The term “short stay” is usually encountered in the context of VAT. In the case of Gelderland District Court However, the issue at hand was the application of the MIA.
Short stay
The term ‘short stay’ refers to the temporary occupation of residential accommodation. ‘Temporary’ means a period of between 7 days and 6 months. Under VAT rules, this is not, in principle, considered the letting of residential accommodation – which is subject to a VAT exemption – but rather a VAT-taxable business activity. The advantage of this is that input VAT, for example on (costly) construction or renovation work, can be deducted.
MIA
MIA is the abbreviation for Environmental Investment Allowance. For environmental investments included on the environmental list, a business owner may deduct a percentage of the expenditure incurred on the investment from their profits. However, investments in residential property are not eligible for MIA.
The party concerned in the case heard by the Gelderland District Court argued that he was not letting out residential properties, but hotel rooms. The rooms could be rented for up to six months, were cleaned daily and the bed linen was changed regularly. MIA can, however, be claimed for environmental investments in hotel rooms.
The Court ruled that the MIA can only be applied if the apartments are made available to guests exclusively as part of a hotel package. The Court cites, amongst other things, a 2019 judgment of the Supreme Court. In that judgment, the Supreme Court ruled that a B&B cannot be classified as a hotel because the buildings, by their nature and layout, are dwellings and are intended to be used as such.