An individual/organization/company can invest in real estate in the Netherlands by means of an asset deal, that is, acquiring the asset directly, or a share deal, that is acquiring the corporate vehicle or SPV which already owns the asset.
Last modified 13 Mar 2025
The following indirect taxes may apply where the real estate is acquired directly (an asset deal):
In addition, charges (kadastrale rechten) can be levied by the Land Registry.
RETT can be payable in relation to both asset deals and share deals. Real estate share deals are situations where the company being acquired qualifies as a 'real estate company' namely if at least 50% of its assets consist of real estate (either in the Netherlands or abroad) and that real estate is mainly (70% or more) instrumental in the trading of and/or development of real estate, and 30% of those assets are located in the Netherlands.
RETT is legally due by the buyer. An exemption from RETT may apply newly built real estate or building land is purchased and VAT is payable.
As per 1 January 2023, the rate of the RETT is 10.4% (in 2022: 8%), unless residential property is involved. For residential property (houses, apartments, etc.) the transfer tax is at a rate of 2% (or 0% in the case that certain conditions are met) in order to encourage the buying of houses by individuals.
Last modified 13 Mar 2025
If newly built real estate (not taken into use for a period longer than two years) or building land is purchased, 21% VAT applies by law.
If the buyer intends to use 90% or more of the property for activities to which VAT applies, the parties are entitled to opt for a transfer which is subject to VAT.
VAT can usually be offset against VAT received or reclaimed from the Dutch tax authorities if the real estate is used for VAT taxable activities.
Last modified 13 Mar 2025
Notary's fees will be incurred but can usually be negotiated. Other costs include the fees of professional advisors.
Last modified 13 Mar 2025
Municipalities levy property tax on the basis of the value for the purposes of the Value of Immovable Properties Act. The exact rate differs per municipality and on the type of real estate.
Please refer to the Taxation of income question.
Until 2025, Dutch Personal Income Tax (PIT) is payable on the basis of a deemed return on Dutch real estate held as passive investment (so called Box-III income). This deemed return is calculated on the actual value of the real estate owned (minus any debt in respect of such real estate) on 1 January of each calendar year. The percentage of the deemed return is 6.17% for the (2023 figures) and 6.,04% for the 2024 figures. Actual income (such as rental income), actual capital gains and actual expenses with respect to the Dutch real estate are disregarded for the purposes of calculating Box-III income. As per 1 January 2026, a new Box-III system is expected to be introduced in which the actual return on Dutch real estate held as a passive investment will be taxed.
The Box-III income is taxed at a fixed rate of 36%. A general threshold exemption of €57.000 (2024 figures) applies for each taxpayer.
Last modified 13 Mar 2025
In the case that the owner of residential real estate is part of an Owner’s Association (VVE), a regular contribution for the management and maintenance of the building will have to be paid.
Last modified 13 Mar 2025
Investors can expect to receive rental income or gains related to the disposal of real estate.
Last modified 13 Mar 2025
The ownership of real estate by a foreign corporate investor is deemed to constitute a permanent establishment in the Netherlands. Dutch Corporate Income Tax (CIT) is payable on net income after the deduction of expenses. Any net income attributable to the deemed permanent establishment is subject to corporate income tax at the following rates:
|
Year |
Tax rate applicable to first bracket taxable profits |
Tax rate applicable to profits in second bracket taxable profits |
|
2024 |
19% (up to €200,000) |
25.8% |
Non-resident investors can generally deduct expenses attributable to the activities of their permanent establishment in the Netherlands. However, please note the following limitations.
Interest expenses are only deductible within the limits of the Dutch implementation of the European Anti-Tax Avoidance Directive's interest deductibility rule. As a result, net interest expense is deductible up to the highest of 20% of the Company's EBITDA or €1 million. Typically for intragroup loans, other interest non-deductibility rules may apply as well.
The Netherlands levies a conditional withholding tax on interest paid by a (deemed) permanent establishment to related entities that are residents for tax purposes in a so-called low tax jurisdiction, are on the EU blacklist or in certain abusive and hybrid situations. The rate of the conditional withholding tax is linked to the highest corporate income tax rate, i.e. 25.8% in 2024.
Real estate transfer tax is non-deductible for CIT purposes but is capitalized on the tax book value of the Dutch real estate asset (in case of an asset deal). Dutch real estate may be depreciated for tax purposes, generally based on a linear method taking into account a residual value and a depreciation method based on the useful life, until a certain floor value (bodemwaarde) for tax purposes is reached. Such floor value is set at 100% of the value for the purposes of the Value of Immovable Property Act the so-called 'WOZ-value').
For foreign individuals acting as a passive investor in Dutch real estate, reference is made to Ongoing taxation above.
General rules on taxation for Dutch corporate entity.
The Dutch company's worldwide profits (including the profits realized on the Dutch real estate held) are subject to Dutch corporate income tax at:
Dutch corporate entities can deduct expenses relating to the real estate held by such entity. However, please note the following limitations.
Interest expenses are only deductible within the limits of the Dutch implementation of the European Anti-Tax Avoidance Directive's interest deductibility rule. As a result, net interest expense is deductible up to the highest of 20% of the Company's EBITDA or €1 million). There is an intention to abolish or limit the €1 million for companies leasing real estate to third parties as of 2025 (i.e. interest is only deductible up to 20% of the company's EBITDA). This is, however, not legislation yet. Typically for intragroup loans, other interest non-deductibility rules may apply as well.
The Netherlands levies a conditional withholding tax on interest and dividend paid to related entities that are residents for tax purposes in a so-called low tax jurisdiction, are on the EU blacklist or in certain abusive and hybrid situations. The rate of the conditional withholding tax is linked to the highest corporate income tax rate, i.e. 25.8% in 2024.
