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Welcome to the Expatax Knowledge Base containing hundreds of answers to questions we received about topics concerning tax, payroll, accounting, legal, business etc. related to the Netherlands. Search in our Knowledge Base or browse the different categories. Expatax is a Dutch tax and accounting firm specialized in assisting international workers, freelancers and companies. Don't hesitate to contact us if you need assistance or check our website.


Taxation of second home in the Netherlands and income related to it

Question:

My partner and I co-own an appartment in the NL. I recently sold property in my home country and I am thinking of buying a second appartment in the NL as an investment and generating some additional income from renting it out. What taxes would apply to that second home and the rental income?

Answer:

The appartment in NL is considered to be your main residence. This property is taxed in Box 1 which means that the mortgage interest can be deducted. The second property will be taxed in Box 3 since you will rent it out without the intention to use it as your main residence on short notice. 

In Box 3 not the real rent is taxed but a fictitious income of 4% of the value of the property on 1 January (reduced with an outstanding debt). This is also applicable if you have the 30% ruling. Under this ruling certain assets are exempted from taxation in Box 3 but this doesn‘t apply to a second property in the Netherlands. 

You can find more info about Box 3 on https://www.expatax.nl/box-3.php

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