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If you let out your own home, do you have to pay income tax on the rental income?<\/p>\n
In our article<\/a> On 3 July 2018, we noted that, according to the District Court of North Holland, the letting of a garden shed did not constitute the letting of the entire property and that, consequently, it was not subject to tax. But what does the Supreme Court make of this?<\/p>\n Section 3.113 of the Income Tax Act 2001 concerns the temporary letting scheme. Under this scheme, where a person\u2019s own home is let on a temporary basis, 70% of the rental income is taxed in Box 1.<\/p>\n The Act states literally \u201cthe owner\u2019s own home that has been made available on a temporary basis\u201d. In case law, there is debate as to whether this refers solely to the owner\u2019s entire home or whether the provision also applies to the letting of part of the owner\u2019s home.<\/p>\n For the purposes of income tax, a home is a property that:<\/p>\n
\nThe Amsterdam Court of Appeal subsequently upheld the ruling of the District Court of North Holland (read more about this in our article Rent from a garden shed is taxed under Box 3<\/a>).<\/p>\nThe temporary rental scheme<\/strong><\/h4>\n