Why Dutch real estate remains taxable after moving abroad
Your former Dutch home: Box 1 or Box 3?
Rental properties in the Netherlands: Box 3 taxation
International Tax Treaties: Who Has the Right to Tax Dutch Real Estate?
Dutch Tax Returns and Practical Considerations
Owning real estate in the Netherlands while living abroad has Dutch tax implications. Whether you own a rental property, a holiday home or a former main residence that you have retained after emigrating, the Netherlands will continue to tax your property even though you are no longer a Dutch tax resident.
The Dutch tax treatment depends on several factors, including how the property is used, whether it is financed with a mortgage and whether it is owned privately or through a company.
In this article, the main Dutch tax consequences of owning Dutch real estate as a non-resident are explained, focusing on the rules applicable in 2026.
Why Dutch Real Estate Remains Taxable After Moving Abroad
Under Dutch tax law, individuals who live in the Netherlands are generally subject to income tax on their worldwide income and assets. Individuals living outside the Netherlands, however, are subject to Dutch income tax only on certain income and assets with a Dutch source. They are non-resident taxpayers.
Real estate located in the Netherlands is one of these taxable assets.
This means that if you live abroad but own a property in the Netherlands, you may still be required to file a Dutch income tax return (a C form) and pay Dutch income tax in respect of that property.
The tax treatment depends primarily on the classification of the property:
- Box 1: A former main residence may, under certain conditions, continue to qualify for the Dutch owner-occupied home regime after emigration.
- Box 3: Rental properties, holiday homes and other privately held investment properties generally fall within the Dutch savings and investments tax regime.
- Property held through a company: Different rules may apply if the property is owned through a Dutch or foreign company.
Your former Dutch home: Box 1 or Box 3?
If you move abroad but decide to keep your former home in the Netherlands, an important question is whether the property will continue to qualify as an owner-occupied home (Box 1) or become an investment property (Box 3).
The distinction can have significant tax consequences, particularly if the property is financed with a mortgage, because the mortgage interest is deductible in Box 1, while the "notional rental value" (eigenwoningforfait), based on the home’s WOZ value, should be reported as income.
Keeping your former home vacant
Under certain conditions, a Dutch home may continue to qualify for the owner-occupied home regime in Box 1 after its owner has moved abroad.
This may be the case where the owner temporarily resides abroad, for example because of an international assignment, and intends to return to the Dutch property as their main residence.
The main conditions include:
(1)The property must have qualified as the owner's main residence for at least one year before the temporary move.
(2) The property must generally remain vacant and must not be made available to third parties.
(3)The owner must intend to return to the property as their main residence.
Neither the owner nor their tax partner may have another owner-occupied home serving as their main residence during the temporary stay abroad.
If these conditions are met, the property may remain in Box 1 under the temporary assignment rules (uitzendregeling).
Please note that certain exceptions apply to the requirement under (2) above. For example, children, a tax partner or qualifying members of the household may continue to occupy the property without jeopardizing the application of the temporary assignment rules, provided that the statutory and administrative conditions are met. No rent or other compensation may be charged.
Also, a higher notional rental value (eigenwoningforfait) applies under these rules than for a regular owner-occupied home. For 2026, the notional rental value is calculated at 0.55% instead of the regular 0.35% for most homes to which the temporary assignment rules apply.
Importantly, simply keeping a property vacant is not sufficient. If the move abroad is permanent and there is no genuine intention to return to the property as a main residence, the temporary assignment rules will generally not apply.
A separate transitional regime may apply if the former home is vacant and genuinely offered for sale. Under this regime, the property may remain in Box 1 for up to three years after the calendar year in which the owner moved out.
Renting out your former home
If you decide to rent out your former Dutch home after moving abroad, the tax treatment generally changes.
The property will normally cease to qualify as an owner-occupied home and move from Box 1 to Box 3.
This has two important consequences:
- Mortgage interest can no longer be deducted under the Box 1 owner-occupied home rules.
- The property and the debt attributable to it become relevant for the Box 3 tax calculation.
Under the current Box 3 system, Dutch residential investment property is generally valued by reference to its WOZ value. Where a property is rented out under qualifying rent-protection arrangements, a valuation adjustment may apply.
The tax consequences are therefore not determined solely by the rental income received. The property's value, financing and the applicable Box 3 calculation method are also important.
The taxation of Dutch rental properties is discussed in more detail in the next section.
Why the distinction matters
Consider someone who moves abroad and retains an apartment in Amsterdam.
If the apartment remains available for their return following a genuinely temporary stay abroad, it may continue to qualify for Box 1 treatment.
If, however, the owner relocates permanently and keeps the apartment for occasional private use or decides to rent it out, the property will generally fall within Box 3.
The tax consequences can differ considerably, especially where a substantial mortgage is outstanding.
Practical consideration
Before emigrating, it is advisable to assess the intended use of your Dutch property. Whether you plan to return, rent out the property, sell it or retain it as a second home may determine its tax treatment for years to come.
