How to declare a double residence?

In summary

Declaring a double residence may seem complex, but it is essential to optimize your finances and comply with tax legislation. This guide will help you understand the necessary steps and the expenses you can deduct.

What is a double residence?

A double residence occurs when, for professional reasons, a taxpayer occupies two different homes. This may include having a primary residence and a second residence near the workplace.

Criteria for a double residence

For expenses related to a double residence to be tax deductible, certain strict conditions must be met. These criteria ensure that the double residence is not merely a personal choice, but a necessity imposed by professional constraints.

Professional obligation

Expenses for a double residence are only deductible if the secondary residence is imposed by professional reasons. This means the taxpayer must justify that their professional situation requires them to occupy two homes. This double residence must be independent of their will, and they must demonstrate that it is not just a preference, but a requirement resulting from their job.

For example, a transfer to another city or a professional advancement that requires staying close to the workplace are valid reasons. Conversely, if the double residence results from a personal convenience, such as the desire to live in two different regions for comfort reasons, the expenses will not be eligible for a tax deduction.

Minimum distance

One of the most important criteria for benefiting from this deduction is that the place of work must be at least 40 kilometers from the primary residence. This minimum distance is an objective measure to prove the necessity of a double residence. It demonstrates that the taxpayer cannot make a daily round trip between their main home and workplace without incurring excessive constraints.

If the distance is less than 40 kilometers, justifying the need for a double residence will be difficult, except in particular cases such as a very long commute due to road or transport conditions.

Attempts to get closer

Another essential criterion is to prove that the taxpayer has made efforts to bring their residence closer to their workplace, but these efforts have been unsuccessful. They must demonstrate that they explored options to relocate closer, but that circumstances beyond their control prevented it.

These circumstances may include:

• Spouse’s employment: If the spouse works near the primary residence and cannot move for professional reasons, this can justify maintaining a double residence.
• Children’s schooling: If moving would compromise children’s educational stability, this can also be a valid reason.
• Job insecurity: If the employment driving the double residence is temporary (fixed-term contract, seasonal work, probationary period), relocating the entire family would be inadvisable.

Deductible expenses

Within the framework of a double residence, it is possible to deduct several types of expenses from your taxable income. These deductions are essential to offset additional costs associated with occupying two homes. Here are the main categories of deductible expenses.

Rent and charges

The first expense category concerns the rent of the second residence. If you are a tenant of a secondary residence for professional reasons, the amounts paid for rent are deductible from your taxable income. This also includes charges related to living in that home, such as:

• Water bills, essential for daily life in the residence.
• Electricity expenses to ensure a suitable working and living environment.
• Gas costs for heating or cooking.

These expenses often represent a significant burden for taxpayers with double residences, highlighting the importance of being able to deduct them.

Travel expenses

Travel between the primary residence and the secondary residence is also eligible for deduction. Generally, you can deduct expenses for a round-trip per week to reach your family home. These expenses may include:

• Per-kilometer costs, calculated based on the official rate depending on the distance traveled and your vehicle’s power.
• Train tickets or other public transport used to reach your family, provided it is the most reasonable method for the trip.

These regular displacements are often costly, emphasizing the importance of including them in your actual expenses to reduce your tax burden.

Loan interest

If you have purchased a property to serve as a secondary residence, the interest on the loan taken for this purchase is also deductible. However, this deduction is subject to certain conditions:

• The property must be used as a long-term secondary residence, meaning for an extended period, not for temporary or occasional use.
• Only the interest on the loan is deductible, not the repayment of the principal borrowed.

Acquiring a secondary residence is a significant investment, and the possibility of deducting loan interest helps reduce the financial burden on the taxpayer.

Non-deductible expenses

Within the framework of a double residence, although several expenses are eligible for tax deduction, some costs cannot be deducted from taxes, even if related to occupying the second home for professional reasons. Here is an overview of non-deductible expenses.

Internet and telephone subscriptions

Internet subscriptions and phone lines, although essential for daily life and often used for professional purposes, are not eligible for tax deduction. This is because these services are considered personal expenses, unless you can prove that the subscription is exclusively dedicated to professional use. If not, these costs must be borne by the taxpayer without tax benefit.

Decoration and furnishings expenses

Any amount spent to improve the aesthetics or comfort of the secondary residence cannot be deducted. This includes:

• Expenses related to interior decoration (paintings, furniture, curtains, etc.).
• Renovation work that is not essential for the use of the property (such as installing a new kitchen or remodeling a bathroom).

These expenses are regarded as personal choices, and although they enhance quality of life, they are not recognized as professional expenses that can justify a deduction.

The rental value of the property

Even if you own your secondary residence and use it for professional reasons, it is impossible to deduct the rental value of this property. Indeed, the tax authorities consider that you occupy this residence on personal grounds, even if it is necessary for your work. Unlike rent payments for a rented property, the rental value does not represent a direct expense and cannot be included in your actual expenses.

Procedures for declaring a double residence

To declare a double residence, it is important to carefully complete your tax return by specifying all actual expenses. You must provide a detailed justification of the incurred costs, as well as the professional reasons that led to occupying two homes.

Deductible and non-deductible expenses

Deductible travel expenses

Supporting documents to keep

Distance criteria and eligibility conditions

Maximum expenses per expense type

Conclusion

Declaring a double residence can help reduce your taxes, but it requires a good understanding of the criteria and deductible expenses. By following the necessary procedures, you can optimize your tax situation while remaining compliant with legislation.

For further information