In the last quarter of the year, an enquiry about renovation, repair or maintenance can come with a second question: can this still count for this year's tax return? For trade services in their own home, private customers can have their income tax reduced on application by 20 percent (EStG section 35a) of the expense, up to 1,200 euros (EStG section 35a). Only the labour share qualifies, not the materials, and the tax year is set by the payment rather than the order: expenses are deducted in the calendar year in which they were paid (EStG section 11). For painters, electricians, heating engineers, roofers, joiners or landscapers this means: a website that clearly says which part of the invoice counts, how payment has to be made and which slots are still free before New Year's Eve answers a follow-up question before it is asked – without giving tax advice and without promising anything the business cannot assess for the individual customer. This article sets out the legal position, shows where the note belongs on service page, FAQ and invoice, and names the cases in which the turn of the year makes no difference. Orders from business customers with remaining budgets are covered in a separate article on year-end business orders.
What the tax credit covers
The rule is in section 35a(3) of the German Income Tax Act (EStG): for trade services used for renovation, maintenance and modernisation, the assessed income tax is reduced on application by 20 percent (EStG section 35a) of the expense, but by no more than 1,200 euros (EStG section 35a). Arithmetically, this ceiling is reached at 6,000 euros (EStG section 35a) of labour costs; anything above that does not reduce the tax for the same year any further. The reduction comes off the tax itself, not off income. Someone who pays no income tax gains nothing: according to the Federal Ministry of Finance's guidance, such an excess leads neither to negative income tax nor to a carry-forward into another year (BMF guidance on section 35a).
Further conditions from the same section belong in every note on the website. The deduction applies to labour costs only (EStG section 35a). The customer must have received an invoice, and payment must have been made to the business's account (EStG section 35a). The work must be done in a household of the customer located in the European Union or the European Economic Area (EStG section 35a). Publicly funded measures for which subsidised loans or tax-free grants are used are excluded (EStG section 35a). And the ceilings apply per household: if two single people live together, they can only claim them once in total (EStG section 35a).
How far the term reaches is set out in the Federal Ministry of Finance's guidance. Section 35a(3) applies to all craft work for renovation, maintenance and modernisation in the household, from small repairs to work that is normally done only by skilled tradespeople (BMF guidance on section 35a). Checking whether a system works properly is a trade service too, just like repairing damage (BMF guidance on section 35a). The business commissioned does not have to be entered in the trades register (BMF guidance on section 35a). Craft work as part of a new build, on the other hand, does not qualify (BMF guidance on section 35a). Creating new living space in an occupied house, for example through a conversion, counts as work in the existing household according to the same guidance.
Scroll table sideways
| Work for a private customer | Classification under EStG section 35a | What counts |
|---|---|---|
| Painting, floor coverings, windows and doors in the home | Trade service (subsection 3) | Labour, machine and travel costs, not materials |
| Servicing and repair of heating or electrical systems on site | Trade service (subsection 3) | Labour, machine and travel costs, not spare parts |
| Garden design and paving on the property | Trade service (subsection 3) | Labour costs within the household, not stones and materials |
| Mowing, hedge cutting, clearing the pavement | Household-related service (subsection 2) | Labour costs, with a separate ceiling |
| Work as part of a new build | Not eligible | Nothing |
| Single measure with a subsidised loan or tax-free grant | Excluded (subsection 3, sentence 2) | Nothing, not even the part above the subsidy |
| Repair in the business's own workshop | Only the part done in the household | Work on site; the invoice marks the workshop share |
Alongside the pot for trade services there is a second one: for household-related services that are not trade services, the tax is also reduced by 20 percent (EStG section 35a), there up to 4,000 euros (EStG section 35a). The example list in annex 1 to the guidance places garden maintenance such as mowing and hedge cutting in this pot and garden design among the trade services (BMF guidance on section 35a). For energy-saving measures on an owner-occupied building there is a third rule: section 35c reduces the tax by 7 percent (EStG section 35c) of the expense in the year of completion and in the following year, and by 6 percent (EStG section 35c) in the year after that, up to 40,000 euros (EStG section 35c) per eligible property. It applies to measures started after 31 December 2019 and completed before 1 January 2030 (EStG section 52), and it requires a certificate in the official format from the specialist business that carried out the work (EStG section 35c). For the same measure the two routes exclude each other: if section 35a is claimed, section 35c is not available (EStG section 35c).
