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Disabled-friendly conversion: How to deduct the costs
Serious illness or an accident can change your whole life and are not infrequently the cause of a disability. It is often no longer possible for those affected to cope with everyday life within their own four walls without outside help or renovation work. The costs for a barrier-free bathroom, a stair lift or a vehicle conversion can quickly skyrocket.
After all: Anyone who inevitably and necessarily has to make barrier-free conversions can not only count on subsidies from the state, but also enter part of the costs in the tax return - as an extraordinary burden.
However, there are two limitations:
If you receive a subsidy from the long-term care insurance fund for the handicapped-accessible renovation, you must deduct the reimbursement from your costs.
You are only allowed to deduct the costs that remain after deducting the reimbursements or subsidies and which exceed a so-called reasonable burden.
Attention: This does not apply to publicly funded measures for which low-interest loans or tax-free grants are used.
Vehicle conversion for disabled people
Swivel seat, steering aids such as a rotary knob or wheelchair ramp: thanks to the latest technology, many people with disabilities can stay mobile in everyday life. But that's not cheap pleasure. If neither the health insurance nor the long-term care insurance pays the costs, the retrofitting of a car for the disabled can be deducted from the tax. Since May 28, 2010, the Bavarian State Tax Office has even allowed the full amount of the costs to be deducted in the year of payment - all in one fell swoop (File number S 2284.1.1-2 / 6 St 32).
Until 2010, the costs for a handicapped-accessible conversion of the car could not be deducted in one go in the year in which the costs were incurred. Rather, the expenses for the vehicle conversion had to be written off over several years and distributed over the remaining useful life of the vehicle. What does useful life mean? Well, the tax office assumes that a new car will be used for six years. So if you retrofitted the new car immediately after buying it, you had to split the costs evenly over six years and enter them into your tax return every year.
By the way:
You cannot deduct the costs for the handicapped-accessible conversion of a motor yacht from the tax. That was decided by the Lower Saxony Finance Court (File number 2 K 176/13). In contrast to a handicapped accessible bathroom or a wheelchair ramp, the costs of converting a yacht do not necessarily arise. In the specific case, the judges ruled that, on the one hand, the motor yacht was not an “existentially necessary object” of the plaintiff. On the other hand, the boat is a hobby and is used for recreational activities, "which can be more clearly assigned to the purely private and therefore tax-irrelevant area," said Lower Saxony. The plaintiff would have had the freedom of choice at any time to look for another hobby or to give up his previous hobby.
The Federal Finance Court (BFH) confirmed the decision on June 2nd, 2015: The conversion costs of a yacht are "primarily the result of freely chosen consumer behavior", according to the judges of the highest tax court (File number VI R 30/14).
Handicapped accessible renovation of the house
People with disabilities often need a barrier-free apartment. However, very few apartments or houses are already handicapped accessible, so smaller or larger renovations are pending. The costs for this are usually deductible as an extraordinary burden.
This right was won by a man who was severely handicapped after a stroke in 1999. Instead of moving to a nursing home, he wanted to stay in his own house with his wife. To do this, the two had their single-family home remodeled: a wheelchair ramp, a handicapped-accessible bathroom and the conversion of the study into a bedroom - cost at the time around 140,000 D-Marks, or around 70,000 euros.
Because the health insurance company did not pay any of it, the couple stated the amount in their tax return as an extraordinary burden. But the responsible tax office refused. Reason: According to the law, the deductibility of such costs is excluded if the taxpayer receives an "equivalent value" through his expenses.
But a physically severely disabled person does not have his house converted to meet the needs of the disabled out of a desire for luxury, as the BFH decided in October 2009 (File number VI R 7/09). In the specific case, the equivalent value obtained takes a back seat, according to the judges.
Acquisition costs for a larger property
In contrast to this, there is another ruling by the BFH in matters of property purchase: acquisition costs for a larger property do not necessarily arise because a person is sick or disabled. Rather, the additional costs are owed to the freely chosen apartment size and the living space requirement of the taxpayer. The BFH has this in a judgment (File number VI R 42/13) of July 17, 2014 clarified. Accordingly, people with disabilities cannot deduct the acquisition costs for a larger property as an extraordinary burden.
By the way:
Have you made barrier-free conversions and would like to deduct the costs from your tax? Our consultants will be happy to do this for you. Find a counseling center near you here: Consultant search.
This is an editorial text from the VLH editorial team. There is no advice on topics that are outside the tax advisory powers of an income tax aid association. Consulting services in specific individual cases can only be provided within the framework of the establishment of a membership and exclusively within the advisory authority according to § 4 No. 11 StBerG.
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