Property management and the tax benefits

Tax attractive investments in box 3

Are you a private individual and do you manage your own real estate? In this case it can be advantageous to outsource the management of your real estate. By outsourcing the management of real estate to a professional party such as The Brick Club, you keep the management of your real estate passive and you may have to pay less tax. With passive management, you only pay capital gains tax in box 3. If you do not outsource the management, this can be noticed by the tax authorities as a result of other activities. Results from other activities are taxed in box 1, which is a levy that can amount to a maximum of 51.75%.

Will investing in real estate remain profitable after the upcoming legislative change of 2022?

You may have heard of the government’s plans to adjust the capital gains tax in box 3. The new proposal means that the tax rates in box 3 change. In the current situation, your savings are taxed with the same percentage as your investments, for example investments in real estate. The new proposal distinguishes between the tax rates levied on savings and investments. Where you now have to pay a percentage between 1.8% and 5.33% in box 3 for both savings and investments, you will have to pay a fixed rate for investments of 5.33% in the new period.

The question here arises; will investing in box 3 remain profitable in this new situation? The answer is yes! By outsourcing the management of your property to The Brick Club, your investment remains passive. As a result, the Tax and Customs Administration will levy tax via box 3 instead of box 1. Where in box 1 a maximum tax percentage of 51.75% is calculated. The percentage you pay in levies in the new situation will increase in most cases, but investing in box 3 remains profitable compared to an active self-management of your properties.

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