As a self-employed person with business premises, you can sometimes deduct its costs. We call this depreciation. Each year, you can use part of the value of the building as business expenses. Note: this only applies to the business part of the building. The tax authorities have strict rules for this.
Business use: ownership or rental
Whether you rent or buy premises makes a difference to depreciation. If you buy a building, it will often appear on the balance sheet and you can depreciate it. Do you rent a building? Then you may sometimes write off things you pay for yourself, such as renovations or furnishings.
And do you use the property partly privately and partly for business? Then you may only write off the business part. It is important to estimate this part well and preferably prove it. You do this with a floor plan or the number of square metres, for example.
VAT aspects of business premises
You cannot usually reclaim the VAT on the purchase of a property. But that does not apply if the property is new or has just been renovated (and you have to pay the VAT yourself). You can often reclaim the VAT on maintenance and renovation. As long as they are business expenses.
Do pay close attention to the revision rules. Sometimes you have to adjust VAT over several years. For example, if you change the use of the premises. If you buy a property and later rent it out or also use it privately, this changes your VAT deduction. These kinds of rules are quite complicated. Therefore, if in doubt, ask your accountant for help.
Tax arrangements on depreciation
You may depreciate a business property up to the base value. For a building that you use yourself, this is usually the WOZ value. Each year, you write off an equal part of the difference between the purchase price (without the land) and that floor value. This is usually 3 per cent per year of the value of the building. You are not allowed to write off the land.
Important points to consider when depreciating business premises
- You can only deduct the business part of the property. Do you use part of it privately? Then you write off only the business part.
- Land is not included in depreciation, only the building itself.
- The floor value is equal to the WOZ value. From 2024, you may not depreciate beyond this value.
- You start depreciating from the moment you take the property into business use.
- Do you rent premises? Then you are allowed to write off investments such as renovations, if you pay for them yourself.
Conclusion
As a self-employed person, you can write off a business property under certain conditions. This must be the business part of the building. You only write off up to the base value. You can usually reclaim part of the VAT on costs and renovations. This depends on how you use the property. Do you rent a building? If so, you can sometimes write off your own investments. Always make sure you keep good records and proof of business use. This way you can easily explain everything in case of an audit.
