Property

Restriction on amortisation of buildings in income tax

Entrepreneurs, recipients of income from other activities and legal persons may amortise buildings only up to a certain value, the so-called minimum value. The level of the minimum value is currently different for both income tax and corporation tax and also depends on the way the building is occupied (own occupancy or for investment). At present, income taxation has a wider option for amortising buildings for own occupancy than in corporation taxation. The government wants to eliminate this distinction by determining the minimum value for all buildings in accordance with the WOZ value (value for purposes of the Valuation of Immovable Property Act).

• Take note! This significantly limits the options for amortising buildings for own occupancy and, if relevant, application of the reinvestment reserve.

Concurrence exemption on share transactions

In practice, immovable property is regularly transferred through a share transaction to preclude VAT or transfer tax. The government proposes to amend what is known as the concurrence exemption in transfer tax as of 1 January 2025 so that at least 4% transfer tax is levied when:

• it concerns new immovable property for VAT;
• it is exploited for less than 90% subject to VAT; or
• this occurs within two years of the date of acquisition.

This is achieved by excluding the application of concurrence exemption in those cases.

Joint purchase of owner-occupied dwelling

If partners decide to buy their first jointly owner-occupied dwelling and then to sell the dwelling of one of the two partners, under current legislation this may lead to a limitation of the deduction of mortgage interest. It is proposed to amend the law retroactively to 1 January 2022 to avoid this undesirable interest deduction restriction.

• Tip! It is possible that this situation has already occurred in the 2022 income tax return. In that case, lodge an objection or request an ex officio reduction and make reference to the 2024 Tax Plan.

Abolition of the gift tax exemption for a beneficiary’s own home

In 2024 the gift tax exemption for a beneficiary’s own home will be abolished completely.

• Tip! It is possible to still use the gift tax exemption for a beneficiary’s own home up to an amount of € 28,947 in 2023.

Increase in the housing value

Increase in the housing value to € 510,000 for which (under certain conditions) the low transfer tax rate applies.

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