Good news for home-based self-employed workers

Good news for home-based self-employed workers: they may retroactively deduct the cost of their rental property. The Supreme Court ruled that on appeal.

The ruling follows a claim by a construction contractor who reported his rental expenses as a deduction. This the Hague court previously rejected. Now, however, the Supreme Court has ruled on appeal that the rental right is a property right and thus may be counted as entrepreneurial property. The judgment states, among other things, that “a dwelling belonging to one’s business assets must be included as part of one’s business assets the right to rent a dwelling.” Of course, this does mean that the self-employed person must perform work for his company from his rental home.

Full rent deductible

This is good news for home-based self-employed entrepreneurs, who – like self-employed individuals with owner-occupied homes – can take advantage of tax breaks. The full costs of the rental housing may be deducted from the profit, which incidentally implies that there is an addition for the private use of the rental housing: “The labeling of the rental right leads to the fact that the entire amount of the rent may be deducted from the profit and that in return, because of the private use of the house, an amount to be determined must be added to the profit. This addition also concerns the work room,” the Supreme Court ruled.