It’s something that has probably crossed your mind at some point: Why don’t I just rent out my home when I’m on holiday? Especially if you’re going away for a longer amount of time, it might be something to consider! You just take some nice photos of your home, check what rules there are with the municipality, and put your property online. Easy does it, right? Income tax is probably not something that comes to mind, let alone VAT.
However, there are three types of taxes you may have to deal with if you temporarily rent out your property: tourist tax, turnover tax and income tax. Tourist tax is regulated differently in each municipality, so it’s best to check with your municipality what is required to rent out your home. It’s also possible that the platform you use to rent out your property will arrange this for you.
Turnover tax
Are you an entrepreneur and would you like to rent out your house? In that case, handling turnover tax is quite simple. In the Netherlands, you have to calculate 9% VAT on all income generated by offering accommodation. You can already take this percentage into consideration when setting the price you charge per night for your house. Report the income to your bookkeeper when filing your quarterly tax return so you can pay the VAT. If you’re not yet an entrepreneur, you may still have to pay VAT on your income. If you’re in doubt about this, it’s useful to check with the Dutch Tax and Customs Administration. However, you can offset the VAT on your expenses against the income.
Income tax
From 2024, income generated on platforms such as Vinted, Marktplaats, but also AirBnB will be reported to the Dutch Tax and Customs Administration. This means they’ll be aware of any money you made through these platforms. To report this income correctly, there are two questions you should ask yourself:
- How much work did you put into renting out the property?
- What expenses did you incur?
And again, the main question here is: Can the rental be seen as a business? In the case of temporary letting, this depends on the work done for this purpose.
Do you clean the house yourself, or do you hire someone to do this for you? Do you also offer breakfast, or do you leave this to a caterer? Maybe you let the person renting it arrange everything themselves? If you spend time and effort taking care of the accommodation, it’s regarded as income from work, and will be taxed at 100% through your profit from business (if you’re an entrepreneur, of course) or as income from other work.
If renting out your property doesn’t require any effort from your side, the proceeds are seen as part of your income from your own home, and 70% of this is added to your taxable income.
In both cases you may deduct the expenses you incurred from the income. This only applies to costs directly related to the rental, such as cleaning costs or the costs you pay to the rental platform. So ask yourself the following question: Would I have had these expenses, even if there was no rental? Is the answer no? Then they are deductible expenses.
So, the math goes like this: rental income – expenses = income declared in the tax return.
As you can see, temporarily renting out your property involves a bit more than taking nice pictures of the interior. Have you rented out your property in the past year? Don’t forget to report this income to your bookkeeper.
