Published:2024-11-20
Tags:WOZ, bijtelling, dutch tax, eigenwoningforfait, house tax, mortgage, villa, villa tax, villataks, villatax, wealth tax

Villa tax and eigenwoningforfait: how does it affect you as a homeowner in The Netherlands

Are you a homeowner in the Netherlands? If so, you’ve likely heard of the mortgage interest deduction, which allows you to deduct the interest on your mortgage from your taxable income. This provides a significant tax benefit. However, there is also a downside: the eigenwoningforfait (fixed sum on main residence). This is an amount based on the WOZ value of your home, which you must add to your taxable income in box 1.

Fixed sum on main residence and deemed income surcharge

For most homeowners, the deemed income surcharge (bijtelling) is relatively limited. In 2024, the fixed sum on main residence (eigenwoningforfait) will be 0.35% of the WOZ value. For example, if your home has a WOZ value of €500,000, your eigenwoningforfait will be €1,750. Often, the mortgage interest deduction is higher than this amount, meaning you still benefit overall.

Additional deemed income surcharge for higher-value homes

For homes with a WOZ value above €1,310,000, a different rule applies, commonly referred to as the villataks / villa tax. Owners of these higher-value homes face increased deemed income surcharge. For the first €1,310,000, the forfait is €4,585. For any value above that, the rate is 2.35%.

Example:
If your home has a WOZ value of €1,500,000, the imputed income is calculated as follows:

  • For the first €1,310,000, the forfait is €4,585.
  • For the remaining €190,000 (€1,500,000 – €1,310,000), the rate is 2.35%, resulting in €4,465.

In total, you would pay €8,050 in eigenwoningforfait.

 What about homes without a mortgage?

Until 2018, homeowners without a mortgage were exempt from the eigenwoningforfait. Since 2019, this has changed, with the deemed income surcgharge being phased in gradually. In 2023, you add 83.33% of the eigenwoningforfait to your taxable income, and in 2024, this decreases to 80%. This percentage will drop by 3.33% annually until 2048, when the deduction will be completely eliminated.

Objection to the villa tax: is it possible?

Questions have been raised about the legality of the eigenwoningforfait, particularly about the villa tax being applied to homes with a WOZ value above €1,310,000. This could potentially conflict with the European Convention on Human Rights (ECHR), following recent rulings regarding box 3. You can file an objection to your income tax assessment if this higher deemed income surcharge is included, but it must be done within six weeks of receiving the final assessment.

TaxSavers

Do you have questions about the eigenwoningforfait, villa tax, or other topics?

At TaxSavers, we’re here to help. We assist in managing your taxes effectively, ensuring you do not pay more than necessary. Contact us today to gain insight into your situation and maximize your tax benefits.

By staying informed about the rules surrounding the villa tax, you may be able to achieve significant tax savings.

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