Aug 31, 2016

Deduct your private rent

Some turmoil in entrepreneurial Holland: this August, the Dutch Supreme Court has confirmed that independent contractors who mainly work from an office in their rented private home, are allowed to deduct the complete rent payments.

 To compensate for private use an addition in the personal income tax will be applied.

This is actually not a new thing: it is already arranged in the PIT law. For most homes, this addition is 1.85% of the value of the real estate (to be decided by the city it sits in, open to objection procedures).

Usually, this addition is less than the total of annual rent payments. For example: a house worth EUR 150,000 could easily be let for EUR 8,000 per year. These costs would be deductible, against an addition of EUR 2,775. This benefit raises questions:

-          Are there any conditions? Yes, the home should be used for business ends for at least 10% (of the surface). If not, it is obligatorily private. Also, it has been remarked that the attribution of rent costs to the enterprise can only be done once, and not changed afterwards. However, there are many ways around it – many solutions.

-          Is the same thing possible for B.V. director-shareholders? Yes, the rent contract can be concluded by the B.V. (the company), and the director-shareholders gets an addition of 1,85% of the house value to the tax base of his personal income tax.

-          So… the tax authorities will pay half my rent? It surely seems so.

-          Why am I not an entrepreneur? Good question…

-          How can I benefit from this? Email us at or call +31 888 387 669 and we will analyze your personal situation, whether you are an entrepreneur or not (yet).

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