Secondary residence – What do I need to know?
A second home can have many backgrounds, such as an apartment at work, a vacation home on the beach or a shared flat in a university town. However, many questions arise in this context, such as the costs and taxes, which we would like to address in more detail today.
Main and secondary residence
German tenancy law distinguishes between main residence and secondary residence. The former refers to the place where you spend most of your time, more than half of the year.
The secondary residence, on the other hand, is used as a vacation home, for work or study. If commuting is out of the question because the distance is too far or the effort is too high, a secondary residence is an option.
Second home – Do I have to register?
In any case, registration is mandatory in Germany, regardless of whether the second home is bought or rented. You can register at the Citizens’ Registration Office or the Residents’ Registration Office. The deadline is two weeks. At least one appointment should be made within this time; if the offices are overloaded, exceeding the deadline will still be tolerated.
The following documents are required for registration:
- Valid identification document (identity card, passport)
- Fully completed registration form
- If applicable, marriage certificate, birth certificate of children, divorce decree
- Landlord’s certificate, rental agreement for apartment or house
Registration is free of charge and is done in person. If this is not possible, a representative with a power of attorney can register the second home.
Please note: Anyone who fails to register can be fined up to €1,000.
Second home tax
In some cities, a so-called secondary residence tax is levied, which is referred to by the respective municipality as a municipal expense tax. It does not matter whether the secondary residence is declared as owned or rented, it applies to anyone who has a so-called secondary residence in the town. The tax is based on the net cold rent or living space.
How much is the second home tax and is it tax-deductible?
The amount of tax is not uniform and differs from place to place.
You can see how different this tax can be in different cities: Munich, for example, levies 9% of the annual net cold rent, Berlin 15% and Hamburg 8%.
If the secondary residence is recognized as such by the tax office, it can be deducted from tax. This depends on:
- The size and furnishings of the main and secondary residence
- Frequency and duration of stays
- Duration of external employment
Students and trainees whose main residence is with their parents cannot claim the costs of their second home for tax purposes. If the rental costs of the second home for employees amount to more than 10% of the running costs of the main home, the additional costs can be deducted from tax.
Why is a second home tax levied at all?
The municipalities receive municipal financial compensation for each resident whose primary residence is registered in the municipality. The municipalities do not receive this compensation if you have a secondary residence in the municipality. However, these people also use the municipal infrastructure such as roads, public swimming pools and more. This tax is an important source of income for vacation resorts in particular. It can also encourage people to move their primary residence to this municipality.
…and who is exempt?
There is also an exemption from the second home tax for certain groups of people:
- Spouses who have a secondary residence for professional reasons but share a main residence with their spouse
- Residents of nursing homes or therapeutic facilities such as retirement homes or socio-educational institutions
- Persons who are housed in prisons
- Persons who are only staying in one place temporarily (no longer than six months a year)
In Bavaria, low-income earners are also exempt from the second home tax.