If you let out your own home on a temporary basis, you will pay income tax on 70% of the rent received. This income is in addition to the notional rental value, which continues to apply as normal whilst the property is let. The Amsterdam Court of Appeal has confirmed that this only applies if you let out the entire property on a temporary basis.
Garden shed
This case The case concerns someone who lets out their garden shed to tourists via Airbnb. It has been established in the proceedings that this garden shed is an appurtenance to the (for tax purposes) owner-occupied property. It has also been established that the garden shed has been let on a temporary basis.
In 2015, the garden shed was let to tourists for 21 days. This generated €3,564 in rental income. The tax authorities issue a supplementary income tax assessment for €2,494 (70% of €3,564) in income from work and home.
The Amsterdam Court of Appeal has upheld the ruling of the District Court of North Holland. Both tax courts have concluded, based on the literal wording of the law, that the 70% rule applies only when the entire owner-occupied property is let. In this case, only part of the property is let, namely the garden shed. The additional tax assessment is therefore set aside.
It cannot be ruled out that the Ministry of Finance will lodge an appeal in cassation against this ruling. Given the rapid growth that platforms such as Airbnb have now experienced, this is likely to be a matter of principle. If the Supreme Court also rules against the Ministry of Finance, an amendment to the law would seem likely.
Box 3
The consequence, however, is that the garden shed is no longer considered part of the owner-occupied home for tax purposes. For tax purposes, a property is regarded as the owner-occupied home insofar as it is available as the owner’s main residence on a non-temporary basis.
This means that the value of the garden shed must be declared as an asset in Box 3. However, the portion of the mortgage on your own home attributable to the garden shed must also be treated as a liability in Box 3. In Box 3, the rent actually received is not taxed, but neither is the interest actually paid on the loan deductible. Instead, a flat-rate income is calculated based on the balance of all assets minus all liabilities in Box 3.
Win or row
Depending on the circumstances, the temporary letting of one’s own home or part of it could also be taxed as business profits or income from other activities (row).