Real estate fiscal matters 2006

What’s new in 2006 and what can we expect in 2007

Fiscally 2005 was a restless year. Never have there been so many rigorous changes in the law. Think about the new health care system and the new tax plan 2006. And as we speak the next plan “Working on Profit” is already being introduced. In order to keep you posted on the latest developments, Pepijn Koch will describe a number of changes in the law in this article that are related to real estate and have been in effect from the first of January 2006.

Exemptions transfer tax with corporate takeovers

The state secretary has already announced that he wants to extend the possibilities for fiscally silent company takeovers. According to Pepijn Koch real estate usually plays a big role in these company takeovers because it is hard for new entrepreneurs to finance them. Especially when there are transfer taxes involved.

Tax plan 2007

At the introduction of the 2003 tax plan the government already tried to discharge depreciation on real estate that is seen as an investment. I n the new bill “Working on Profit” also knows as tax plan 2007, the government presents another proposal in order to limit the depreciation on real estate. According to the government this time with a legitimate reason. The Dutch position as country to settle for companies has dropped according to Pepijn Koch. In the past Holland was the best country for companies to settle. This decline is caused by the bad fiscal settlement climate. For example Holland has relatively high corporation taxes compared to other countries in Europe. One of the most important parts of the new bill “Working on Profit” is the structural degradation of the corporate taxes so Holland can compete with other European countries. For now the rate in 2007 is being lowered to 29,1%, and over the first €22.689,- the rate is lowered to 24,5%.

This article is written in cooperation with drs. Pepijn Koch MRE, partner at NBC Van Roemburg & Partners tax advisors in Alkmaar and Volendam. Contact phone: (+31) 0299 657060.