The non resident tax payer is obviously a non resident, but why should the non resident pay tax in the Netherlands?
Non resident tax payer
A non-resident tax payer is a person that is not living in the Netherlands, but who owns property in the Netherlands. The tax treaties the Netherlands has with the numerous countries state on the subject of property, that property is taxed in the country where the property is situated. Actually a logical situation, as the property is basically a burden on the soil of that country, hence it is only fair that this country can tax the property.
How do you become a non resident tax payer?
Often you first come to the Netherlands to work, you like it here, you purchase a house and after a period of time you go back to your home country or to a new challenge in another country. The real estate prices are going up rapidly in the Netherlands, therefore often the house is not sold, but rented.
Due to the fact you were already a tax resident in the Netherlands, you have a Dutch tax number. The moment you leave the Netherlands you deregister from city hall and you have become a non resident tax payer for the property you own in the Netherlands.
If you have never lived in the Netherlands, but you have purchased a property either for your children to live in or an investment, then you need to register yourself as a non resident tax payer. This you do NOT do by simply visiting city hall, as they automatically register you as a resident tax payer and then your world wide income and assets are taxed in the Netherlands. You need to contact the city, explain you are a non resident and you are in need of a Dutch tax number or BSN. Then they make for you an appointment where you have to show up in person, with identification and proof of your foreign address (recent bank statement). There you are registered as non resident tax payer.
What is taxed as non resident?
Taxed is the value of the property, minus a possible loan taken out to purchase the property. That amount is then reduced with the tax free amount for wealth tax and over the outcome you are more or less due about 1.2% income tax.
The value of the property is determined if it is a residential property, by the city via a so called WOZ value. That is the value to be used.
The rental income is not taxed, the costs you have for a loan (interest) or maintenance are not deductible. The rental income, if lower than you would expect for the value of the property, can influence the to be calculated value of the property.
When are you expected to file the non resident income tax return?
In the year that you own the property on January 1, that is the first year you need to file the income tax return. If you are not invited to file, but you are aware you need to pay income tax, as you purchases a house well above the tax free amount without a loan, you ought to know you need to file the tax return.