The 2025 Dutch tax plan: Impact on real estate sector

No changes in CIT rates

Contrary to previous years, no amendments are proposed to the Dutch corporate income tax (CIT) rates: The first bracket applies to taxable amounts up to € 200,000 for which the rate remains at 19%. Taxpayers will pay the top CIT rate of 25.8% on those taxable amounts over € 200,000.

New RETT rate for residential real estate

Currently, Dutch real estate transfer tax (RETT) applies two rates depending on the qualification of the object: Dutch residential real estate where the owners use the property as their own residence is taxed at a (lower) 2% rate, while all other real estate generally acquired by commercial parties and investors is taxed at a (higher) 10.4% rate. 

As part of the 2025 Tax Plan, a new RETT rate is introduced for residential real estate (i.e., not use the property as their own residence) held by commercial parties and investors. This reduction is intended to attract real estate investors, thereby increasing the necessary investments in housing. The rate will be 8% and it will enter into force on 1 January 2026. 

This means the following RETT rates shall apply:

• RETT on residential real estate where the owners use the property as their own residence: 2%
• RETT on residential real estate where the owners are investors (i.e., not use the property as their own residence) – as of 2026: 8%
• RETT on non-residential real estate: 10.4%

No reduced VAT rate for accommodation (hotels)

The reduced VAT rate of 9% will no longer apply to cultural goods and services from 1 January 2026 onwards. For all such goods and services - except cinemas and day recreation - the VAT rate will be raised to 21%. In addition, the reduced VAT rate will also be abolished for accommodation (hotels) – excluding camping sites – as of 2026.

Tackling short stay schemes used for VAT recovery

The government has announced that it wants to prevent schemes that are aimed at obtaining VAT recovery on property renovations if the property will afterwards mostly 
be used for VAT-exempt services. Currently, VAT incurred on renovations may be recovered by the owner of the property by renting out the property for a short-term period (since the latter activity is VAT-able). The recovery will not be recaptured when the property is subsequently leased out for long-term periods without VAT.

In order to prevent these short-stay schemes, the 2025 Tax Plan includes a clawback measure: It is proposed to extend the existing adjustment scheme (herzieningsregeling) to all services related to immovable property with a value of at least € 30,000 (including renovations and maintenance services). The revision period for such services will be 5 years. This means that a VAT deduction previously applied is compared each year (20% each time) with the use of the service in that year.

The proposal includes a grandfathering provision for existing situations in the form of a postponed entry into force as of 1 January 2026.

Addressing RETT land consolidation schemes

Land consolidation (ruilverkaveling) entails the rearrangement of agricultural land plots and their ownership. Plots of agricultural land that are acquired through land consolidation are currently exempt from RETT, including any buildings on these plots. 

As a result, the land consolidation exemption may also be used to acquire homes or other non-agricultural buildings free of RETT.

The land consolidation exemption should no longer apply to the acquisition of buildings, except for those that are used for agriculture or that qualify as an agricultural 
home. In addition, any buildings acquired using this exemption must be used for commercial agriculture in the subsequent 10 years. If these conditions are not met, the exemption will be withdrawn and RETT still becomes due.

New division exemption in RETT

The purpose of the division exemption (splitsingsvrijstelling) is to prevent that businesses are taxed with RETT as a result of restructuring their business activities. The current division exemption exempts a property from RETT if it has been obtained in a legal division (juridische splitsing). 

The 2025 Tax Plan proposes stricter conditions for the application of this exemption. The following conditions must be met to qualify for the division exemption as of 
1 January 2025:

• a business must be acquired,
• the stake in the business must be held for a minimum period of 3 years, and
• the business must be continued for a minimum period of 3 years.

Provisions included in 2024 Tax Plan, applicable as of 1 January 2025

As mentioned, we also want to highlight certain provisions that were not included in the 2025 Tax Plan, but that will enter into force as of 1 January 2025.

Foreign entity tax classification rules

Originally, the Dutch Ministry of Finance intended changing the Dutch entity classification rules as of 1 January 2022 to reduce mismatches with foreign entity classification rules. This was in relation to the classification of Dutch and foreign entities as either tax-transparent or opaque. 

New entity classification rules have been proposed in the 2024 Tax Plan, outlining the characteristics of Dutch legal forms and their foreign equivalents, and consist of two methods:

• Fixed method (for entities resident in the Netherlands): A non-Dutch entity that is resident in the Netherlands and whose legal form is not comparable to that of a Dutch entity will always be classified as non-transparent and therefore independently subject to tax.
• Symmetrical method (for entities resident outside the Netherlands): The Netherlands will follow the classification made by the foreign jurisdiction for non-Dutch-resident entities incorporated or entered into under foreign law that are not comparable to a Dutch entity.

The new Dutch entity tax classification rules will be effective from 1 January 2025. Certain transitional arrangements have been introduced as of 2024, to allow funds for 
joint account, open limited partnerships and the participants in such entities to restructure tax-free during the year.

This may amongst others impact Dutch-German structures in which German KG’s are involved, which currently qualify as non-transparent for Dutch tax purposes if KG 
interests may not be transferred without the consent of all partners. As of 2025, any KG will in principle be considered tax transparent for Dutch tax purposes. Please note that the status change from non-transparent to transparent is considered a deemed disposal of the assets owned by the KG for Dutch tax purposes (i.e., a taxable event)