Fiscal benefits of owning a drophouse

Fiscal benefits of owning a Drophouse garden office 

Are you an entrepreneur and would you like to have an office in your garden? A Drophouse garden office with a toilet is the best option. You can read more about it in the blog below.

Purchasing a garden office for business

A toilet in your garden office provides a lot of comfort for you and your guests. But it will ensure that your office will also be fiscally attractive.

As a business owner, you can deduct the VAT and depreciate the space, provided the office has a toilet and its own water supply. In addition, you can also write off the cost of telephones, computers, and the like in your business. The important thing here is that your office is located separately from your home. A garden office is then the solution.

What does the DUTCH tax authority say? 

• Independent workspace

A workspace is independent if it can be clearly distinguished by external features. For example, by having its own entrance or other facilities in the workspace, such as its own sanitary facilities (toilet and water supply). You could also rent out the workspace as such, for example, to an unknown person.

There are a number of other factors that play a role, such as whether you rent a house, whether you own it 100% or half, and whether your partner is also a business owner. 

We offer fully insulated garden houses in rural and modern designs with a life span of at least 25 years. We deliver the toilet room completely ready. For the flooring, you can choose between PVC concrete look or PVC wood grain. The walls and ceiling are finished with plaster walls or wood of choice. We advise large windows for plenty of daylight. A green roof can be an option as well. 

• Plumbing

If you want to buy a garden office for business purposes, your garden office must definitely be equipped with its own toilet room. Arrangements must be made for this purpose. The easiest way is to connect to an existing sewer line, but we have a suitable solution for every situation. If a toilet is nevertheless realized in the garden office, it is a simple step to also accommodate a pantry or kitchenette. The costs can then be deducted from taxes. If you have questions about a garden office, the tax rules and the tax office, we can advise you. 

Fiscal consequences

If the workspace does not meet these criteria, then you can not do anything with the cost of the office for tax purposes, even if the cost of furnishings falls between two chairs. If the space does meet the conditions, there are three options:

If the workspace is used in your own business, then:

• no fictitious rental value has to be declared for the workroom;

• the workroom and the related mortgage debt (attributable on a pro-rata basis) fall into (DUTCH LAW) box 3. Therefore, this portion of the mortgage interest is also not deductible;

• 4% of the value of the workspace in box 3 plus the rental costs for the workspace can be added to the profit from the business.

If you are an employee, the notional rental value of the workspace must be reported, but the allowance for the workspace is tax-free up to a certain maximum amount; discuss this with your employer.

If you use the workspace in your own BV, the workspace falls under income from other activities. The compensation paid by the BV and any changes in value is taxed in box 1; the costs are deductible; the BV can deduct the fee; a fictitious rental value for the workspace does not have to be declared.