Did you know that you can use the household allowance not only for the maintenance of your own home, but also for the maintenance and upkeep of your summer cottage or second home?
In this blog post, we take a look at who is eligible for the household credit and how to take advantage of it for household maintenance and upkeep. We will also cover the things to consider when claiming the household credit.
Who is eligible for the household allowance?
The household allowance can be claimed by anyone who pays wages or salaries for individual or regular work done at home. The household allowance is only available to individuals, i.e. it is not available to associations and companies. You can also benefit from the household allowance if you are renovating your own parents' or grandparents' home. Please note, however, that the household allowance cannot be used for the maintenance and upkeep of your own children's homes.
It is also worth noting that investment dwellings are not eligible for the household allowance. However, there are some other reliefs on tax deductions that you can take advantage of for new construction and maintenance of investment dwellings. Find out more about how 24 Center is there to help and support you as an investor.
Where to get the household allowance?
The household allowance can be used for many renovation and installation work in cottages and second homes. 24 Center offers help with the following tax-deductible building services, for example:
- electrical and plumbing work subject to authorisation
- installation of a security lock or electronic locking system
- installation, maintenance and commissioning of air-source heat pumps
- sauna heater maintenance and replacement
Things to consider about the household allowance
It is not complicated or difficult at all to use the household deduction, but there are a few important points to bear in mind:
✔ The deductible for the household allowance is €100, from which no deduction can be made. The deductible always applies for a calendar year and is personal, i.e. persons living in the same household pay their own deductible.
✔ Household deduction is only available for the proportion of work done. So you cannot deduct travel or material expenses. You can deduct 40% of the work if you have bought the work from a company. The maximum deduction is granted when the invoice paid to the company includes € 5 875 for the share of the work.
✔ If you hire an employee, you can deduct 15% of the salary and the employer's incidental expenses related to the salary.
✔ Forgot to make a household deduction? No problem, you can do it retroactively for three years. Contact the tax office and ask for a correction.
✔ Do you and your spouse jointly or partly own a summer cottage or townhouse? There are specific rules on the use and transfer of the household allowance, for example whether you and your spouse are married. You should be careful with the details, so we recommend that you check with Minilex, for example, for further details.
✔ The formula for making tax deductions is: (Work share € x 40%) - €100 = Household deduction.
24 Center's calculator allows you to estimate how much deduction you will receive: https://24center.fi/kotitalousvahennys/ The Household deduction tool has also been praised as useful when our customers are planning and budgeting for future renovations.
Instructions for making a household tax deduction
You can file a tax return for the work done as soon as you receive a receipt or invoice from the person who did the work. You can enter the details of the deduction either on the tax card or on the tax return. If you report the information on the tax card, you will get the benefit of the deduction immediately. If you report the information on your tax return, the deduction will be taken into account later when you claim the residual tax or tax refund.
You can easily make a tax deduction declaration on the OmaVero.fi website. To complete the declaration, you will need the following information:
- company business ID (24 Center business ID: 2774786-8)
- the total amount of the invoice
- the VAT element of the work.
If you have hired an employee to do work that is deductible as household work, you need:
- the employee's personal identification number
- gross salary paid to the employee (including withholding tax)
- information on the incidental expenses of salaries.
Remember to keep all your receipts so that the tax authorities can check them if necessary. Read more on vero.fi.
24 Center to help with your home's building services
In sudden situations, for everyday installation work and building maintenance, you can count on 24 Center for fast and reliable assistance. We are available around the clock to help you when you need it most. Our skilled customer service representatives and extensive network of partners are ready to help you in any situation, whether it's a plumbing leak, electrical fault or other unexpected problem. We operate throughout Finland and in Sweden and Norway, offering assistance around the clock, every day of the year. Remember, you can also turn to us when you're unsure how to deal with building services challenges.
Get help with one call for both urgent emergencies and unhurried everyday tasks. With our extensive network of contractors, you'll find the best building services professionals in your area. Find your nearest available plumber, electrician, locksmith or even a vacuum truck with ease - all it takes is one call to 0100 2470, or you can place an order for a non-urgent job online here
