Is horse insurance tax-deductible? How to optimise your expenses
16.11.2025
7
Minutes
Katrin Straub
Managing Director at nextsure
The costs of keeping a horse can quickly reach four-figure amounts per year. Find out under which conditions your horse insurance can be claimed as a tax-deductible expense and how you can reduce your financial burden.
The topic in brief and concise terms
For private individuals, only horse owner liability insurance is theoretically tax-deductible, but it usually fails because of the maximum limits for pension provision expenses.
If the horse is used for business purposes (e.g. riding school, breeding), all insurance policies are fully tax-deductible as business expenses.
A clear intention to make a profit must be demonstrated to the tax office to avoid being classified as a tax-irrelevant hobby activity.
Basics of the tax deductibility of horse insurance
The tax treatment of your horse insurance depends on one factor: how the animal is kept. The tax office makes a strict distinction between private and business use. For horses kept for private purposes, the tax authorities recognise only one type of insurance, subject to certain conditions. Horse owners’ liability insurance can count as a precautionary expense. Other policies such as a horse health insurance policy or surgery cover count as private living expenses and are therefore not tax-deductible. If the horse is demonstrably used for business purposes, however, you can claim all insurance costs as business expenses, which can lead to annual savings of several hundred euros. This clear distinction is the starting point for any tax optimisation.
Correctly claim deductions for private horse owners
Where do I enter horse liability insurance on my tax return?
As a private horse owner, you can claim the premiums for horse liability insurance as other precautionary expenses. For this, the “Vorsorgeaufwand” schedule in your income tax return is provided. You enter costs of, for example, 150 euros per year in line 50. However, this option only exists in theory for nine out of ten taxpayers. Most already fully use up the applicable maximum amounts through other insurance policies. A correct entry at least secures you the chance of a small tax saving.
Maximum amounts as a limiting factor
The legislator limits the deduction for other precautionary expenses to strict maximum amounts. For employees and civil servants, the limit is 1,900 euros per year. Self-employed persons can claim up to 2,800 euros annually. This amount is usually already reached or even exceeded by contributions to statutory health and long-term care insurance. An employee with a gross income of 45,000 euros already pays over 4,000 euros for these two insurance policies. That leaves no room for deducting horse liability insurance. Other precautionary expenses include, among others:
Private liability insurance
Accident insurance
Occupational disability insurance
Term life insurance
The tax relief provided by horse liability insurance is therefore, for most private individuals, excluded in practice. By contrast, business use opens up far greater potential.
Full tax deductibility when the horse is used for business purposes
When is a horse classed as business assets?
A horse is recognised for tax purposes as business assets if it directly contributes to the generation of profit for your company. This is clearly the case for a riding school operator with five school horses. A breeding operation with the aim of selling foals also meets this requirement. Other recognised business uses include use as a therapy horse or in agriculture and forestry. Proof of a clear intention to make a profit is crucial for the tax office. Without this evidence, there is a risk of it being classified as a hobby, which would wipe out all tax advantages.
Which insurance costs can be deducted as business expenses?
If the business use is recognised, you can deduct all horse-related insurance costs as business expenses for tax purposes. This directly reduces your taxable profit. An equestrian business with ten horses can therefore claim over EUR 3,000 a year in insurance costs. The main deductible items are:
horse health insurance
horse transport insurance
breeders’ and riding instructor liability insurance
This comprehensive deductibility represents a significant financial advantage compared with private ownership. However, care is needed when distinguishing this from private hobby activity.
Expert knowledge: Avoiding the tax trap of hobby activities
The tax office examines horse businesses very closely to determine whether there is an intention to make a profit. If only losses are made over many years, the activity may be classified as a “hobby”. This means that the losses are no longer recognised for tax purposes and may not be offset against other positive income. A ruling by the Federal Fiscal Court made it clear that keeping horses purely for private purposes does not constitute an agricultural business, even if a foal is occasionally bred. Breeding with only two or three mares is often viewed critically by the tax courts. A proper set of accounts and a plausible business plan are therefore essential. Our expert tip: keep detailed records of all income and expenditure and prepare a profit forecast for the next three to five years. This will enable you to demonstrate your professional intentions to the tax office and minimise tax risks.
Assess your individual situation and unlock potential
The tax deductibility of your horse insurance is complex and depends on your individual situation. While private owners benefit only in the rarest of cases, commercial owners can achieve significant savings potential of over 30 per cent of insurance costs. A precise analysis of your intended use and thorough documentation are the keys to success. The right insurance structure not only protects your animal, but also optimises your finances. Professional advice helps you set the right course. Request an individual risk analysis now: Have your insurance situation reviewed free of charge and receive concrete optimisation suggestions.
More useful links
Laws on the Internet provides detailed information on Section 10 of the Income Tax Act (EStG), which governs the tax deductibility of special expenses.
Laws on the Internet explains Section 9 of the Income Tax Act (EStG), which deals with tax-deductible business expenses.
Laws on the Internet provides the full text of Section 833 of the German Civil Code (BGB) on animal keeper liability.
FAQ
Is equine surgery insurance tax-deductible?
For privately kept horses, horse surgery insurance is not tax-deductible. If the horse is part of business assets (e.g. for a riding school), the premiums can be claimed as business expenses.
Where exactly do I enter horse liability insurance in my tax return?
Enter the contributions for horse liability insurance in the “Anlage Vorsorgeaufwand” in line 50 (“Other miscellaneous precautionary expenses”) of your income tax return.
What is the difference between business expenses and pension contributions?
Business expenses are costs incurred by a business that reduce profit (e.g. insurance for a school horse). Provision expenses are private expenses for cover (e.g. liability insurance) that are deductible as special expenses only up to a statutory maximum amount.
What happens if the tax office classifies my horse keeping as a hobby?
If your horse keeping is classified as a hobby, the tax office will not recognise the associated losses. You can then no longer offset these losses against other positive income (e.g. from employment), which leads to a higher tax burden.
