Tax credit for household expenses

The tax credit for household expenses reduces the amount of tax you have to pay. You can claim the credit if you pay for work to be done in your home, such as cleaning, child care, renovation, or computer installation. You can also claim the credit for work done at a holiday home that you own.

Do you want to claim tax credit for household expenses?

See instructions: How to claim tax credit for household expenses

What kind of work entitles you to the credit?

What are the requirements for the credit for household expenses?

Which types of work entitle you to the credit for household expenses?

Amount of credit: work paid for in 2021

The maximum credit for household expenses that you can claim is €2,250 per person. The credit threshold per person is €100, which you have to pay yourself.

Credit is only granted for the part of the total expense that was paid for work. You can claim credit for 40% of the amount that you have paid a company for their work. You will receive the maximum amount of credit if the amount paid for the work specified in the company’s invoice is at least €5,875.

If you hired an employee, you can claim credit for 15% of the wages you paid them as well as the total amount of any employer’s contributions you have made.

Please note: You cannot get the credit for other costs, such as equipment or travel expenses. When the company sends you an invoice for the work, the invoice must include an itemisation of costs. The itemisation shows the work-related part of the total amount. You can claim credit for household expenses based on the work-related part.

Report the tax credit to be taken into account on your 2021 tax card

Alternatively, you can file the tax credit for your 2021 tax return 

Amount of credit: work paid for in 2020

The credit amount has not changed since 2020. 

How to claim tax credit for household expenses

Can the credit be divided between me and my spouse?

The credit for household expenses is personal. This means that you and your spouse together can get up to €4,500 of credit per year.

If your total amount of credit together is no more than €2,250, you can choose to claim the entire credit amount for just one of you. This way, you will only need to pay the credit threshold amount once. 

If the amount claimed exceeds the maximum tax credit for one person but only one of the spouses claims the credit, then the Tax Administration will automatically transfer the exceeding part to the other spouse’s tax assessment. 

Example: You and your spouse have ordered renovation work for your kitchen. You want to divide the tax credit for household expenses between yourselves. The sum total of the invoice is €13,000. The amount charged for work is €6,000. 

Both of you submit the invoice total and the amount charged for work on your tax return. In addition, you both indicate what part of the expenses you have paid. In this case, you have paid €3,000 because you have divided the expenses between yourselves. The Tax Administration calculates the credit and subtracts the threshold amount on your behalf.

If you do not divide the credit but one of you claims the whole credit, the amount exceeds the maximum credit. In this case, the Tax Administration automatically transfers the exceeding part to the spouse’s tax assessment.

If the tax credit for household expenses is greater than your total taxes, the Tax Administration automatically subtracts the exceeding part from your spouse’s taxes. 

An unmarried partner is equally entitled to the tax credit. To qualify for the credit, the partner must have paid expenses that entitle to the credit and must live in the same apartment. However, a tax credit can be transferred from one spouse to the other only when they are considered spouses from the point of view of taxation. Who are considered spouses in taxation?

Frequently Asked Questions

You can claim tax credit for household expenses per calendar year.

The credit is deducted from the taxes of the year when you paid the company’s invoice or the wages and employer’s contributions for your employee. For example, if you order renovation work at the turn of the year and you pay invoices for the work during two different calendar years, you can claim the tax credit for both years. However, you will also have to pay the credit threshold amount twice.

The credit is deducted primarily from your taxes on earned income and capital income. Most other deductions reduce the amount of earned income that is taxed, not the amount of tax itself. This means that the tax credit for household expenses has a bigger effect on your taxes.

Please note that if you do not have enough taxes payable to benefit from the full amount of the credit, the amount that was not credited to you this year cannot be carried over to the next year.

If you pay a company for the work: First, check that the company is in the prepayment register. Then look at the invoice you paid and see how much the work-related part was. Make sure that this amount includes VAT. The credit for household expenses is determined by the amount paid for the work with VAT. The credit is 40% (in 2020) of this amount. However, you must subtract the credit threshold of €100 from this amount. The result is the amount of credit for household expenses you will receive.

Example: You can get €2,250 in credit for household expenses, i.e. the maximum amount, if you pay a company €5,875 for the work they have done. (€5,875 × 40%) – credit threshold €100 = €2,250.

If you hire an employee, the calculation is different: From the total amount that you pay to your employee, deduct 15% (in 2020) as well as any employer’s contributions. Subtract the credit threshold amount of €100. The result is the credit you can claim. The maximum amount is still €2,250.