Our specialists have extensive experience on real estate transactions, both within the Netherlands as cross-border.
The owner-occupied home regulation in the Dutch Income Tax Act 2001 is constantly evolving, and interesting case law about principal residences appears regularly. Therefore, it is important to seek timely and regular tax advice regarding income tax matters. Expert advice is also essential when dealing with the treatment of your second home for income tax purposes.
A property located abroad must be declared in your Dutch income tax return, but this is certainly not always the case, as evidenced by investigations in France and Spain. In your Dutch income tax return, you must declare the foreign property, which is exempted from your Box 3 assets. A second property located abroad will (almost always) not be subject to taxation in the Netherlands, but rather in the country where the property is situated. The second property will be taxed according to the rules applicable in that respective country.
Under certain circumstances, borrowing money from your own private limited company (B.V.) can be fiscally attractive. Taking out a mortgage with your own B.V., for example, does not necessarily preclude the deduction of mortgage interest. However, there are several conditions that need to be met, and the tax authorities will scrutinize each situation carefully. Mortgage interest deduction in income tax is progressively being limited in the coming years. This makes it interesting to consider whether you might want to repay your homeowner’s debt to your B.V., either partially or in full. The experts at HVK Stevens regularly provide advice on repaying mortgage debts to your B.V.
Engaging in Short Stay rental of real estate can be fiscally advantageous, as it allows for the deduction of Value Added Tax (VAT). Generally, the rental of residential property is exempt from VAT, unless it involves Short Stay rentals. In the case of Short Stay rentals, a 9% VAT will be applicable to the rent. However, the paid VAT related to the specific Short Stay, including VAT on property renovations (at 21%, for example), will be deductible. It’s important to consider a potential “adjustment period” in this context.
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