The rule therefore affects many trades that work in flats, houses and gardens: painters, tilers, electrical, plumbing and heating businesses, roofers, joiners, chimney sweeps, landscapers and repair services that work at the customer's home. How the note fits into prices and FAQ in the electrical trade is shown in the article on the electrical contractor website for EV chargers and solar. For businesses that repair appliances, the line between work on site and work in the workshop matters most; how to build the page for repair jobs is described in the article on the repair page with the European form.
Why 31 December matters
The link to the year does not come from section 35a but from the general cash-basis principle: expenses are deducted in the calendar year in which they were paid (EStG section 11).
The tax authorities apply this expressly to the credit: for claiming the reduction, the assessment period of the payment is decisive (BMF guidance on section 35a). When the work was done and which date the invoice carries does not decide the matter. A bathroom renovation finished in December whose invoice is paid by transfer in January belongs to the new year for the customer. Anyone who wants the credit for the current year normally needs the work, the invoice and the transfer before New Year's Eve – and the tighter the window gets, the more it depends on the business issuing the invoice right after completion.
If a job runs over the turn of the year, there is a second lever in the business's hands. According to the guidance, instalment payments can only be taken into account if the corresponding split has been made for them and there is an invoice that meets the requirements of section 35a (BMF guidance on section 35a). An instalment invoice in December that shows the labour share of the instalment and is paid by transfer in December can therefore let the customer claim part of it for the current year. Whether they want that is their decision.
The turn of the year works in both directions, though. The basis of income tax is determined for each calendar year (EStG section 2), and the ceiling of 1,200 euros (EStG section 35a) is available only once per household. For a customer who has already paid larger trade invoices this year, paying in January may therefore be better than paying in December. A website that pushes everyone to act "before New Year's Eve" ignores exactly this case. A factual note leaves both options open: slots with completion this year, slots from January – and a request to settle the tax question with one's own tax adviser.
Planning also depends on the business's own workload. Across the skilled trades, the order backlog in the second quarter of 2026 covered 8.7 weeks (ZDH) on average, and capacity utilisation was 76 percent (ZDH). With an averagely full order book, an enquiry received at the start of October therefore reaches the front of the queue around the start of December – tight if completion, invoice and transfer are all supposed to fall in the same year. The more precisely the website says by when an order has to come in for completion this year, the less often an enquiry ends with a refusal on the phone.
Paid in cash means: no tax credit
The invoice the customer needs for the tax office
Whether the customer gets the credit depends to a large extent on the business's invoice.
According to the guidance, labour costs are the expenses for the trade service itself, including the machine and travel costs charged (BMF guidance on section 35a). Material costs and goods supplied are disregarded, consumables excepted. It must in principle be possible to determine the labour share separately from the information on the invoice; a percentage split of the invoice amount by the business is also permitted (BMF guidance on section 35a). The customer, however, may not estimate the share themselves (BMF guidance on section 35a). An invoice with a single lump sum and no split therefore leaves them without a basis. The VAT on the labour share does not have to be shown separately.
A worked example from the guidance shows how the split works: a bathroom renovation is invoiced at 5,000 euros (BMF guidance on section 35a), including 2,000 euros (BMF guidance on section 35a) of labour and travel costs. Only these 2,000 euros qualify; the tax reduction is 400 euros (BMF guidance on section 35a), which is 20 percent of the labour share. The remaining 3,000 euros (BMF guidance on section 35a), not broken down further in the example, have no effect. Had the invoice shown only the total, there would be no basis for determining the labour share.
- Labour, machines and travel separate from materials. As separate items or as a share stated by the business; an estimate by the customer is not accepted.
- Place of work. The address where the work was done if it differs from the billing address. Mark work done in the workshop separately.
- Period of work. When the work was done – important if a job runs over the turn of the year.
- Bank details and a request to pay by transfer. Cash only after pointing out that it does not count for the tax credit.
- Note on the retention obligation. For work on a property it belongs on the invoice to private customers.
- Instalments with a split. Every instalment invoice shows the labour share, otherwise it is not taken into account.
For work on a property, VAT law also requires an invoice when the customer is a private individual. For a taxable supply of work or other service connected with a property, the business must issue an invoice within six months (UStG section 14) of performing the service. The private customer has to keep the invoice, a proof of payment or other conclusive document for two years (UStG section 14b), and the invoice has to point out this obligation (UStG section 14). For the year-end case the six-month period is of little help: a business that finishes in December and invoices in February pushes its customer's payment into the new year.
