At the end of the year, we often receive questions about which expenses can still be deducted to reduce annual profits. I recently posted about this topic, so I will not repeat it here.
Another frequently asked question is whether the costs of an owned or rented home or house are deductible. I have created a list on this topic and structured it clearly for you with the help of online information.
Below, we summarize when and how a self-employed entrepreneur in the Netherlands can deduct housing-related costs as business expenses.
1. Workspace in an owner-occupied home
A. Non-independent workspace
(most common situation)
Characteristics
- No separate entrance
- No private sanitary facilities (toilet) or kitchen
- The workspace is part of the home
Consequence
Housing-related costs are not deductible
(mortgage interest, rental value, utilities, property tax, etc.)
Deductible instead
- Furniture required for work
(desk, chair, cabinet) - Equipment
(laptop, printer) - The business-related portion of costs such as
- internet
- telephone
There is no fixed percentage; a reasonable allocation must be applied.
B. Independent workspace
Characteristics
- Separate entrance
- Private sanitary facilities (toilet)
- Lockable and clearly separated
Additional condition
Entrepreneurial income:
- at least 70% is generated in or from this workspace, or
- at least 30%, and at least 70% of total working time is spent here
Consequence
Housing-related costs are deductible on a proportional basis:
- mortgage interest
- rent
- utilities
- maintenance
- property tax and insurance
The allocation is usually based on square meters.
Important
For owner-occupied homes, this may affect the tax treatment of the private residence.
Upon sale, tax liabilities may arise (capital gains tax).
2. Workspace in a rented home
A. Non-independent workspace
- Rent and utilities are not deductible
Deductible
- Furniture
- Business equipment
- Business portion of internet and telephone
B. Independent workspace
- Rent and utilities are partially deductible
- Allocation based on square meters or usage
3. Property or space used entirely for business purposes
For example
- office
- practice
- workshop
Consequence
- Costs are 100% deductible
- In the case of ownership, depreciation can be applied
VAT
- Generally deductible
- A correction may be required if the property is later used privately
4. VAT – brief overview
- Non-independent home workspace: VAT not deductible
- Independent workspace: VAT partially deductible
- Fully business property: VAT deductible
5. Practical tips
- Always keep written documentation (m², usage, photos)
- Private and business use must be clearly separated
- In the case of an owner-occupied home, the disadvantages often outweigh the benefits