Service charge statements in your tax return: what tenants, owners and landlords can deduct

Michael Pauker · 2026-10-13

The annual service charge statement is on your desk, and your tax return is due. Somewhere you have read that you can deduct service charges. So you enter the total from the statement and hope for a substantial refund.

Unfortunately, it is not that simple. Only part is deductible, and how much depends on your circumstances. Tenants and owner-occupiers receive a direct tax reduction of 20 % for certain labour costs. Landlords enter service charges in two places: once as income and once as expenses.

We explain which items count, which year to claim them in and what the result is in euros. With two examples: a tenant and a landlord.

01Who can deduct what: tenants, owner-occupiers and landlords

The same statement has very different effects for these three groups. Before looking for figures, establish which group you belong to.

The difference is greater than it looks. A tax reduction under § 35a deducts an amount directly from your tax liability. Income-related expenses, by contrast, only reduce taxable income; their value depends on your personal tax rate. The same expense cannot qualify for both (§ 35a Abs. 5 EStG).

A ruling by the Federal Fiscal Court has settled a long-standing dispute. Tenants are entitled to the tax reduction even if the landlord, rather than the tenant, commissioned the caretaker or cleaning company (BFH, judgment of 20.04.2023, VI R 24/20).

02§ 35a EStG: what the tax reduction is worth

§ 35a EStG provides three categories. Each offers 20 % of the costs, subject to its own maximum.

Only labour, machinery and travel costs qualify, not materials (§ 35a Abs. 5 EStG). When a heating system is serviced, the technician’s labour counts, but not the replacement part. Payment must also be cashless. Tenants meet this requirement if they transfer their advance payments by bank transfer.

The maximum amounts apply per household, not per person. If you also pay a cleaner and a decorator for work at home, these share the allowances with the items in your service charge statement.

03Which items in the statement count

Most statements contain 10 to 15 items. Only some qualify.

What matters is that the statement shows the labour components. Many property managers already list eligible amounts separately, often on a dedicated page or in a certificate based on the Ministry of Finance’s template. If this is missing, ask your landlord or property manager for a breakdown.

04Which year and which supporting documents

The statement for 2025 usually does not arrive until 2026. Which year do you enter it for?

The Ministry of Finance allows tenants and flat owners a practical approach here. Under the BMF letter of 09.11.2016, you can claim eligible amounts in the year in which you receive the statement. The statement for 2025 arriving in summer 2026 would therefore go into your 2026 tax return. What matters is that you claim each amount only once and stick to the same method.

If you own and live in the flat, use the owners’ association’s annual statement instead. It contains the same items, but is called the Hausgeld statement. Read more about its structure in our guide to Hausgeld for condominium owners.

05Worked example: what a tenant gets back

Take Lena. She rents a 65 m² flat in a building with a lift. Her service charge statement for 2025 arrives in June 2026 and lists the eligible labour components separately. The name is fictional, and the figures are an illustrative calculation, not a forecast.

119 € is not a large amount. But it applies regardless of Lena’s tax rate, because § 35a reduces tax directly. Anyone who pays no income tax at all, for example while studying, receives no benefit. There is no refund that takes the tax liability below zero.

06Landlords: recovered charges as income, costs as income-related expenses

For landlords, the service charge statement is a zero-sum exercise if entered correctly. The tenant’s advance payments are income. Service charges and Hausgeld paid are income-related expenses. Both belong in Anlage V, the rental income supplementary form.

The most common mistake is to enter only the costs and forget the recovered charges. This reduces tax, but incorrectly. The tax office will notice, at the latest, when income appears unusually low relative to the rent excluding service charges.

Take Thomas. He lets a condominium flat for 735 € rent excluding service charges plus 195 € in advance service charge payments. Hausgeld is 280 € a month, including a 60 € contribution to the reserve. Property tax of 240 € a year is payable on top. Thomas is also fictional, and the figures are an illustrative calculation.

In the example, the incorrect version omits 2.340 € of income. At a personal tax rate of 42 %, that would mean 982,80 € too little tax, excluding the solidarity surcharge and church tax. An audit would result in a demand for the shortfall, with interest.

How much of your rent is left after tax? Calculate your own situation using rent excluding service charges, costs, depreciation and interest.

And § 35a? The tax reduction is not available for a let property because the costs already qualify as income-related expenses. Our guide to completing Anlage V explains the form line by line.

07Mistakes and limitations

The amounts are small, but queries from the tax office still take time. These are the most common causes.

One limitation affects everyone. § 35a only helps if you pay income tax. And for landlords, the value of each income-related expense depends on their personal tax rate, which changes with income. When calculating the finances of a letting, you should therefore also plan for years when your income falls, for example in retirement. Tax rules can change; the amounts here apply as at October 2026.

08Further reading

• Completing Anlage V
• Tax on rental income
• Operating cost statement
• Recoverable service charges under the BetrKV
• Hausgeld for condominium owners
• Property tax
• Calculator: tax on rental income

09Sources

All sources accessed on 13.10.2026.

• § 35a EStG, § 9 EStG, § 11 EStG, § 21 EStG
• Federal Ministry of Finance, letter of 09.11.2016 on § 35a EStG (BStBl I S. 1213), including annexes, amended by letter of 01.09.2021
• BFH, judgment of 20.04.2023, VI R 24/20 (tax reduction for tenants without their own contract with the service provider)
• BFH, judgment IX R 19/24 (contributions to the maintenance reserve deductible only when used)
• § 2 Operating Costs Ordinance (Betriebskostenverordnung)
• Illustrative calculations: own calculations, as at 13.10.2026

Note: This guide provides general information and does not replace tax advice for your individual circumstances. All figures are illustrative calculations with disclosed assumptions, as at 13.10.2026.