Calculate rental value for 2018

You will also pay a rental value lump sum for your own home in 2018. The rental value is part of the housing costs. The municipality determines the WOZ value of your house and you not only pay the known real estate tax on it to the municipality, but also a rental value lump sum to the Tax Authorities of the State, because the Tax Authorities see it as extra income. How much more or less will you pay in rental value?

Rental value lump sum 2018

The rental value has a progressive tax rate. The more expensive your house is, the more tax you have to pay. Just look at the following tax brackets for the rental value lump sum:

Calculate rental value for 2018, calculate notional rental value for 2018:

WOZ value more than

WOZ value is lower than

Rental value lump sum 2018

12,500

0

12,500

25,000

0.25 percent additional tax

25,000

50,000

0.40 percent additional tax

50,000

75,000

0.55 percent additional tax

75,000

1,060,000

0.70 percent additional tax

1,060,000

7,420 plus 2.35 percent addition of the value that is higher than 1,060,000 euros

This means that if you have your own home with a WOZ value of 220,000 euros, the rental value is equal to 1,540 euros. In a market in which house prices are rising, you will quickly pay more in rental value in 2018 than in 2017.

What does the rental value mean in terms of additional housing costs?

The rental value and notional rental value mean an additional burden for those who own their own home. If, as in the above example, you have a house worth 220,000 euros, the tax authorities will require you to pay income tax on the calculated rental value of 1,540 euros as if this were additional income for you. The exact amount of tax depends on how much income you earn and have. With an average income, you will pay 42 percent in tax on this lump sum in 2018, or almost 650 euros. This is certainly an amount to take into account when you buy a house. If you also have a mortgage with mortgage interest deduction, the addition means less deduction. With a low mortgage interest rate or extra mortgage repayments, the addition can even ensure that there is no longer any mortgage interest deduction left. In fact, in some cases a mortgage interest deduction can turn into a mortgage interest addition.

How can you avoid rental value tax?

Everyone with their own home must take the rental value of the home into account when filing their tax return. A value of zero addition occurs sporadically. But the tax authorities also attach great importance to the repayment of a mortgage, which means there is an escape for those who have little or no mortgage interest deduction. When you file your income tax return for your own home, you will also encounter the deduction item: no or small home ownership debt, also known as the Hillen deduction item. This deduction makes it possible to completely neutralize the addition of the rental value. If you have no mortgage interest deduction and no mortgage, you will not pay a rental value lump sum. There are a few other exceptions for this 2018 notional rental value.

Exceptions to payment of rental value lump sum 2018

You do not have a rental value lump sum in the following situation:

  • You can apply the Hillen Act (see above);
  • You have already bought a house, but you are not living there yet;
  • Your former home is for sale and you live somewhere else. Then the rental value applies once, not twice;
  • Your own house is uninhabited because you are working abroad for a while.

My house is for sale

If your house is for sale and you do not yet have another home to purchase, then from a tax perspective it is still your own home and you still pay the rental value. Even if the house is for sale empty. In that case, you retain your mortgage interest deduction, but this is offset by the addition of the rental value plus notional rental value. For your own home, a high rental value may mean that you are no longer eligible for mortgage interest deduction. However, you do not have to add the rental value for a second home in box 3 of the income tax. This is the case, for example, if you have left your home and are now renting the home to others or at a holiday home.

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