When Your Former Partner Remains in the Dutch Home
A particularly complex situation arises when a relationship ends and one partner moves abroad while the other remains in the jointly owned Dutch home. This may involve married couples as well as unmarried partners.
Under the Dutch income tax rules for former partners (Article 3.111(4) of the Dutch Income Tax Act 2001), the departing partner's ownership share may continue to qualify as an owner-occupied home in Box 1 for up to two years after leaving the property, provided that the property remains the former partner's main residence.
The tax consequences depend on the ownership structure, the mortgage arrangements, the parties' tax status and any financial agreements between them.
After the two-year period, the departing partner's share will generally no longer qualify as an owner-occupied home and may become subject to Box 3 taxation.
Practical recommendation
If you move abroad following a separation while your former partner remains in the Dutch property, specialist Dutch tax advice is strongly recommended before making arrangements concerning ownership, mortgage payments or the financial settlement. These arrangements can have significant consequences for mortgage interest deductions, income tax and the eventual transfer of the property.
Rental Properties in the Netherlands: Box 3 Taxation
If you live abroad and own a rental property, holiday home or other privately held investment property in the Netherlands, the property will generally be subject to Dutch income tax in Box 3.
As a non-resident taxpayer, you are not taxed on your worldwide investment portfolio in the Netherlands. Your Dutch Box 3 tax liability is generally limited to Dutch real estate, certain rights relating to Dutch real estate and the debts attributable to these assets.
How does Box 3 taxation work in 2026?
Under the current Box 3 system, tax is calculated primarily on the basis of deemed returns (forfaitair rendement), rather than the actual rental income or capital gains realised.
For 2026, the deemed annual return on investment properties is 6.00%. This includes rental properties and second homes, regardless of whether they are actually rented out.
The deemed return is subject to Dutch income tax at a rate of 36%.
Non-resident taxpayers are also entitled to the Box 3 tax-free allowance (heffingsvrij vermogen), which amounts to €59,357 per person in 2026.
This means that the effective tax burden depends on the value of the Dutch property, any qualifying debts and the available tax-free allowance.
Importantly, the deemed return does not necessarily reflect the actual income generated by the property. A property producing relatively little rental income may still give rise to a substantial Dutch tax liability.
How is the property valued?
For Dutch residential properties, the starting point for Box 3 taxation is generally the official municipal property valuation, known as the WOZ value.
For the 2026 income tax return, the relevant WOZ value is the value determined as at 1 January 2025.
If the property is rented out under qualifying rent-protection arrangements, the value taken into account for Box 3 purposes may be reduced through the leegwaarderatio, a statutory valuation adjustment for certain rented residential properties.
Whether this adjustment applies depends on the nature of the rental agreement and the circumstances of the property.
What happens to the mortgage?
If your Dutch investment property is financed with a mortgage, the debt attributable to the property may be taken into account when calculating your Dutch Box 3 tax liability.
However, a mortgage does not simply reduce the property's deemed return by the actual interest paid.
Under the deemed-return system, the taxable return is calculated by applying separate deemed rates of return to the property's value and the qualifying mortgage debt. The deemed return on the debt is deducted from the deemed return on the property.
For 2026, the deemed return on real estate is 6.00%, while the provisional deemed rate for qualifying debts is 2.70%. The resulting net deemed return forms the basis for the Box 3 tax calculation, taking into account the applicable tax-free allowance.
Unlike Dutch resident taxpayers, non-resident taxpayers are not subject to the general Box 3 debt threshold, provided that the debts are attributable to taxable Dutch assets.
As demonstrated above, the amount of outstanding debt can have a significant impact on the Box 3 calculation. As such, the tax treatment differs from the mortgage interest deduction available for an owner-occupied home in Box 1.
Can you be taxed on your actual return instead?
Following several judgments of the Dutch Supreme Court, taxpayers may rely on their actual investment return if this is lower than the deemed return calculated under the statutory Box 3 system.
This alternative is known as the actual return or werkelijk rendement approach.
For Dutch investment property, the actual return generally includes:
- Rental income received during the year.
- Changes in the property's value, including unrealised increases or decreases.
- A deemed benefit for private use of the property, where applicable.
- Deductible interest paid on qualifying Box 3 debts.
Ordinary expenses, such as maintenance costs, are generally not deductible when calculating the actual return. Special rules apply to certain capital improvements.
An important difference is that the Box 3 tax-free allowance does not apply when calculating the actual return.
For properties that are rented out, the actual return can therefore be higher than expected, particularly where both rental income and an increase in property value must be taken into account.
For a holiday home that is available for private use, an additional benefit for personal use must also be considered from 2026.
Whether the actual-return approach is more favourable requires a calculation based on the specific circumstances.
What if you buy or sell the property during the year?
Under the deemed-return system, Box 3 generally uses 1 January as its valuation date.
