The fundamental question is whether expenses incurred in connection with the conversion of a garden on the basis of a physical impairment are deductible as extraordinary expenses under § 33 EStG. The conversion should serve the purpose of making the garden usable despite the impairment.
Ruling of the FG Münster
In principle, expenses for the disability-friendly conversion of a garden incurred by a disabled taxpayer who owns a single-family home are deductible as extraordinary expenses under § 33 EStG. However, the FG Münster restricted this deduction in its ruling by stating that a deduction is not possible if there is a terrace at the rear of the house. In the view of the FG Münster, the terrace already provides disability-friendly access to the garden prior to the conversion measures. As a result, a deduction under § 33 EStG would not apply (FG Münster, ruling of 15 January 2020, 7 K 2740/18 E). However, the final ruling is still pending before the BFH, so comparable cases should be kept open for the time being.
Deduction of Conversion Measures as Tradesperson Services If a deduction of the expenses is not possible under § 33 EStG, the tradesperson services may alternatively be considered under § 35a EStG. The tax authorities have decided that if the expenses are not taken into account because the reasonable burden threshold is not exceeded, the labour costs of the tradesperson may nevertheless be deducted under § 35a EStG. Furthermore, expenses for the conversion of the garden that are deductible under both § 33 EStG and § 35a EStG are to be considered primarily as tradesperson services under § 35a EStG. The reason for this is that for a tax deduction under § 33 EStG the reasonable burden threshold must first be exceeded, whereas under § 35a EStG 20% of the labour portion of the tradesperson's invoice can be deducted immediately.
Frequently asked questions
Frequently asked questions
Are costs for the disability-accessible redesign of a garden deductible as extraordinary expenses?
In principle, expenses for the disability-accessible redesign of a garden incurred by a severely disabled taxpayer may be deductible as extraordinary expenses pursuant to § 33 EStG. The prerequisite is that the measures are necessary to enable use of the garden despite the physical impairment. In addition, the deduction requires that the reasonable burden threshold is exceeded.
When does the FG Münster reject the deduction for garden remodeling under § 33 EStG?
The FG Münster (judgment of 15 January 2020, 7 K 2740/18 E) ruled that a deduction under § 33 EStG is precluded if a terrace already exists at the rear of the house, thereby providing accessible garden access prior to the remodeling. In that case, the measures are no longer considered unavoidable. A final BFH ruling is still pending, so comparable cases should be kept open.
Can garden redesign costs be deducted as tradesperson services under § 35a EStG?
Yes. If a deduction under § 33 EStG is not possible — for example, because the reasonable burden threshold is not exceeded — the labor costs included in the tradesperson's invoice can be claimed at 20 % under § 35a EStG. The tax authorities have expressly recognized this. Material costs, however, are not eligible.
Section 33 EStG or Section 35a EStG – which takes precedence for garden redesigns?
If expenses are deductible under both Section 33 EStG and Section 35a EStG, they must primarily be claimed as a tradesperson service under Section 35a EStG. The reason is that Section 33 EStG first requires exceeding the reasonable burden threshold, whereas Section 35a EStG immediately grants a 20% deduction on the labor portion of the tradesperson's invoice.