Where the note belongs on the website
The note belongs where the customer decides on the service: on the individual service page, not as an advertising line in the site header.
If your services already each have their own page, add a short section there – for services with a high labour share such as painting, servicing or on-site repairs, not for pure deliveries of goods. Three statements are enough: that a tax reduction may apply to the labour share, how the invoice is structured and that payment has to be made by bank transfer. An example: "Our invoice shows labour, machine and travel costs separately from materials. A tax reduction under section 35a EStG may apply to this share. Please pay by bank transfer; the year of payment is what counts." The section carries a date, because ceilings are statutory values and can change.
Service page
One paragraph on the labour share per service, with a date. No amounts the customer could read as a promise for their own case.
FAQ entry
The question "Can I claim the work against my tax?" with an answer that names the rule, the invoice and the payment method.
Appointment slots
By when an order has to come in so that completion and invoice still fall in this year, and from when slots in January are free.
Enquiry form
A select field "Preferred timing" with "this year", "from January" and "flexible", so that urgent enquiries stand out.
Payment method
One sentence on bank transfer on the page about the process, so nobody pays cash at the door and then misses the credit.
Tenants and flat owners
A note that for them the credit runs through the service charge or annual statement, where separate timing rules apply.
The FAQ: one question, answered properly
On the page with frequently asked questions, the tax question is one that customers may ask before placing an order, and so it belongs in an answer that works without a call back.
The article on the FAQ page with real customer questions describes how to collect such questions. The tax question has a rule of its own: the answer explains the legal position in general and the part the business controls itself, that is invoice, payment method and timing. It does not calculate the individual case. XICflow provides the FAQ block for this; according to the documentation, all FAQ blocks on a page together produce one machine-readable question-and-answer block for search engines.
Question: Can I claim the work against my tax?
Answer: For trade services in your home, your income tax is reduced on
application by 20 percent of the labour costs, up to 1,200 euros a year
(section 35a EStG). Materials do not qualify. You need our invoice, which
shows the labour share, and a payment to our account. The year in which
you pay is what counts. Please check your personal situation with your
tax adviser.
As of: October 2026No tax promises on the website
Show year-end slots honestly
An appointment window only helps if it is accurate.
Instead of "slots still available", the page states what the business can actually commit to: by which date an order has to arrive for the work to be completed and invoiced this year, which services this applies to and from when slots in January are free again. A slim announcement bar at the top of the service page works well for this, because it is short and can link to the enquiry form. In the form, a select field "Preferred timing" with the options "this year", "from January" and "flexible" helps – the business sees at first glance which enquiries are pushing into December. The other preparations for the fourth quarter, from opening hours to a promotion page, are covered in the article on the year-end season.
- Mark services with a labour share. Which pages does the note concern? Pure deliveries of goods and new builds stay out.
- Add a note section with a date. Rule, invoice structure, payment method and a link to the FAQ.
- Extend the FAQ. One question on tax, one on slots until year end.
- Set and publish a cut-off date. Derived from your own workload, not from the wish for turnover.
- Check the invoice template. Labour, machine and travel costs separate, instalments with a split, note on the retention obligation.
- Tidy up in January. Remove the cut-off date, update year and date, compare the ceilings with the statutory text.
Tenants, flat owners and property managers
Not every job follows the New Year's Eve logic.
Tenants can also use the credit if their service charges include amounts for craft work and their share is shown in the annual statement or certified by the landlord or managing agent (BMF guidance on section 35a). Owners in a homeowners' association have their own timing rule: one-off expenses such as trade invoices are only taken into account in the year the annual statement is approved (BMF guidance on section 35a); the same applies to tenants. A job paid by a homeowners' association in December therefore as a rule only affects the individual owner in the year the statement is approved. For the business this means: the year-end note has no place in jobs for property managers; what matters there is the split of labour costs and an invoice the managing agent can carry over into the annual statement. How managing agents themselves keep owners and tenants informed online is shown in the article on the property management website.
How XICflow keeps the note easy to maintain
In XICflow you build service pages from blocks in the Flow Builder; the services template or one of the industry landing pages from the builder's templates serves as a starting point.
The note on the labour share becomes a text block of its own on the page, the tax question an entry in the FAQ block, the appointment window an announcement bar linking to the form, and in the form you create the select field for the preferred timing yourself. In January you change date, year and cut-off date in the same blocks without rebuilding the page. XICflow does not write the invoice, but the website explains in advance how it is structured and so anticipates a follow-up question.
What belongs on the page