BDO Indirect Tax News

Amendments to the Netherlands’ VAT real estate decree that took effect on 18 December 2025 are driven primarily by EU case law and upcoming changes to the VAT rules governing short-term accommodation. The decree reflects the interpretation of the State Secretary of Finance and tax inspectors are generally required to adhere to this interpretation; taxpayers may adopt different views but they must be substantiated.

Key Changes

• Undeveloped land: The definition of undeveloped land has been broadened to include the situation where a partially demolished building is on the land even when the building no longer functions as such (e.g., when foundations are present on the land). Based on these changes, land will be classified as undeveloped more frequently and each case will need to be assessed on its own merits to determine whether a building or undeveloped land is involved. Undeveloped land can be considered a building site for VAT purposes, in which case its supply is taxable. The supply of an old building is exempt from VAT.
• First use: The previous decree stated that “first use” occurs when the use aligns with the objective purpose of a building. The example given was when a tenant prepares the space for its intended use, i.e., tenant “fit-out work.”  This example has been removed from the decree, so the application of this change will need to be assessed on a case-by-case basis.
• Newly created immovable property: The amended decree specifies that a renovation can be so extensive that it effectively creates a new building, a supply that is subject to VAT. The Dutch Supreme Court has indicated that only changes to the structural elements of a property, including replacement (of part) of the existing structure, can result in what is essentially a new building. Case law on this issue has queried whether this test is too strict, but the State Secretary has confirmed in the amended decree that the Supreme Court’s interpretation will be followed by the tax authorities.
• Short-stay accommodation: As from January 1, 2026, the reduced 9% VAT rate for renting accommodation in a hotel, guesthouse, camp, holiday homes (even potentially when rented via an intermediary), etc. for short stays (i.e., less than six months) is eliminated. Instead, these services attract VAT at the standard rate of 21%. The amended decree also affects rentals used to temporarily house asylum seekers and refugees. Such rentals by operators of hotels, guesthouses, camps and holiday businesses to organisations such as COA (the Dutch Central Organisation for Asylum Accommodation) are an exception to VAT-exempt rentals and are taxed at the 21% VAT. Although asylum seekers and refugees sometimes stay longer than a short period, this is still considered short-stay because the goal is for such individuals to stay for as short a period possible.

Silverster Klaus
BDO in Netherlands