Property management Box 3
Rental income tax. An important topic if you have invested or want to invest in real estate. When you operate real estate, the question is always whether taxation will take place in Box 1, 2 or 3. As a real estate investor you have a high degree of influence on this.
Property management in Box 3
As a real estate investor, it is of course essential that real estate yields. You can choose to do a lot yourself and thus save costs and ultimately achieve a higher return on your invested capital. However, be careful! This can have major financial consequences. If you do too many things yourself, the tax authorities may consider this as a result from other activities or profit from business. This has the consequence that your rental income shifts from Box 3 to Box 1 and you therefore have to pay income tax on your rental income instead of wealth tax. This makes a world of difference, given the relatively low levy, the high predictability of that levy and the fact that increases in value are not taxed in Box 3.
How do I keep my real estate portfolio in Box 3?
If you are going to be involved in buying and renting out real estate, you naturally want this to fall under box 3 so that your rental income is untaxed. According to the Tax Authorities, if you own a property where you do not live, the property is characterized as an investment and therefore falls in Box 3. You then declare the net assets of your investment property in your tax return (i.e. the WOZ value minus the mortgage debt). However, in practice it is much less black and white. There may be profit from business or results from other activities. This places you in Box 1, where not only the (rental) income is progressively taxed, but also the value development. The tax rate here varies from 36.65% to 51.75% on the highest part of your income. This is the case when making assets profitable is done in a way that goes beyond normal, active asset management. A very gray area, because what is 'normal, active asset management'. What essentially matters is how much time and work you put into the purchase, rental and sale of your investment properties. If you purchase investment properties as an investment and do little else about it, it is “normal asset management”. However, if you are actively involved in renovation or renovation, recruiting tenants, administration and you have specific knowledge within the real estate world, then there may be profit from business or results from work. These activities all lead to a more valuable portfolio. Not only in terms of occupancy rate and rental amount, but also in terms of client satisfaction and the appearance of the property. Although meeting 1 condition will not be sufficient to establish that there is a business/profit from business, there is still a real risk that the Tax Authorities will quickly classify the additional activities as more than 'normal, active asset management'. In conclusion, to avoid risk, as a real estate investor you want to limit your own involvement and activities as much as possible. To ensure that you remain in Box 3 for multiple investment properties for the tax authorities, it is wise to outsource property management. 365Beheer can mean a lot in this regard and add value to your portfolio. After all, outsourcing these activities does not generate any work for you - and therefore no taxation.Savings check
Outsource property management to 365Beheer
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