Second home tax: regulations and exceptions

In principle, anyone who maintains a second home within the Federal Republic of Germany in addition to their main residence must pay this secondary residence tax if it is used at least partially for private purposes.

It does not matter whether both apartments are rented or owned by the person concerned. The connecting factor for the second home tax is not the ownership structure, but the actual use. This is due to the political background for this tax.

This is because the federal government pays a tax equalization to the municipality concerned for each resident with a primary residence based on the use of municipal facilities. However, this tax equalization is not paid out for additional secondary residences. This is why most municipalities try to persuade the citizens concerned to register a primary residence with them in order to avoid the secondary residence tax.

The local authorities have the authority to levy the second home tax. There are individual municipalities that do not levy a second residence tax. Anyone who has a second home in such a municipality therefore does not have to pay second home tax there.

However, there are groups of people for whom such a second residence tax would represent an undue hardship. They therefore have the option of applying for exemption from the second home tax in order to avoid this.

These are in particular:

• Spouses who maintain a secondary residence in addition to their main marital residence for professional reasons,
• Persons residing in shared accommodation, in retirement and nursing homes or in prisons,
• Persons who are only staying temporarily in the Federal Republic of Germany and are therefore, exceptionally, not subject to the obligation to register in accordance with Section 27 (2) of the Federal Registration Act (BMG).

In addition, some municipalities also grant an exemption to low earners up to a certain amount of income. However, the respective base amount varies from municipality to municipality. Those who only just exceed this basic amount may at least be able to achieve a reduction in their tax liability.

No, there is no general exception for students. In fact, they are one of the groups most heavily burdened by the second home tax. The reason for this is that young students in particular often keep their residence at home, but are unable to commute to university or college due to the distance and therefore take a second home there.

However, in municipalities that provide for an exemption for low-income earners in their tax statutes, such an exemption is often possible for students. In addition, it may be worthwhile to give up the main residence at home and establish it exclusively at the place of study. If you wish to maintain your residence with your parents, it may be worth comparing the respective tax rates. It is then advisable to establish a secondary residence in the place that levies the lower secondary residence tax or provides for corresponding exemptions for low-income earners.

If an income tax return is prepared and there is an obligation to pay income tax due to the amount of income, the second home tax can be deducted as income-related expenses. The prerequisite for this, however, is that there is a double household management. If this is the case, the other costs of running two households, i.e. commuting between the apartments and the rent for the second home, can also be deducted from income tax. This reduces the income tax liability.

Students who have no income can also deduct the second home tax in their income tax return and thus increase their loss carryforward. However, it should be noted that a loss can only be carried forward if the income-related expenses and tax allowances exceed the actual income. If the student has a mini or midi job, this loss carryforward is reduced or completely used up by the income earned there.

There is no general answer to this question. It depends on the respective municipality. As the collection and amount of this tax is the responsibility of the municipalities, they can vary greatly.

In principle, the amount of the tax depends on both the amount of the annual net cold rent as a reference value and the tax rate set by the respective municipality. This tax rate is generally between 7% and 15%.

Yes, according to § 21 Para. 4 BMG, every resident is obliged to register both their main residence and any other secondary residence.

Anyone who establishes a secondary residence should therefore urgently report this to the relevant registration authority within 14 days. It is true that § 21 Para. 4 BMG only stipulates this deadline for the main residence and does not provide any information on the registration deadline for secondary residences. However, in order to avoid unpleasant consequences, the second home should also be registered within this period.

Anyone who does not register a second home is committing an administrative offense. They risk a fine of up to 1,000 euros. The final amount of the fine depends on the circumstances of the individual case, in particular the time that has passed since moving in and the income.

Anyone who does not register their second home for a longer period of time and therefore does not pay second home tax is also committing tax evasion. This is prosecuted as a criminal offense. You could face up to five years in prison or a fine.

Anyone who has neglected to register their second home for a long time should do so as soon as possible. This is because anyone who files a voluntary declaration at the same time as the late registration will generally be exempted from the fine. In addition, criminal proceedings for tax evasion will also be discontinued in the event of a timely voluntary disclosure if the evaded taxes are paid immediately.