Dutch tax on your holiday home
Are you living in the Netherlands? Holidays in our own country are becoming more and more popular, especially during the times we are in now. Whether it is at the beach, a lake, or a cabin in nature: there is a lot to explore. Therefore, a holiday home in the Netherlands can be valuable. It is the ideal way to escape from your daily hustle and bustle, as often as you want and without planning. Yet a holiday home is no exception, and you also have to pay tax on this.
How much tax do you pay on your holiday home?
You pay several types of tax on your holiday home (also called: second house). The taxes you pay are income tax, transfer tax, and property tax (OZB). The amount of these taxes differ. In this article, we explain it to you.
Your holiday home is usually not considered your primary residence. That is why your holiday home does not fall in box 1, but box 3. You then have to pay tax on the WOZ value minus the remaining debt on the house.
The amount and rules regarding transfer tax have changed this year: see the most recent transfer tax rules here. The bottom line is that the transfer tax on a holiday home has increased to 8% (previously 6%).
Property tax (OZB)
The property tax (OZB) is a tax levied by the municipality. Therefore, the amount of this tax depends on the district where your holiday home is located. It is a percentage of the WOZ value.
You want to live near the sea in the summer. Therefore, you decide to purchase a holiday home of € 250,000 in Zandvoort, for which you will take out a mortgage of € 100,000. Still, you are curious how much tax you have to pay in the first year: we explain it in this example.
Income tax. In this example, we assume that there are some extra savings of € 50,000. The total amount of box 3 amounts to (250,000 – 100,000 + 50,000) € 200,000. The tax-free allowance of €50,000 is deducted from this amount. The taxable capital, therefore, is € 150,000. The following calculation applies:
|Bracket||savings (0.03%)||investments (5.69%)|
|1 (until € 50,000)||€ 33,500||€ 16,500|
|2 (€ 50,000 – € 950,000)||€ 21,000||€ 79,000|
|TOTAL||€ 54,500||€ 95,500|
|Notional return||(0.03% X 54,500) € 16||(5.69% X 95,500) € 5,434|
So, the notional return amounts to € 5,450, on which a return of 31% is calculated. The total tax payable for 2021 will then be (31% x 5,450) = € 1,689.
Transfer tax. This one-off amount amounts to 8% of the WOZ value, which amounts to € 20,000.
Property tax. In Zandvoort, the amount of property tax is 0.0759% of the WOZ value of the house. The amount to be paid will therefore be (0.0759% of 250,000) € 189.75.
Next to purchasing your holiday home, in this case, you have to pay € 21,878.75 of tax in the first year (mainly due to the transfer tax). In the following years, the amount of tax to pay will be way lower. Besides, the advantage of having a holiday home is that if you decide to rent it out, the rental income is free from tax! See the rental income page for more information.
We are happy to help!
Are you planning to buy a holiday home, and do you have any tax-related questions? We are happy to help you! Feel free to contact us using the details below.