Household allowance 2022
In a nutshell, the household tax credit means relief from the tax burden you pay. You get a household allowance when you buy services such as cleaning, childcare and home repairs. Building services upgrades count towards home renovation. Find out more about the household allowance, how to claim it, how the 2022 changes will affect your life and what to consider when claiming the household allowance.
How does the household credit work?
You can deduct 40% of the proportion of the work invoiced by the company as a household allowance. This means that you can only deduct the cost of the work, not the cost of materials or travel. If you hire an employee, you can deduct 15% of their salary and the employer's incidental expenses.
A household allowance can be claimed for services ordered by.
- to your own household
- in your own or your spouse's parents' household
- in your own or your spouse's grandparents' household
- your own holiday home or second home.
A household deduction can be made for maintenance and basic improvements such as renovation work, electrical, plumbing and wiring work in a private house, and painting services. A deduction can also be made for household, care and maintenance work such as cleaning and yard maintenance.
How will the household tax credit change in 2022?
The main changes to the household tax credit in 2022 will mainly concern the purchase of cleaning, care and nursing services, but households using oil heating will also be encouraged to switch to a more environmentally friendly form of heating. These households will benefit from an increase in the household allowance for the work involved in the conversion.
In 2022, a two-year trial will be introduced, during which the household allowance will be increased from 40% to 60% for domestic care and nursing work. At the same time, the amount eligible for the household allowance for services in these sectors will be increased from €2,250 to €3,500. For purchased services in other sectors, the household allowance will remain unchanged. The aim of the experiment is to increase access to a range of care services, particularly for families with children and older people living at home.
The household allowance for the replacement of oil heating will be increased for the period 2022-2027, at the same rate as for care services. This means that 60% of the cost of the work will be reimbursed and the maximum deduction will be €3,500. Through this experiment, the government aims to encourage as many households as possible to switch from oil heating to a more environmentally friendly form of heating.
At the moment, the increase in the rebate only applies to households that give up oil heating. However, studies are also being carried out for other energy sources. The majority of households that give up oil heating will opt for an air-to-water heat pump or geothermal heating, but district heating will also continue to be used.
Take these things into account when applying for the household allowance
The household deduction reduces the amount of tax you pay, but if you have no tax to pay, you can't deduct it either. You can make a deduction by declaring it on your tax card or when you fill in your tax return. If you declare the deduction on your tax card, you will get the benefit immediately.
The deductible for the household allowance is EUR 100, from which no deduction can be made. The deductible always applies for a calendar year and is personal, i.e. people living in the same household pay their own deductible.
It is also possible to apply for the household allowance retroactively. If you have forgotten to claim the household allowance, you can ask the tax office to amend your tax return and get the allowance retroactively, for up to three years.
Take advantage of the household allowance - you can get a tax relief of up to €4500
When ordering household services or carrying out work related to the repair or renovation of your home, it is worth taking a moment to familiarise yourself with the deductions. You can make substantial savings by taking a household deduction on your annual tax return. Increases to the household deduction in 2022 will increase the amount and importance of the tax benefit. For a family of two adults, this means that up to €4,500 in tax relief in 2022. However, there are certain things to bear in mind to make sure you can take advantage of the benefit and make the most of it.
- Check where you order the service. To qualify for the household allowance, the company you use must be registered in the Pre-tax Register. You can easily check this on the YTJ website.
- In the case of a two-person household, you should only claim the household deduction on one person's tax return if the deductible expenses are less than half of the maximum deduction for one person. This is due to the deductible, as by splitting the deduction between the two of you, both of you will have the deductible deducted first. If the amount eligible for the household deduction exceeds the maximum deduction for one person, the deduction will be made from the tax of both.
You can always find up-to-date information on the household allowance on the Tax Administration's website at www.vero.fi/kotitalousvähennys
