Check the regulations with your municipality
You can usually start a business from home if you practice a regulated profession. Examples of regulated professions are: architect, attorney, general practitioner, artist, or accountant. The regulations for starting a business from home differ per municipality. But in general, the rules are:
- Your house must remain a home. In most municipalities, this means that:
- You can use no more than 1/3 of your house for your business
- Your business must not cause your neighbours any inconvenience
- You cannot advertise on the building
- Your business is an office
- Most municipalities do not allow you to let employees work from your home
- Your plans must fit with the local zoning plan:
- If they do, you usually need to report your business from home to the municipal authority.
- If they do not fit, you can apply to your municipality for a conversion permit (onttrekkingsvergunning). By issuing the conversion permit, the municipal authority grants you permission to remove the house from the residential housing stock and use it as a business space. Another option is to apply for an All-in-one Permit for Physical Aspects (omgevingsvergunning). You can also ask the municipality to change the zoning plan.
Address shielded in Dutch Business Register
As of 1 January 2022, the Netherlands Chamber of Commerce, KVK shields the residential address in the Dutch Business Register from owners of sole proprietorships, partners of general partnerships, limited partnerships, professional partnerships, and directors of owner associations. The shielded residential addresses can only be viewed by government organisations such as the Tax Administration, or professional groups that are authorised to do so, such as lawyers and bailiffs. But if your company is located at your home address, this address will remain visible, as the business address is public. Read more about the shielding of addresses.
Building extra room
If you own the property and you have the space, you could build an extra room to your house to use it for your business. Check if the zoning plan of your municipality permits it. For example, you may be allowed to build an extension to your home, but only for private use. Or only build on a maximum number of square metres of the land. The additional room you create can increase the value of your home. Keep in mind that an increased WOZ value affects the property tax (OZB) and the income tax. You benefit from this increased value when you sell the house. You must notify the Tax Administration whether the new construction is private or belongs to your company. If you use more than 90% of the space for work purposes, you are required to declare this as a business asset. Before you start building extra room, check with your municipality if you need a building permit.
Do not bother the neighbours
In most municipalities, one of the conditions for a business from home is that your business must not cause your neighbours any inconvenience. For example, should your business involve receiving and the picking up of packages, it will probably cause a lot of extra traffic on a daily basis. Couriers bringing deliveries and customers coming to collect their package. If that is the case, you business might not be suited for a residential area.
Taxes for home businesses
For VAT purposes, your home business can use the same input tax deductions as any other small business. The same conditions apply. For income tax purposes, there are a number of extra regulations to follow.
Your workspace and income tax
You can make use of the same deductions and fiscal regulations for income taxes as any other small business. The layout of your workspace will affect your tax return. Take the following factors into considerations:
- Is your business space separate from your living space? Does it have a separate entrance and separate toilet facilities? And could you let it to a third party? If this is the case, you may be able to deduct some of the costs of the business part of your home.
- Are you starting your business in a building that you own? Then state on the first income tax return whether it concerns a private property or a business property.
- Do you live in a house that is part of your business assets? Then you must add an amount to the profit for the private use: the rental value (woningforfait).
- If you use the house for business purposes only and you own it, you will have to add the value of the house to your company assets. On the other hand, you can deduct several costs (energy, cleaning, decorating, etc.) from your company earnings.
- Do you rent a property for your company and do you live there? In that case, you must add an amount to the profit as a private withdrawal (the 'living pleasure'). That amount is a percentage of the WOZ value.
See business premises: privately owned or company assets (in Dutch) for more information.
Work from your garage
Some large companies started off in a garage. This may inspire you to do the same.
Your garage is considered part of your house, so the conditions mentioned above apply. But as a garage is separate from your living space, chances are you can deduct some taxes. For this reason you may consider using your garage for business purposes, rather than the spare bedroom
Do you own or rent the house?
Do you own the house and have you taken out a mortgage to finance it? Then you need to take into account the provisions of the mortgage contract. If you are renting the property, you should take into account the provisions of the tenancy agreement.
You need to take out separate business insurance policies for business assets and workspaces. Your household insurance and home insurance are for your private belongings and the building itself. They do not cover damage to business assets and workspaces. If something happens to your home, you may need to rent temporary workspace. That comes with additional costs involved. Consider an inventory insurance and business interruption insurance. Many insurers allow you to combine various casualty insurance policies, insuring you for multiple damages at once. In that case you often pay less premium. Check with your insurance company which insurances you need and if it comes at a lower premium.
Save on phone, internet and energy costs
When you use your phone and internet for business purposes, it will save costs if you choose one provider. Most providers have favourable rates or package deals for business use. Also, energy suppliers often have low-cost business rates.
Who can help you with what?
Your municipality can help you:
- checking the exact conditions for a home business;
- checking the zoning plan;
- they can tell you if you need a building permit, or;
- if you need to report your business from home;
- they can help you apply for an environmental permit, a change to the zoning plan or an abstraction permit;
Are you not sure whether the workspace is sufficiently separate from your living space? Ask your tax service provider (accountant or advisor). You can also check with the Tax Administration (Belastingdienst).
Number of self-employed professionals with a home business
The graph shows the number of self-employed professionals with a home business. This includes working inside, from and nearby home.