Tax reductions for energy-related renovations such as the installation of modern heating systems only become effective once the invoice has been paid in full. This decision affects owners who modernize their heating systems and expect tax benefits. This is the result of a ruling by the Federal Fiscal Court (IX R 31/23).
In this case, the plaintiffs had replaced their heating system with a new gas condensing boiler worth 8,000. They paid the costs for this in monthly installments of 200 euros. Since March 2021, the couple had paid 2,000 euros. They now wanted to claim the costs for 2021 against tax on their next income tax return. However, the tax office rejected the tax reduction. It can only be applied once the last installment has been paid. This was not the case for the couple until 2024.
The regulation underlines the importance of full payment before claiming tax relief. It also illustrates that although tax incentives are available, their effects can be delayed, depending on the taxpayer's method of payment. Owners should take this into account in their financial planning.
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