Owner-Occupied Home Tax: Who Qualifies and What You Get
Understand how the Owner-Occupied Home Tax affects your taxable income in the Netherlands and how property values impact your costs.
This tax is a calculation added to your taxable income based on the value of the home you live in. It functions as a way to account for the benefit of living in your own property.
Who it's for
This scheme applies to all homeowners. If you own a home that you occupy as your primary residence, you are subject to this tax calculation.
What you get
This is not a cash payment or a subsidy provided to you. Instead, it is a "notional rental income" (known locally as a bijtelling) that is added to your total taxable income. The concept is that by living in your own home rather than renting, you are gaining a financial benefit equivalent to the rent you would otherwise have to pay. This theoretical income is then used to determine your overall tax liability for the year.
What it costs you
The cost is not a fixed fee but is calculated based on the WOZ-waarde of your property. The WOZ-waarde is the official assessed value of your home. Because the tax is tied to this value, the amount added to your taxable income will change if the official assessed value of your property increases or decreases.
The catch to know
There is a significant change for homeowners who have reached the end of their mortgage term. If your mortgage is fully paid off, you should be aware that the 'Wet Hillen' deduction is currently being phased out. This means that the previous tax relief available to those without mortgage debt is gradually disappearing, which may change how much tax you owe each year.
How to apply
- Check your property's official WOZ-waarde to understand the basis of the calculation.
- Review your annual tax documentation to see how the notional rental income has been added to your income.
- Monitor updates regarding the phase-out of the 'Wet Hillen' deduction if you have no mortgage.
- Visit the official portal for more information.