Introduction of VAT revision period for real estate services
01/10/25
Starting 1 January 2026, a VAT revision scheme will apply to certain services related to real estate (“real estate services”). This change may affect anyone who owns or leases Dutch real estate. As the new rules take effect in 2026, we recommend analysing the impact in a timely manner and adjusting your administration accordingly.
Current VAT revision rules
VAT on the purchase or development of real estate is subject to a 10-year revision period. For movable property, a revision period of 5 years applies. If the use of the property changes within the revision period, previously recovered VAT must be adjusted (“revised”). For example: if a building is initially leased out VAT taxed and later leased out VAT-exempt, part of the VAT previously recovered on the development or acquisition must be repaid to the Dutch tax authorities.
Under the current legislation, the VAT recovery on renovation and (significant) refurbishments of immovable property becomes final in the year when the services are first used. A change in use in a subsequent year therefore does not trigger a VAT revision amount payable or receivable.
New VAT revision rules for real estate services as of 1 January 2026
From 1 January 2026, the VAT revision scheme will be extended to include certain services related to Dutch immovable property.
Which real estate services fall under the new scheme?
The new VAT revision scheme applies to services such as renewing, enlarging, repairing, replacing, and maintaining Dutch real estate, including demolition work related to renovations. Examples provided by the Dutch State Secretary include painting window frames and doors (interior or exterior), soil or asbestos remediation, installation of kitchens and bathrooms, insulation, and façade or roof renovations services that serve the property over multiple years. Materials, installations, machinery, and tools that are integrated into the service and lose their independent function after installation or assembly are also included.
Threshold amount
The VAT revision scheme applies to real estate services with a value of at least 30,000 euros.
VAT revision period
For such investment services, a review period of 5 years applies. For certain major real estate services, such as a thorough renovation or an extension, EU case law can be invoked that allows for an extended revision period of 10 years. We expect that further clarification will follow later this year on how this should be documented and at what point in time this should be done.
What does this mean for your organisation?
VAT-registered businesses that own or lease Dutch real estate will need to monitor, per building, whether real estate services are received that are in scope of the new VAT revision scheme for real estate services and whether a change in use occurs during the chosen 5- or 10-year VAT revision period that triggers a VAT revision amount payable or receivable.
We expect that the new VAT revision schemes increases the administrative burden for businesses that own or lease real estate.
If you have any questions following this newsletter, please contact PwC.
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