How to declare dual 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 dwellings. This may include having a primary residence and a second residence near the workplace.

The criteria for 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 simply a personal choice, but a necessity imposed by professional constraints.

Professional obligation

Expenses of 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 occupying two dwellings. This double residence must be independent of their will, and they must demonstrate that it is not merely a preference but a requirement resulting from their employment.

For example, a transfer to another city or a professional advancement requiring staying near 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 tax deduction.

The minimum distance

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

If the distance is less than 40 kilometers, justifying the necessity of a double residence will be difficult, unless under special conditions such as a very long commuting time due to road or transport conditions.

Attempts at proximity

Another essential criterion is demonstrating that the taxpayer has made efforts to bring their residence closer to their workplace, but these efforts have been unsuccessful. They must prove they explored options to relocate closer, but 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 relocating would compromise the children’s educational stability, this can also be a valid reason.
• Job insecurity: If the work causing the double residence is temporary (fixed-term contract, seasonal work, probation period), it would be inappropriate to move the whole family.

Deductible expenses

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

Rent and charges

The first expense involves rent for 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 occupying this dwelling, such as:

• Water bills, essential for daily life in the dwelling.
• Electricity expenses that ensure an adequate work and living environment.
• Gas costs for heating or cooking.

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

Travel expenses

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

• Kilometric expenses, calculated using the official rate based 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 mode for the trip.

These regular trips are often costly, hence the importance of including them in your actual expenses to reduce your tax liability.

Loan interest

If you have purchased a property to serve as a secondary residence, the interest on the loan contracted 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, i.e., 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 ability to deduct loan interest helps reduce the financial burden carried by the taxpayer.

Non-deductible expenses

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

Internet and phone 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 interior work

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

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

These expenses are considered personal choices, and even if they improve quality of life, they are not recognized as professional costs justifying a deduction.

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 administration considers that you occupy this dwelling for personal purposes, even if it is necessary for your work. Unlike rent paid for a rented property, the rental value does not represent a direct expense and thus cannot be included in your actual costs.

Procedures to declare double residence

To declare a double residence, it is important to properly fill out 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 dwellings.

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.

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