Real estate transfer tax is non-deductible for CIT purposes. Dutch real estate may be depreciated for tax purposes, generally based on a linear method taking into account a residual value and a depreciation method based on the useful life, until a certain floor value (bodemwaarde) for tax purposes is reached. Such floor value is set at 100% of the value for the purposes of the Value of Immovable Property Act for passive investors (the so-called 'WOZ-value').
Taxpayers can opt to make use of the fiscal investment institution (FII) regime (fiscale beleggingsinstelling) for direct and indirect investments in (Dutch) real estate (as of 2025 only indirect investments), when, inter alia, a number of shareholder, distribution and financing requirements are met. FIIs are subject to CIT at a rate of 0%.
In the case of a tax-transparent partnership (such as for example partnerships that are comparable to the commonly used closed mutual fund (fonds voor gemene rekening) or closed limited partnership (commanditaire vennootschap), the (foreign) partners or participants are taxed in the Netherlands on their share of the participation as if they were directly investing in the real estate (refer to the tax treatment under 'direct investment from abroad'). Tax transparent partnerships are not taxed as corporate entities.
Last modified 13 Mar 2025
Dutch dividend withholding tax
If the shareholding in a Dutch resident company is held by a non-tax-resident entity or individual, generally a dividend withholding tax, levied at a rate of 15% must be withheld when the dividend distribution is made. Dutch cooperatives are only subject to Dutch dividend withholding tax if they are a so-called 'holding or financing' cooperative (houdstercoöperatie). If a company is, in principle, obliged to withhold Dutch dividend withholding tax, the domestic withholding exemption may apply if:
In such cases, there should be no withholding tax by virtue of the domestic withholding exemption.
Dutch dividend withholding tax is principle levied at a rate of 15%, unless a relevant tax treaty reduces such withholding tax to a lower level. Under Dutch tax treaties, withholding tax may be reduced to anywhere between 0% and 15% depending – amongst others – on the shareholder's degree of participation in the company.
Please note that the Multilateral Instrument (MLI) has come into effect (for the Netherlands) per 1 January 2020. This MLI introduces the so-called principle purpose test (PPT) in all tax treaties covered by the MLI, which may allow the Netherlands to deny tax treaty benefits (e.g. reduction of withholding tax rates) if the structure is – in short – considered to be artificial and inside the scope of the PPT. The anti-abuse rule in respect of the Dutch domestic dividend withholding exemption is modelled in line with the PPT, therefore the Dutch tax authorities generally take the position that if the domestic anti-abuse rule applies, tax treaty benefits will also be denied in situations involving tax treaties covered by the MLI.
Possible tax credit
If dividend withholding tax is due for a dividend distribution to a non-resident shareholder, this may create a tax credit in the shareholder's country of residence, depending on the applicable tax treaty and/or the applicable domestic legislation in the state of residence of the investor.
Taxation at the level of a corporate shareholder
If a Dutch tax-resident shareholder (entity) receives dividends, these are subject to taxation at the level of the shareholder. This may be free of corporate income tax, if the so-called participation exemption applies – that generally is where a corporate shareholder owns 5% or more of the nominal paid-up share capital of a company that is not considered a portfolio investment company. In this context, real estate is not considered a passive investment.
A foreign shareholder (entity) of a Dutch company may be subject to Dutch non-resident taxation if the Dutch company is interposed to avoid Dutch personal income tax at the shareholder level (e.g. the person holding the shares in the foreign company, be it directly or indirectly). A tax treaty may mitigate the tax the Netherlands may impose. However, it is possible that under the principle purpose test of the MLI, tax treaty benefits may be denied.
In the case of investment through a tax transparent partnership (under Dutch domestic law), the partners are taxed directly according to their individual circumstances. The income is distributed to the partners and no additional taxation is levied on the partnership.
Last modified 13 Mar 2025
No.
Last modified 13 Mar 2025
No.
Last modified 13 Mar 2025
Capital gains made by a foreign entity on the sale of real estate are subject to corporate income tax. Capital gains made by individuals, who qualify as business operators, are subject to personal income tax at tiered rates of up to 49.50% (2024 rates).
Capital gains are generally calculated upon the difference between the tax book value of the property at the date of sale and the agreed purchase price. Under specific circumstances, it is possible to re-invest the profit into a re-investment reserve (herinvesteringreserve), in which case the capital gains are not taxed. A qualifying replacement investment must be made within three years.
In the case of individuals who qualify as portfolio investors, no specific Dutch capital gains tax applies as they likely fall under the scope of a specific net wealth type of income tax (so-called Box-3 income).
In the case of a resident corporate shareholder, the participation exemption generally applies if the shareholder owns at least 5% of the company's nominal paid-up share capital.
For foreign corporate shareholders, capital gains tax does generally not apply where the shareholder is resident in a country that has concluded a double taxation treaty with the Netherlands, or where the shares are trading assets of a corporate shareholder (rather than investments). However, there are certain situations where in the case of investments in real estate companies, the Netherlands may be allowed to tax the capital gains. This is the case if the double taxation treaty contains an article allowing the source state (the Netherlands) to tax capital gains related to the disposal of shares in a real estate company and the foreign shareholder is subject to Dutch non-resident taxation Please note that the introduction of the MLI and the PPT may result in a denial of treaty benefits.
Last modified 13 Mar 2025
Notary's fees will be incurred but can usually be negotiated. Other costs include the fees of professional advisors.
Last modified 13 Mar 2025
How can investment in real estate by an individual/organization/company be set up?
An individual/organization/company can invest in real estate in the Netherlands by means of an asset deal, that is, acquiring the asset directly, or a share deal, that is acquiring the corporate vehicle or SPV which already owns the asset.
Last modified 13 Mar 2025