In the Netherlands owners of a house that is regarded their main residence can claim back tax for the costs made related to the debt/mortgage taken out for the purchase or maintenance of this house. This tax back amount can be received up front in monthly installments. What if your 2015 refund is not being paid by the Dutch tax office?
The house mortgage refund is initiated either by the owner of the house, the real estate agent, mortgage expert or a tax advisor. A form is completed and then payments are made by the tax office to the person who owns his home and took out a debt for the purchase. The tax office trusts the forms are completed correctly with respect to the mortgages.
Trust is good, but checking is better
Hence the Dutch tax office insists on persons who received a preliminary refund over the concerning year to file a tax return. That tax return shows the actual income amounts, WOZ amount and mortgage costs. WOZ stands for the value the local county allocates to the house on basis of which the interest deduction is limited. Against this actual tax return is set off the preliminary refund already paid out and if there is a balance, this balance is settled. Settled implies that if you have not received enough from the tax office, you receive an additional refund. If you received too much, you have to pay back the excess. There can be a balance due to changes in the interest rates or changes in the WOZ value.
2015 preliminary refund automatically continued
The 2014 refund is converted by the tax office into a 2015 monthly refund. However, this year this conversion not only came with delays but also with denials. Most likely the investigation for the denials is the cause of the delay.
Why would the 2015 preliminary refund be denied?
As stated above, the Dutch tax office demands you to file the income tax return in order for them to check if what you received back is ok. If you for some reason have not filed your 2011, 2012 or 2013 income tax return, then the Dutch tax office also does not pay to you the 2015 monthly refund.
Some of the reasons to terminate the 2015 preliminary refund:
- 2013 extension to file the income tax return expired and no return was filed;
- The tax resident left the Netherlands;
- Other residents than the owner or his family members are registered at the address;
- The house was indicated as empty and put up for sale, but no evidence was found by the tax office on Funda
- The tax office has the opinion the house is not the main residence, but rented
We process a lot of preliminary refund requests and we have experienced all of the above. Our method is to simply start the investigation contacting the tax office to make inquiries about why the 2015 preliminary refund has been terminated. If the above mentioned points are addressed, then we either solve the situation by filing the tax return or explaining to the client that he or she is no longer entitled to the refund.