Renting out your garage box can provide a monthly source of income. Now that interest rates on savings are so low, more people want to invest in real estate. This could be a house or apartment, but also a garage box. Buying a garage box is a sound real estate investment. Just like a house or apartment, you can also rent out a garage box. And successfully so, because the enormous lack of space in the Netherlands has increased the demand for storage space. But what are the tax implications when you rent out your garage box?
Paying VAT on garage box rentals
The rental of real estate is exempt from value-added tax (VAT), unless the rented space is used as a parking or vehicle storage space. According to a ruling by the Supreme Court, a garage box is considered a parking space, and its rental is therefore subject to VAT. As the lessor of a garage box, you are required in that case to include the VAT in the rental price and remit it to the Tax and Customs Administration.
Garage box as parking space means paying VAT
If you rent out a garage box and do not explicitly exclude its use as a parking space in the contract, tax must be paid on it. If you fail to do so, you risk a supplementary tax assessment. If the garage box is not designated for storing vehicles or if it is not immediately possible to use it as such, no VAT needs to be paid on the rental. Therefore, ensure this is documented in the contract with your tenant.
What should you consider when renting out a garage box?
As the owner of a garage box, management and maintenance are your responsibility. However, the VAT on investments and maintenance is deductible from the VAT you charge your tenant. Please note: for private individuals, the rental amount includes VAT. The VAT you remit to the Tax and Customs Administration must be extracted from the rent received and paid (after deducting input tax). If the tenant is a business owner, the rental price is increased by the VAT. This must be visible on the monthly invoice you send to your tenant.
A garage box from XLBox Nederland is a fantastic investment. Purchase one or more garage boxes for rental and benefit from a gross annual return of no less than 9%. Garage boxes retain their value, are easily tradable, and are relatively maintenance-free. In short, an ideal investment!
Can XLBox Nederland rent out and manage my garage box? What are the costs?
No time or desire for the hassle? XLBox Nederland can handle the rental, financial, and technical aspects for you from A to Z.
Interested in renting out your garage box? With this tool, you will find the perfect garage box that fits your needs and budget.