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Short stay and VAT/Tourist tax

Owning real estate in the Netherlands and providing the possibility for tourists to stay for a short while in the house and offer hotel services as a laundry service, then this is regarded Short stay.

Short stay is providing the above mentioned services if it takes longer than 5 nights with a maximum period of 6 months. If you provide this service, then you need a license from city hall.

Providing short stay facilities makes the owner of the real estate an entrepreneur for VAT purposes. This is caused by the fact that the income is subject to 6% VAT. The owner has to file quarterly or annual VAT returns. The VAT on the costs related to the short stay is 21%, therefore it is not necessarily an inconvenience to have become a VAT entrepreneur, as it can result in VAT refunds.

You might think that you will not spend to much on costs, but if you realize that when you have the services done by other companies, the real estate remains a Box 3 asset. That implies that you only pay 1.2% interest over the difference between the economic value set by city hall minus the debt related to the purchase of the real estate. The actual short stay income is not taxed, neither are the costs deductible.

Besides the VAT entrepreneurship, you need to file the tourist tax return at the end of the year. Tourist tax is assumed to be included in the short stay income earned.

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