Benefit property taxed as a result of other activities (ROW) no Box3
Often I get clients at the table who have the plan to stop their property in real estate in order to obtain a better return than on a savings account or deposit. The return is often disappointing if you have to outsource the renovation, maintenance and finding of tenants. Creative as a human being, the plan is then devised to do it yourself and to recruit (labor) and it usually goes wrong from a fiscal point of view.
Capital atmosphere (box 3) and work atmosphere (box 1) are taxed differently in the law.
It is understandable that these tariff differences between Box 1 and Box 3 encourage conflicts.
Box 3: 30% tax based on the assets on 1 January of the calendar year at a flat rate of 4%. The wealth tax then amounts to: 30% * 4% is 1.2%. Also called capital gains tax in the law.
The base will still be reduced by € 21,139 per taxpayer.
Box 1: progressively taxed up to a maximum of 52% income tax (for the sake of simplicity the ZVW left there).
In order to distinguish the above, case law has developed the following:
“ normal ” and “ more than normal ” asset management. Also called active and passive asset management. To determine if it is one or the other, there are 4 main lines:
- The nature and scope of the activities
- The target return
- The risk
- The method of composition and size of the power
The basis is an average private investor.
Ad1. For example, a broker who bought up, refurbished and rented twenty-three heavily neglected buildings with borrowed capital. In this regard, the Court ruled that ‘this demanded so many interventions that the interested party must have spent an important part of his time on this’. In other words, no Box3
Increasing knowledge and skills from income from work for asset management quickly goes up to ROW
Ad2 and 3. No average private investor by, for example, attracting loan capital in order to achieve greater return. So there is more risk that an average investor would not do.
Ad4. A large capacity is more likely to be used for a commercial mode of operation than a small capacity. The work that comes with a small capacity will come closer to that of a normal investor. In the case of larger capital, on the other hand, there can still be pure capital investment.
The speed with which the power is converted into another asset (buildings) and back again weighs.
In addition to speed, the spread of risk also plays a role. The assumption is that a normal investor will keep his risk low, and will therefore spread his assets when this capacity becomes relatively large
Article 2 of the Trade Register Decree 2008 states when there is an enterprise.
An enterprise is deemed to exist if a sufficiently independent organizational unit of one or more persons exists in which services or goods are supplied for third parties by sufficient input of labor or resources. or works are realized with the intent of material gain (profit motive). Under the second paragraph, there is no question of an enterprise if there is insufficient scope of activities or turnover.
The definition of entrepreneur will not cause problems in most cases. In a number of cases, however, it is conceivable that it is not entirely clear whether there is entrepreneurship. It is important that you participate in economic traffic or that you add value. The (one-off) sale of your car to the neighbor does not lead to entrepreneurship. However, if you are going to sell several cars, then there will soon be entrepreneurship.
A nice example is the judgment: Advantage with property sale taxed as result of other activities (ROW) no Box3
TIP : Regardless of which tax your asset management will cover make a real investment budget
TIP : box 1 or even box 2 can be beneficial (read also box 3 prefer not to tax)
ATTENTION : Splitting a property by the notary is not a normal asset management, because value is added.
If you have plans to invest in real estate, we can help you organize this in a tax-friendly way. We can also review your pre-calculation and compare it with our experiences. </ P>
If you want to know more about our services, please contact Rob Visee. You can also use the contact form on this site or by using the “Call me back” option . We can be reached by phone during office hours by calling +31 (0) 36 5304248.