Household Tax Deduction

The household tax deduction (kotitalousvähennys) is a Finnish tax credit that allows individuals to deduct a portion of the labor cost of home maintenance, renovation, and installation work performed at their primary residence or vacation home. The deduction is 40 percent of the labor portion of the invoice (not materials), with a maximum deduction of 2,250 euros per person per year and a minimum threshold of 100 euros.

The deduction applies to a wide range of home services including plumbing, electrical work, painting, chimney sweeping, ventilation maintenance, heat pump installation and service, appliance installation, cleaning, and landscaping. Both spouses can claim the deduction separately, so a couple can deduct up to 4,500 euros combined. The deduction is subtracted directly from the tax payable, making it a powerful incentive for professional home maintenance.

To qualify for the deduction, the work must be performed by a company or entrepreneur registered in the Finnish Tax Administration's prepayment register (ennakkoperintärekisteri). The payment must be made to the company's bank account — cash payments do not qualify. The invoice must clearly separate labor costs from material costs, as only the labor portion is deductible. Work performed by family members does not qualify.

The deduction is claimed in the annual tax return by reporting the amount of labor costs paid during the tax year. The Tax Administration may request copies of invoices and proof of payment, so all documentation should be retained for at least six years. Many homeowners underutilize this deduction — if you hire professionals for any home maintenance or renovation work, check whether the labor costs qualify for the household tax deduction.