Monument cost deduction is basically a subsidy to private owners of monument buildings to restore them as they were. This deduction will be terminated as per December 31, 2016.
What is the monument cost deduction?
In the Netherlands nearly all deduction possibilities have been terminated in the year 2001. A small number remained, among which the monument cost deduction.
A monument can be owned by a person being their main residence (Box 1) or as investment (Box 3). In both cases a monument deduction exists.
What is tax deductible?
Tax deductible are the costs paid for restoring the building in its former glory. This part is the tricky part, as the tax office will check everything being deducted. We always recommend clients to come to an agreement with the tax office which costs are tax deductible before the renovation starts, better than after. Before the renovation you can still argue with the tax office, or make small changes with the result that the tax office does accept the costs. After the renovation the tax office simply denies without anything you can do about that.
Example of monument cost deduction
You would like to restore the floor, but with floor heating. Then the costs of the wooden floor are tax deductible if in line with the monument. The costs of the floor heating are not deductible.
Heating, you cannot reinstall what was done at that time, so you need to find the best next thing. That will be a discussion with the tax office if something can be tax deductible.
New kitchen, not everything is deductible, but if you can put it in shape of some kind the tax office agrees, more can be deductible.
What amount of monument cost deduction is taken into account
Of the accepted monument costs 80% of these costs are taken into account in the income tax return.
What is the monument cost deduction situation from January 1, 2017?
None of any monument costs are taken into account. This was presented at the ‘Prinsjesdag’ legislation presentation by our Government.
What damage control can be done with respect to monument cost deduction?
Damage control is not done by paying the builder this year and have the job done next year. Damage control can be done by paying the builder this year and have the builder do the renovation this year as well. If that involves persuading the builder to make your renovation a priority, then that is involved. At the same time we would not recommend to hurry a renovation without approval of the costs of the tax office. But time is limited.
Orange Tax Services
The monument cost deduction is not a frequent used deduction. Nevertheless, because of the open end type of subsidy the Dutch Government thought it best to terminate this deduction. A non fiscal transitory arrangement will be put in place for the years 2017 and 2018. What that will imply is unknown yet. We regret the short notice period for a situation that is being planned years ahead.