Our specialists have extensive experience on real estate transactions, both within the Netherlands as cross-border.
The personal income tax’s home ownership scheme (eigenwoningregeling) is constantly changing and interesting case law on home ownership is appearing on a regular basis. Therefore, it is important to regularly, and timely, obtain tax advice regarding personal income tax. Advice is also essential when dealing with your second home in the personal income tax return.
Short Stay renting of property can be fiscally interesting because it is possible to deduct VAT on costs related to the residence. In general, renting out residential property is exempt from VAT, unless it involves Short Stay. For Short Stay, 9% VAT will be due on the rent. Nevertheless, the VAT paid on the relevant Short Stay, including, for instance, the VAT on the renovation of the building (21%), can be deducted. A so called “review period” (herzieningsperiode) may have to be taken into account.
A residence abroad must be declared in the Dutch income tax return, but – given the investigations in France and Spain – this does not always happen. In the Dutch income tax return you have to declare the property located abroad, it will be exempted for your “box 3” assets. A second home located abroad will usually not be taxed in the Netherlands, but in the country where it is located.
The amount of tax to be paid annually on real estate depends on the property value. This value is reassessed every year on the basis of a property assessment, which may, however, turn out to be too high. The real estate team of HVK Stevens can support you in the objection procedure against the WOZ assessment in order to arrive at a more realistic property value.
In certain instances, borrowing money from your own B.V. can be attractive for fiscal purposes. For example, entering into a mortgage with your own B.V. does not exclude the possibility of deducting mortgage interest. There are, however, a number of requirements that must be met and the tax authorities will examine each situation very carefully. The deduction of mortgage interest in the personal income tax (IB) will be progressively limited in the coming years. The specialists at HVK Stevens regularly advise on the repayment of mortgage debts to your private limited company.
If you are planning to rent out property, you will probably qualify as a VAT entrepreneur. We will be happy to advise you on the VAT obligations and on any VAT optimization possibilities.
HVK Stevens professionals have legal, tax and financial knowledge and experience
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