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Do you have one or maybe multiple houses? And do you want to (partly) rent it out? From a tax point of view, there are a number of consequences that you must take into account. On this page, we will tell you all the tax-related consequences when you start renting out your house.
There are different situations when you are going to rent out your house. There are also other tax consequences here. We will explain the consequences per situation, so you know exactly where you stand.
1. You are going to rent out your own house
This concerns a house that is your main residence. However, there is a possibility that you have to leave for a while, and you will not be staying in your own house. For example, for work. Then, it is understandable that you want to rent out your home to someone else for this period.
What is useful to know is that you must state 70% of the rental income as ‘income from temporary rental’ in box 1.
You are, however, entitled to several deductible items. Firstly, you retain the right to mortgage interest relief. But you can also deduct the costs that are directly related to renting out your home. You can think of gas, water, and electricity, cleaning costs, but also the costs you incur to offer the rental.
2. You are going to rent out part of your own house
This concerns renting out a room or floor. You live in it yourself but rent out a part of your house.
You do not always have to pay tax on this. There are several exemptions, these are called “room exemptions”. If you meet the conditions for room exemption, you do not have to state the rental income at all. Besides, you also retain the right to the mortgage deduction. You do have to add the notional rental value to your income in box 1.
If you want to get the exemption, you must meet the following conditions:
- Rental income was lower than € 5,506 (2020) and € 5,668 (2021);
- During the entire rental period you and the tenant(s) were registered at the address;
- It is not an independent living space (own kitchen and toilet);
- It is not a short-term holiday rental.
If you do not meet the conditions mentioned above, the same applies as in the next situation. Also, you have to state the rented part of the home acquisition debt as debt in box 3.
3. You are going to rent out your second house
This concerns a house that you own, but that you do not live in yourself. This can be a holiday house, for example. In this situation, it works slightly differently.
Your second house is seen as an asset by the Belastingdienst. For this reason, you must state the WOZ value in box 3 as “other immovable property”. In this case, you do not have to state the rental income.
On the other hand, you can state the remaining mortgage on this house as debt in box 3, so you only pay tax on the value of the rented house minus the debt on the rented house.
4. You are going to rent out a house that is for sale
When you put a house up for sale but you still rent it out via the Leegstandwet, you do not have to state the rental income at all. During the rental period, you must state the house in box 3. In addition, you may no longer deduct the mortgage interest.
5. You provide extra service with the rental
For example, providing bed linen, towels, or food and drinks. Keep in mind that this income might fall under “income from other work” or “profit from business”. This depends on certain factors. Do you provide extra service? Then it is best to contact a tax advisor.
We are happy to help you!
Do you still have questions about renting out your home after reading this page? Or do you have other tax-related questions? Feel free to contact us for an introduction using the information below.
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