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In the Netherlands, you pay property transfer tax (overdrachtsbelasting) when you become the owner of:
- immovable property, such as business premises, a plot or a residential building;
- rights to immovable property, such as building and planting rights or a leasehold;
The property transfer tax is 2% for homes and other immovable properties (such as a shed or garden) on a residential premises and 6% for all other immovable properties (such as a business premises or building plot). If you become the owner of shares in a public limited company (NV), private limited company (BV) or partnership, whose possessions mainly consist of immovable property, you also have to pay property transfer tax.
The property transfer tax is not tax deductable as business costs. You must add up the tax to the property's balance sheet value, which forms the asset's depreciable basis. Please note: depreciation does not apply to land.
How to pay property transfer tax?
Normally, a civil-law notary draws up a deed to transfer a (business) property. They then charge the property transfer tax owed, file the property tax return on your behalf and pay the tax to the Dutch Tax and Customs Administration (Belastingdienst). However, other rules apply when a notary deed hasn't been drawn up.
In some situations exemption from property transfer tax is possible, for instance when you transfer your business to a relative or when you transfer immovable property into a private limited company.
Property transfer tax and VAT
When buying immovable property that is charged with VAT, a property transfer tax exemption may apply. Please be advised by the Dutch Tax and Customs Administration on the exact conditions or check the (Dutch-language) online tool for situations in which there is concurrence of VAT and property transfer tax.
Prinsjesdag (Budget Day) 2019 announcement
On Prinsjesdag (Budget Day) 2019, the Ministry of Finance announced that the property transfer tax for non-residential properties will go up from 6 to 7%. Non-residential properties are, for instance, business premises, hotels, or a residential building plot.
The measure is expected to come into force from 1 January 2021. This is subject to its acceptance by the upper and lower houses of parliament.