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Property Taxes in the Netherlands

Updated on Monday 19th October 2020

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Property-Taxes-in-the-NetherlandsForeign citizens and companies are allowed to buy properties in the Netherlands under the same regulations as Dutch nationals. Once a property is purchased, it will attract its registration with the Land Register and the payment of specific taxes.
 
The property tax in the Netherlands is made of two important components, the first one, which must be paid by the owner of the property, and the second one, which must be paid by the user (the person or company who leases or rents the respective property).
 
Below, our company formation agents in the Netherlands offer detailed information on the property tax and its payment. We can also help you set up a business in this country.
 

The main taxes related to buying real estate in the Netherlands

 
The purchase of real estate in the Netherlands attracts the payment of various taxes since the beginning of the transaction. Among these, the following must be considered:
 
  • - the property tax which is paid by both natural persons and companies;
  • - companies must also pay the transfer tax in the case of immovable real estate for commercial purposes.
 
There are several aspects that need to be considered when it comes to the property tax in the Netherlands and among these are the following:
 
  1. the transfer tax must be paid by company shareholders when their contribution to the share capital is made of real estate;
  2. the transfer tax must be paid by shareholders in all types of legal entities, including partnerships;
  3. the payment of the real estate transfer can be made through a transfer deed authenticated by a public notary;
  4. various tax exemptions are available for property tax payments in the Netherlands.
 
Our local consultants can offer more information on property taxes that need to be paid in the Netherlands.
 

How is the property tax in the Netherlands calculated?

 
When it comes to the payment of the property tax imposed on residential real estate, the value of the property depends on the WOZ (Wet Waardering Onroerende Zaken) value, which is a fraction of the value of the property as computed by the local tax authorities. This is why, the amount of money paid as a real estate tax in the Netherlands is different from city to city.
 
The WOZ value is calculated on a yearly basis and it is based on the Valuation of Immovable Property Law.
 
It should be noted that the WOZ value is also imposed on property rentals and leases in the Netherlands.
 
Property taxes are complex matters which can be explained by our agents in the Netherlands. You can also ask any other questions related to the Dutch taxation system.
 

Non-residents and the property tax in the Netherlands

 
As mentioned earlier, non-resident citizens and companies are allowed to own real estate in the Netherlands, and alongside their property rights, they are also required to pay the property tax.
 
The property tax in the Netherlands is paid only on the real estate owned in this country and will be calculated under the same Valuation of Immovable Property Law.
 
We offer various accounting services to resident and no-resident clients, therefore if you need assistance, do not hesitate to enquire about our services.
 

Dutch property taxes and the Box System

 
As many residents are already accustomed with the Dutch taxation system, it is a known fact that in order to establish the payment of certain taxes, the Box System is employed. In the case of the property tax in the Netherlands, the following boxes must be checked:
 
  • - Box 1 if the property is used as a place of residence by the taxpayer ;
  • - Box 3 if the property or properties owned are not under as places of residence.
 
All tax returns must be filed with the Tax and Customs Administration in the Netherlands in order for the property tax to be calculated.
 

Rates of the property taxes in the Netherlands

 
The rates of the property tax applicable in the Netherlands vary from one city to another, however, they are calculated following the same formula.
 
Even so, the following aspects need to be considered when paying the Dutch property tax, especially since new regulations have been put in place starting with 2020, hence you should mind the next information:
 
  • - the WOZ value for rented properties is set at 0.60% for real estate valued at less than 1,090,000 euros;
  • - for properties evaluated above this amount, the WOZ value is 2.35%;
  • - for properties brought on mortgage where the interest is deductible, the deduction rate is 49.50%;
  • - a tax correction rate of 3.50% is applied to deductible interests.
 
For more information on the property tax in the Netherlands, please contact us. You can also rely on if you want to open a Dutch company.

 

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