Is erfpacht tax deductible?
Yes, your periodic erfpacht payments are deductible, but the buyout sum never is. If the ground under your home isn't yours, you pay the owner an annual or monthly amount, the erfpachtcanon. That recurring payment counts as a cost of your own home, in the same Box 1 category as mortgage interest. Buy the canon off in one lump sum instead, and that sum is never deductible. A buyout that a seller or notary spreads over several years stays a buyout. A genuinely prepaid periodic canon is a different case, explained below.
This page covers the Box 1 rule for your own home and the buyout-loan exception. It also covers the high-income cap and the Box 3 rules for a rented-out or second home.
In short
Periodic canon is deductible as a cost of your own home, the same category as mortgage interest.
The buyout sum is never deductible, even when a seller presents it as spread over several years.
Interest on a buyout loan can be deductible if the loan qualifies as eigenwoningschuld. That is the qualifying mortgage debt on your own home. The bijleenregeling (the additional-loan rule) can limit that amount.
Related costs stay non-deductible: building insurance, a home-linked capital insurance, savings-account deposits and notary costs for reissuing the erfpacht.
High earners get less deduction. Above €78,426 Box 1 income before deductions in 2026, you deduct erfpacht and other home costs at 37.56% at most.
Rent out the property instead, and the canon isn't deducted as a cost. It lowers the home's value for your Box 3 wealth tax.
What exactly can you deduct from your periodic erfpacht payments?
Your recurring erfpacht, opstal or beklemming payment is deductible in the year you pay it.¹ Take Tom, who bought a canal-side house in Amsterdam on erfpacht ground. He pays an annual canon to the ground owner. He reports it as a cost of his own home, alongside his mortgage interest.
The rule holds for a genuinely recurring payment. A one-off buyout of the whole remaining term is not a recurring payment. It falls outside this deduction, however you package the buyout.² Opstal and beklemming are two related Dutch ground rights. The same deduction rule applies to all three. Costs around the property itself stay outside this deduction. Insurance premiums and notary costs for reissuing the erfpacht are not deductible.
| Cost | Deductible? |
|---|---|
| Periodic erfpacht, opstal or beklemming payment | Yes |
| Buyout sum (afkoopsom) for the remaining term | No |
| Interest on a loan taken to finance the buyout | Yesif the loan qualifies as eigenwoningschuld, the bijleenregeling can limit it |
| Building insurance (opstalverzekering) premiums | No |
| Home-linked capital insurance (kapitaalverzekering eigen woning) premiums | No |
| Deposits to a home savings account (spaarrekening eigen woning) | No |
| Notary costs to reissue the erfpacht (heruitgifte) | No |
Does the high-income deduction cap also apply to erfpacht?
Yes. If your Box 1 income before deductions is above €78,426 in 2026, your erfpacht deduction is capped along with your mortgage interest.⁴ The Belastingdienst calls this the tariefsaanpassing, the rate adjustment for the highest tax bracket. It doesn't single out mortgage interest. It applies to every deductible cost of your own home, erfpacht payments included.
In 2026 the adjustment rate is 11.94%, which limits your top-bracket deduction to 37.56%, the same rate as the second tax bracket. The cap is the top bracket rate of 49.50% minus the adjustment rate. In 2025 the cap sat at 37.48%. The Belastingdienst calculates the correction automatically when you file, so you don't work it out yourself.
| Figure | 2025 | 2026 |
|---|---|---|
| Box 1 income before deductions | €76,817 | €78,426 |
| Maximum deduction rate, top bracket | 37.48% | 37.56% |
How does this work out for Tom's own house?
Tom deducts his full annual erfpacht canon alongside his mortgage interest. He doesn't calculate anything extra himself. His canon is an illustrative €2,400 a year. The real rate depends entirely on his ground contract and municipality. Never assume a fixed percentage. He enters it as a cost of his own home on his return. The Belastingdienst adds it to his other home costs (eigenwoningkosten) automatically.
