primarily from the tax on earned income and capital income. Most other deductions are deducted from the taxpayer’s earned income before tax is calculated, so the deduction effect is weaker than in the case of the tax credit for household expenses.
If the tax credit for household expenses is greater than the taxpayer’s total taxes, the exceeding portion cannot be carried over to the next year.
You cannot be granted the tax credit for household expenses if, for the same purpose, you have received
- a dependent care allowance
- a child home care allowance
- a private care allowance
- financial support for renovations from State funds or from funds of another public body (however, support for heating system conversion has no effect on your eligibility for the tax credit)
- a voucher for social and health care services granted by your municipality
- a pay subsidy for a household acting as the employer.
If you notice afterwards that you could have received the tax credit for household expenses, you may claim it even after the statutory tax assessment period has ended. Request a change by filing a claim for adjustment.