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You are here: Home Finance & Business Tax Proposed changes in deducting cost of renovation of your...

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06/12/2011Proposed changes in deducting cost of renovation of your monument as of 2012 (sponsored contribution)

Proposed changes in deducting cost of renovation of your monument as of 2012 (sponsored contribution) On budget day, a number of changes in the current tax act have been announced. Most measures aim at, unsurprisingly further improvement of the budget. One of the measures relates to the deductibility of the renovation cost of your monument.

As you may know, if you own a monumental home, expenses you incur may qualify as tax deductible expenses in your income tax return. This deduction only applies to monuments listed in the national monuments and historic buildings register; a so called "rijksmonument".

A distinction between "cost of improvement" and "maintenance cost"  needs to be made; only the latter can be deducted. Maintenance cost could also mean cost of renovation of a building, as long as nothing is added on or changed.

As of 2012, only 80% of the cost qualifying as maintenance cost are tax deductible. Furthermore, owner's cost such as insurance, water and property tax and a depreciation of the building can no longer be deducted.

On the other hand, the threshold for non deductibility valid until 2012 (0,8% of the WOZ value for primary residence, 4% for other buildings) will no longer be applied.

As of 2012, there will no longer be a distinction between owner occupied dwelling or monuments rented out.

In case you have made irrevocable arrangements for the renovation of your monument in 2011, you can request the tax authorities to deduct these expenses on the basis of the current tax regulations, provided that the expenses have been paid before January 1, 2014.

If you are the owner of a monument and you are expecting substantial maintenance or renovation in 2012, please contact FINSENS financial advisors to see if it may be worthwhile to conclude contracts before December 31, 2011 and keep the option open to use the current tax deduction regulations.


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