If a non-resident purchases a Dutch investment property after 1 January, the acquisition will generally not increase the deemed Box 3 return for that calendar year.
Different rules may apply when an individual emigrates from the Netherlands during the year. In that situation, the transition from resident to non-resident taxation can require a time-apportioned calculation.
Under the actual-return approach, acquisitions, disposals and changes in property value during the year may also affect the calculation.
Practical consideration
For non-resident owners of Dutch investment property, the annual tax burden depends on more than rental income alone. Property valuation, financing, the availability of the leegwaarderatio and the choice between deemed and actual returns can all have a material impact.
A property investment that appears profitable before tax may produce a considerably lower return after Dutch Box 3 taxation. It is therefore advisable to assess the Dutch tax implications before purchasing, refinancing or selling Dutch real estate.
Future of Box 3 Taxation: 2027 and Beyond
The Dutch Box 3 system is undergoing significant reform, with potentially important consequences for non-resident owners of Dutch real estate.
Proposed changes for 2027
The current deemed-return system is expected to remain in place in 2027. On 29 September 2026, the Dutch government proposed increasing the deemed return on investments and other assets, including real estate, from 6.37% to 7.87%, while reducing the tax-free capital allowance to €30,846 per taxpayer.
However, following objections in Parliament, the government has indicated that alternative financing measures will be considered. The proposed increases and reductions are therefore not final.
A new system from 2028
As you may have noticed, the future of the Dutch Box 3 system is the subject of intense debate. As things stand, the government intends to introduce a new Box 3 system based on actual returns from 1 January 2028.
Under the proposed legislation, real estate would generally be subject to a capital gains tax system. Rental income would be taxed annually, while changes in property value would generally be taxed when the property is sold, rather than on an annual basis.
This would represent a fundamental change from the current deemed-return system and could significantly affect the taxation of Dutch investment properties held by non-residents.
Further developments are expected in November 2026 as the legislative process continues. However, the proposed legislation remains subject to parliamentary approval and may still be amended or postponed.
Practical consideration
For non-resident property investors, decisions concerning the acquisition, financing, rental or sale of Dutch real estate should take account of both the current tax rules and potential future changes. A long-term investment strategy based solely on the 2026 tax treatment may produce significantly different results under the proposed legislation.
International Tax Treaties: Who Has the Right to Tax Dutch Real Estate?
If you live abroad and own real estate in the Netherlands, you may face taxation in two countries: the Netherlands, where the property is located, and your country of residence.
Under international tax treaty principles, the country in which real estate is located has the right to tax income derived from that property. This principle is reflected in Article 6 of the OECD Model Tax Convention and is consistently followed in the Netherlands' tax treaties.
Consequently, the Netherlands retains the right to tax Dutch real estate, even when the owner resides abroad.
However, your country of residence may also include the property or income derived from it in its tax base. Tax treaties generally provide mechanisms to prevent double taxation, although the method and extent of relief depend on the applicable treaty and domestic tax legislation.
What if no tax treaty protection is available?
Not every situation is covered by a tax treaty. In some cases, no treaty exists between the Netherlands and the country of residence. In other cases, an individual may not qualify as a resident for treaty purposes, even though they are considered a tax resident under the domestic legislation of their country of residence.
In such situations, the allocation of taxing rights and the availability of double taxation relief require closer examination. Dutch domestic legislation may continue to apply without treaty restrictions, while any relief from double taxation will depend on the applicable national rules.
Practical consideration
If you own Dutch real estate while living abroad, particularly in a country without an applicable tax treaty, it is advisable to assess the tax position in both jurisdictions. The absence of treaty protection can create unexpected tax consequences, making specialist advice particularly important.
Dutch Tax Returns and Practical Considerations
If you live abroad but own real estate in the Netherlands, you will generally still be required to file a Dutch income tax return.
Non-resident taxpayers generally file a Dutch income tax return for non-residents (commonly referred to as the C-form), reporting their Dutch-source income and assets, including Dutch real estate held in Box 3.
If you move to or from the Netherlands during the year, a different tax return applies: the M-form (M-biljet). This return takes account of both the period during which you were a Dutch tax resident and the period during which you were a non-resident.
Even where Dutch real estate is your only remaining connection with the Netherlands, the Dutch tax consequences should not be overlooked.
The classification of the property, its valuation, the financing arrangements and the applicable international tax rules may all affect your tax position.
Final considerations
Owning Dutch real estate while living abroad is not necessarily complicated, but the tax consequences can be significant.
Whether you are considering purchasing an investment property in the Netherlands, retaining your former home after emigration or reviewing an existing property investment, understanding the applicable Dutch tax rules is essential.
At Fraai Fiscaal, I provide independent, specialist Dutch tax advice on real estate investments, including Box 1, Box 3 and cross-border property ownership.
If you would like to discuss the Dutch tax consequences of your property investments, please feel free to reach out.