Capital Gains on Dutch Real Estate: A Guide to Taxation
Understanding the Dutch Tax System
In the Netherlands, capital gains on real estate are considered business income and are subject to Dutch corporate income tax. This means that corporations and businesses must pay taxes on any profits they make from selling real estate.Tax Brackets for Capital Gains
The Dutch capital gains tax is based on a progressive tax system, meaning that the tax rate increases as the amount of taxable income increases. The tax brackets for capital gains in 2024 are as follows:
- Up to €203,362: 15%
- €203,363-€230,000: 25.8%
- Over €230,000: 31%
Exemption for Primary Residence
There is an exemption from capital gains tax for sales of private residences. If you sell your main residence with a gain, you will not be required to pay capital gains tax on the profit.
Taxation of Dividends
It is important to note that capital gains from selling real estate in the Netherlands are subject to corporate tax before any distributions are made to shareholders. This means that the corporate income tax will be applied to the gain before any dividends can be paid out.
Taxation of Foreigners
Foreigners who sell real estate in the Netherlands are also subject to the capital gains tax system. The tax treatment will depend on the individual's residency status and the tax treaty between the Netherlands and their home country.
Conclusion
Understanding the taxation of capital gains on real estate in the Netherlands is crucial for businesses and individuals involved in real estate transactions. By staying informed about the latest tax regulations and seeking professional advice when necessary, individuals and companies can ensure compliance with Dutch tax laws and optimize their tax liability.
This article was last updated on 19 December 2023 following the Senate's vote on the 2024 Tax Plan.
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