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Proposed VAT revision from 2026 on costly services related to immovable property

The government intends to introduce a VAT revision scheme from 2026 for costly services related to immovable property. By anticipating this proposal now, you may be able to save VAT.

Case

VAT revision scheme for movable and immovable investment goods

There is already a VAT revision scheme in place for investments in movable and immovable investment goods. This scheme tracks the use of movable investment goods for four years after the year of commissioning and nine years for immovable investment goods. If the use of the investment good for VAT-taxable and/or VAT-exempt supplies changes (partially) during that period, it may affect VAT deduction. The VAT previously deducted may then be revised.

VAT revision scheme for services

There is currently no VAT revision scheme for services related to immovable property. This means that, for example, for homes that undergo significant renovations and are then rented out subject to VAT for a short period, full VAT deduction is available. If those homes are later rented out VAT-exempt, that VAT deduction is not revised.

Please note!
In principle, the rental of an unfurnished home is VAT-exempt. Only in so-called short-stay situations is the rental subject to 9% VAT. For more information on this, please contact one of our advisors.

Proposal for VAT revision on costly services

The government deems it undesirable that there is no VAT revision scheme for costly services related to immovable property. Therefore, the government has proposed a scheme where, from January 1, 2026, a VAT revision scheme will apply for the year of commissioning plus the four subsequent years for costly services related to immovable property starting from €30,000 exclusive of VAT.

Please note!
When it comes to services related to immovable property, think of renovations and maintenance of immovable property. According to the proposal, if such a service amounts to at least €30,000 exclusive of VAT from January 1, 2026, a revision scheme will apply.

From January 1, 2026

The VAT revision scheme will apply to costly services that are commissioned from January 1, 2026. So if you commission these services before January 1, 2026, they will not be affected by the proposed scheme.

Advantageous or disadvantageous?

The proposed scheme may have adverse effects if the VAT revision results in you having to repay deducted VAT in part. If the use of your immovable property changes from VAT-exempt to (partially) VAT-taxable, the proposed scheme can also have a positive impact. In that case, you are entitled to more VAT deduction.

Please note!
In the first case, it might be better to plan the services related to immovable property before January 1, 2026. In the second case, commissioning the services before January 1, 2026, might be less favorable.

Internet consultation

All of this, of course, depends on whether the draft bill proceeds. If it does, factors such as the intended use in the year of commissioning the services and the following four years will play a role in the assessment of what you could do.

The proposal was open for internet consultation until April 2, 2024. Anyone who wished could provide feedback on the proposal until that date.

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