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Dutch Second Chamber Backs Revised Tax Plan

by Ulrika Lomas, Tax-News.com, Brussels

27 November 2012


The Dutch Second Chamber has recently adopted the government's 2013 tax plan, providing for a raft of fiscal measures, including plans to introduce a so-called "lessors tax" in 2013, to increase the country's insurance premium tax, and introducing new rules applicable to the deduction of mortgage interest.

According to the Dutch finance ministry, restrictions will apply to the deduction of mortgage interest for loans taken out on or after January 1, 2013. As regards existing mortgages, there will be no changes "in principle," the ministry says. In addition, the period for deduction of mortgage interest on mortgage debts remaining after the sale of a house will be extended to ten years, provided that the outstanding debt is incurred following the sale of a property between October 29, 2012, and December 31, 2017.

From next year, a "lessors tax" of 0.014% will be introduced on the value of the property rented out in the regulated sector. The tax will apply to lessors with ten or more rental homes and rises to 0.231% in 2014. However, the tax plan extends the period within which property sellers may benefit from the 2% reduced rate of property transfer tax to 36 months from the current six months, albeit temporarily.

The tax plan provides for the levying of value-added tax (VAT) on tobacco products to be aligned with the system for imposing VAT on other products, thereby removing the link to excise tax.

Concluding, the finance ministry highlights the fact that the tax plan has been amended since it was first unveiled on Budget Day, following the formation of the Rutte-Asscher cabinet.

As a result, the bill providing for changes to be made to the tax treatment of commuters (namely for the introduction of the "commuter tax") will not now be introduced. Furthermore, the insurance premium tax rate is to rise from 9.7% currently to 21%, and remuneration paid to insurance intermediaries will in future no longer be tax-deductible. Finally, the government will not now introduce the new form of savings tax relief, or "vitality savings plan" (vitaliteitssparen).

TAGS: tax | investment | real-estate investment | value added tax (VAT) | Netherlands | property tax | interest | insurance | real-estate | insurance tax | tax rates | tax breaks

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