Do you have private business premises that you do not make available to your own company? In that case, you are obliged to state the value of these business premises annually in box 3 of the income tax. You actually owe 1.2% tax on the value, less any debts.
The Right Choices
A number of rules have been set by law to determine the value of assets. A distinction is made between homes and other immovable property such as business premises. For homes, they must be valued at the tax value of the calendar year. The reference date for the tax value is 1 January of the previous year. The value on 1 January 2014 is therefore decisive for the 2015 income tax return. In many cases, a reduction of the tax value can still take place for homes on the basis of the rent received (the so-called vacant value ratio). For the taxes for small business this is important.
For the Right Business
For business premises, this does not correspond to the tax value, but to the economic value on 1 January of the tax year. Although the tax value can be a good indicator of the actual value, there are sometimes considerable differences. It is therefore important to make an estimate of the actual value yourself. There are various methods for this.
- For the value of business premises, you can, for example, look at the selling prices of similar properties. By comparing these sales prices with your business premises and by taking into account any differences in, among other things, the size, location and state of maintenance, you can determine the true value of your business premises.
- One method that is widely used in practice is to capitalize the rental income. The annual rental income is multiplied by a certain capitalization factor. The capitalization factor depends on the type of business property and the risk you run. Often a value is calculated between 8 and 12. The vacancy, the location, the way in which it was built and the maintenance are important here. For example, does a property have an increased risk of vacancy? Then this leads to a lower capitalization factor.
Look for It
You can also instruct an appraiser to have a valuation carried out. The appraiser will then record the value of the business premises in an appraisal report. It is also possible to carry out this valuation in consultation with the tax authorities.
The actual value of business premises on the basis of one of the above valuation methods can be considerably lower than the tax value. You can include this lower value in your income tax return so that you effectively save 1.2% tax on the difference. This also gives you a good reason to object to the next tax decision so that you can reduce the local taxation.
Because the Tax and Customs Administration can ask you to substantiate the actual value, it is important that you record how you determined the actual value. You are of course also free to continue to opt for the tax value. For the 2015 income tax return, you will need the tax value 2016, because this has 1 January 2015 as the reference date. Prevent yourself from being a thief of your own wallet by using the tax value as standard in the income tax return. A critical look at the valuation can certainly be rewarding.