Say Tom's neighbour instead buys off her remaining 40-year term for a lump sum, financed with a loan. She can't deduct the buyout itself. She can deduct the interest on that loan if it qualifies as eigenwoningschuld. The bijleenregeling can limit how much. Two neighbours, two erfpacht situations, two different outcomes, and both are correct.
What if you rent out the property instead of living in it?
Rent it out, and the canon isn't a deductible cost anymore. Instead, it lowers the property's value for your Box 3 wealth tax. A rental or second home falls in Box 3, not Box 1. There you don't deduct individual costs like canon or maintenance. You're taxed on the property's value instead.
The WOZ value is the municipal valuation of your property. Erfpacht changes that value calculation directly: you reduce the WOZ value by seventeen times the annual canon before declaring it as a Box 3 asset.⁵ A higher canon lowers the taxable value. A bought-off plot doesn't get this reduction, since there's no future canon left to subtract. Two more rules can follow. The leegwaarderatio is a discount for a property let under Dutch rent protection. With rent protection the leegwaarderatio can lower the value further. A separately let part of a larger building has its own calculation. Our Box 3 wealth tax guide explains how Box 3 works in full.
What should you check before you file?
Check your erfpacht contract for the exact payment schedule. Then confirm your income doesn't trigger the high-income cap. Some contracts fix the canon for the full term. Others let the municipality or ground owner revise it periodically. Read what you actually signed, rather than assume a standard percentage. Weighing up a buyout? Work out the loan-interest deduction first. That's often the only deductible part of the deal.
Bought a house on erfpacht ground this year? File the periodic canon as a cost of your own home from day one. Keep the payment confirmation from the ground owner with your records. Arrived or left the Netherlands during the year? Ask us which part of the year your own-home deduction covers. Tom does exactly this each year with his canal-side house. See our mortgage advice page for help with a buyout loan.
“People assume erfpacht is one fixed rule. It isn't. The difference between a periodic payment and a buyout changes what you can claim. That distinction is exactly where returns go wrong.”
¹ belastingdienst.nl, Eigen woning, welke kosten mag ik aftrekken en welke kosten niet? · Accessed
² Kennisgroepen Belastingdienst KG:051:2023:2, 06-06-2023 · Accessed
³ belastingdienst.nl, Kosten voor afkoop rechten erfpacht, opstal of beklemming · Accessed
⁴ belastingdienst.nl, Minder aftrek voor uw eigen woning als u een hoog inkomen hebt · Accessed
⁵ belastingdienst.nl, 2e woning (zoals een vakantiewoning) · Accessed
Common questions about erfpacht and your tax return
What is erfpacht?
Erfpacht is a long-term right to use land that someone else owns, most often the municipality. Instead of buying the ground under your house, you pay the owner a recurring amount, the canon. That payment buys you the right to use it. Your house itself is still yours. You only lease the ground.
Can I deduct my erfpacht canon if I've just bought a house?
Yes, from the first payment you make. File your periodic canon as a cost of your own home. Use the same category as mortgage interest, starting the year you take ownership.
Is the erfpacht buyout sum ever deductible?
No, the buyout itself is never deductible, whatever the invoice says. Only the interest on a loan you take out to pay that buyout usually qualifies. That interest counts only if the loan qualifies as eigenwoningschuld.
Does erfpacht affect what I can borrow for my mortgage?
It can, since lenders weigh the canon into your monthly costs. A mortgage advisor checks this against your specific ground contract, not a general rule. Get your situation reviewed before you make an offer. Read our mortgage page for how lenders weigh a canon in your monthly costs.
I'm renting out a house on erfpacht ground, does the canon still count?
No, not as a deductible cost. A rented-out property falls in Box 3. There the canon reduces the taxable value instead, usually by seventeen times the annual amount.
Where do I find my actual erfpacht canon rate?
Check your erfpacht contract or your municipality's current canon-rate table, never a general percentage you've read online. Rates vary by municipality and by contract. Older contracts can carry very different terms from new ones.