A recent court ruling confirms that the temporary rental of newly built properties, in certain cases, give entitlement to a VAT refund on construction costs. This development offers real estate entrepreneurs new tax opportunities — provided it is applied with due care.

🔍 What exactly happened?

In a case brought before the court, the matter concerned a developer who temporarily rented out newly built properties. The key question was whether he could deduct VAT on the construction costs. Normally, residential rentals are exempt from VAT. However, the exception for short-stay rentals — short-term stays for guests similar to hotel accommodations — may allow for VAT deduction.

In this particular case, the court ruled that the conditions for VAT-taxable rental were met: the property was rented out furnished to short-term tenants, comparable to a hotel concept. As a result, the developer was entitled to reclaim the VAT on construction costs.

⚖️ Why is this important?

1. Rental exemption ≠ always no VAT refund
   Residential rental is generally exempt from VAT. But if it qualifies as genuinely short-term, hotel-like rental (up to approximately 6 months, fully furnished, no maintenance by the tenant), this exception can apply and entitle the landlord to VAT deduction.
2. Temporariness matters
   It's crucial that the rental is genuinely intended to be temporary — for example, pending a later sale or long-term lease. Long-term rentals (such as contracts averaging 18 months) are usually considered standard rentals by the courts, and in those cases, no VAT deduction is allowed.
3. Upcoming legal changes
   As of January 1, 2026, the law is expected to change. The so-called adjustment scheme will then be extended to include services related to immovable property. If the use changes — such as from VAT-taxed to VAT-exempt rental — previously reclaimed VAT may have to be adjusted within a five-year period.
    

Practical implications for rental entrepreneurs

✅ Conditions for VAT deduction eligibility:

• The property is rented furnished;
• Rental period is ≤ 6 months, typically short-term with no relocation of the tenant’s social base;
• Tenants do not pay municipal taxes or for inventory;
• ​The rental offering resembles the hotel/vacation rental market.
   

📝 Our tips

1. Determine the rental type: Clearly define whether you’re offering short-stay rental as per the criteria above.
2. Document thoroughly: Keep a detailed rental calendar, contracts, invoices, and rental duration records.
3. Monitor the adjustment period: From 2026 onwards, there may be adjustment obligations; track any changes in property use closely.
4. Check your tax position: Consult a tax advisor to make the most of this opportunity — and to mitigate risks.

🏛️ Applying for a short-stay permit in Eindhoven: What you need to know

The municipality of Eindhoven enforces strict rules on short-stay rentals to maintain the livability of residential neighborhoods. You need a permit if you want to temporarily rent out a self-contained residential unit (for less than 6 months) to expats, international students, or business travelers.

✅ Tips for a successful application

1. Choose the Right Location
Short-stay rentals are mainly allowed within the ring road or near the city center. Obtaining permission is usually more difficult in residential neighborhoods outside this area. Always check the applicable zoning plan before applying.
 

2. Ensure Good Spatial Integration
The municipality assesses whether short-stay fits into the surroundings. Your chances improve if:

• the property is part of a larger building with mixed uses;
• the building was previously used commercially (e.g., former office building);
• ​you have sufficient parking available on your own property.
   

3. Minimize the Risk of Nuisance
Eindhoven takes nuisance seriously. Make it clear in your application that you will:

• implement soundproofing measures;
• establish house rules (no parties, limit on number of guests);
• ​appoint a manager who is reachable 24/7.
   

4. Demonstrate That It Is Truly Temporary
Explain who your temporary target group is (expats, project staff, etc.). Provide examples of similar stays. Explicitly state that tenants will not register at the municipal personal records database (BRP).
 

5. Documentation Is Crucial
Always include:

• a floor plan of the property;
• an explanation of your operational plan;
• a management plan (e.g., key management, complaint handling, compliance monitoring);
• ​proof of ownership or consent from the Homeowners’ Association or landlord.
   

📄 How to Apply

Submit your permit application via the Environmental Permit Portal (Omgevingsloket):
www.omgevingsloket.nl

Required documents:

• completed application form;
• site plan;
• ​justification according to municipal policy.

Note: the review process takes approximately 8–12 weeks. Start your application well in advance.

📌 Conclusion: Short-stay rental is possible in Eindhoven but only under strict conditions. Good preparation, choosing the right location, and a thorough management plan are essential for a successful permit application.

📎 View the full decision here: lokaleregelgeving.overheid.nl/CVDR702319/1