Household deduction in 2019 is 50% of the work component
The household deduction is a deduction in personal tax for certain work done by the household. The household deduction makes it cheaper to buy work.
You can get a household allowance for household work you do at home or in a leisure dwelling. This includes plumbing work, electrical work, suction services, security lock installation, glazing work, refrigeration services, automation services, specialist cleaning, home renovation and installation of IT equipment.
In 2019, the household deduction will be 50% of the work component. The household deduction is a very substantial tax benefit that is always worth taking advantage of, for example, for various building services, such as plumbing work at home and plumbing work in the cottage.
It is worth noting that a housing association cannot claim the household allowance. However, a natural person can receive a household allowance for maintenance and renovation work on a dwelling that is the responsibility of a partner in a housing company by law or by the articles of association.
No deduction is made for supplies or travel expenses. The company must specify on the invoice the proportion of labour and expenses not eligible for deduction, such as supplies and travel expenses.
The amounts of the household allowance for building services in 2019 are as follows:
- You can reduce by 50% the share of the work of the building services company
- The deduction Maximum amount is EUR 2400 per year
- The deduction includes an annual contribution of EUR 100 deductible
- A couple can deduct up to €4,800, as the deduction is personal
The easiest way to claim the deduction is when you apply for a new tax card. You can declare the amount of the household deduction online and it will be updated on the pre-completed tax return at the same time. You can also fill in the missing information when you receive your pre-completed tax return at home and return it to the Tax Administration. The third option is to report the information using Palkka.fi. For more information on these three options, see here.
You should always note down the services you have bought for yourself, so that you remember to deduct any household deductions in your tax return. They can help you save hundreds of euros a year.
Practical examples
Plumbing example:
Replacing a leaking hot water heater
Drainage of the leaking hot water tank and plugging of the pipes by a plumbing service and installation of a new hot water tank the next working day. For this plumbing service, the cost of the work was €2 148 including VAT at 24%. The full tax deduction for the work is 50%, i.e. € 1 074. Please note that a deductible of € 100 is deducted from the full year's household allowance. This means that if you only order one piece of work during the year, €100 of the excess will be deducted from your household deduction. In this example, your household allowance is therefore €1 074 - €100 = €974.
Value of the work: €2 148, cost of the plumbing work after the household allowance (without deductible) €1 074, including deductible €1 174 → Savings of up to more than €1 000
Electrical work example:
Installation of luminaires and switches
Installation of spotlights, replacement of switches in the hallway and kitchen and replacement of the kitchen socket. The cost of this electrical service was €1 330 including VAT at 24%. The full tax deduction for the work is 50%, i.e. €665. Please note that a deductible of €100 is deducted from the total household allowance for the year. This means that if you only order one piece of work during the year, €100 of the excess will be deducted from your household allowance. In this example, your household allowance is therefore €665 - €100 = €565.
Contract value: €1 330, cost of electrical work after household allowance (excluding excess) €665, including excess €765 → Savings of up to more than €600
Example of lock installation:
Replacement of two locks
2 Abloy lock washers upgraded to a new one. 65th year townhouse front door and garage door with the same key. This locksmith service cost 350 € incl. VAT 24%. The full tax deduction for the work is 50%, i.e. €175. Please note that a deductible of €100 is deducted from the total household deduction for the year. So if you only order one piece of work during the year, €100 of your household deduction will be deducted. In this example, your household allowance is therefore €175 - €100 = €75.
Value of the work: €350, cost of the locksmith work after the household allowance (excluding the excess) €175, including the excess €275 → Savings of up to more than €100
