Are the costs of a garden home tax-deductible?
The purchase of a garden home is not tax-deductible. The Tax and Customs Administration (Belastingdienst) does take an interest in three other places: the financing (box 1 or box 3), the care costs that are still deductible, and the ownership question if your parent pays for the home but it stands on your land. That last one is the most expensive pitfall.
The purchase of a garden home (mantelzorgwoning) is not tax-deductible. There is no deduction for it, and as a private individual you cannot reclaim the VAT. The costs of home adaptations have also no longer counted as specific care costs since 2014; at that time they were removed from the deduction and moved to the Wmo (Social Support Act).
Still, it pays to read on, because the Tax and Customs Administration (Belastingdienst) does take an interest in three other places: in the way you pay for it, in the care costs that are still deductible, and in the question of who becomes the legal owner of the home. That last one is the most expensive pitfall, and it can be avoided with one visit to the notary.
We are a builder, not a tax adviser. What follows is meant to help you know which questions to ask; have your own situation assessed before you sign.
| Item | Deductible | Where it applies |
|---|---|---|
| Purchase of the home | No | No deduction, VAT cannot be reclaimed |
| Foundation and utility connections | No | Part of the investment |
| Home adaptations | No | Removed from the care costs deduction since 2014, now via the Wmo |
| Mortgage interest | Sometimes | Only with a genuine owner-occupied home loan, box 1 |
| The resident's care costs | Partly | Specific care costs, above the threshold |
| Travel costs for visiting someone who is ill | Sometimes | With a minimum distance and a household condition |
The mortgage interest
Interest is only deductible if the loan is an owner-occupied home loan (eigenwoningschuld). That term is narrow: it concerns the home that you yourself live in as your main residence. A home in the garden lived in by your father or mother is generally not your own home for tax purposes, and then the interest is not deductible in box 1 (the tax on income from work and home).
There is some room in the question of how self-contained the home is. If it is an extension of your own home that you use yourself, the situation is different from a separate living space with its own front door, its own kitchen and its own bathroom. That last description is exactly what a garden home is. Ask your adviser and your lender for a ruling before you finalise the financing, and have that ruling put on paper.
If you increase the mortgage on your own house to pay for the home, the repayment requirement for new owner-occupied home loans also applies: repayment on an annuity or linear basis within thirty years. What else is involved in financing is explained in can I finance a garden home with a mortgage.
Box 3
If the home does not fall under the owner-occupied home rules, it belongs to your assets in box 3 (the tax on savings and investments). That has two consequences you will want to take into account. The value counts towards the box 3 tax on assets (vermogensrendementsheffing), and higher assets can have knock-on effects on income-related schemes. What that means for allowances (toeslagen) is explained in does buying one affect allowances.
Who becomes the owner if your parent pays
This is the most important paragraph on this page. In many families the parent pays for the home, because that is where the savings or the surplus value (overwaarde) are. The home is placed on the child's land.
Legally, accession (natrekking) then applies: whatever is permanently attached to the ground becomes the property of the owner of the ground. So the parent pays, and the child becomes the owner. The Tax and Customs Administration can regard that as a gift, with gift tax as a result, and it comes up again later when an estate is divided between brothers and sisters.
The solution is well known and not expensive: have a right of superficies (recht van opstal) established at the notary. With it, the home remains the property of the person who pays for it, even though it stands on someone else's land. Record straight away what happens if the care stops, if the home is sold or if either party dies. What exactly the notary does here is explained in does the notary have a role in the purchase.
The alternative, a loan from parent to child with a written agreement and a commercial interest rate, also occurs. Which route fits depends on the family situation and on what is in a will. This is exactly the conversation for which you set aside an hour with an adviser.
Which care costs are deductible
The deduction for specific care costs still exists, just not for the home itself. What can fall under it, and what regularly comes up in an informal care situation:
- Medical and surgical treatment and prescribed medicines.
- Aids and appliances, with the exception of, among other things, glasses and contact lenses.
- Extra household help, provided you keep the invoices and proof of payment.
- Diet costs on prescription, with a diet statement.
- Extra clothing and bedding due to illness, through a fixed amount.
- Transport costs related to the illness.
There is also a deduction for visiting someone who is ill, for when the person visited belonged to your household at the start of the illness and a minimum distance is travelled. The Tax and Customs Administration uses a fixed amount per kilometre for this, set every year.
Two things determine whether it is of any use to you. There is a threshold that depends on your threshold income, so small amounts yield nothing. And for lower incomes and people receiving the AOW (the Dutch state pension), certain expenses may be increased by a factor, which can make the deduction worthwhile after all. So collect everything in one place for a full year before you conclude that it is not worth it.
An example where it goes wrong
Suppose mother sells her house and uses the proceeds to have a Zwaluw of €95,900 installed in her daughter's garden. Nobody goes to the notary, because it is family and it feels over the top.
What happens then: through accession, the home becomes the property of the daughter, while mother paid for it. For tax purposes, the question arises whether that is a gift. And if mother dies a few years later, the division of the estate involves a home on the plot of one of the children that was paid for by the deceased. That is the conversation nobody wants to have at such a moment.
With a right of superficies, the home would have remained mother's property, with a clear agreement about what happens on her death. The deed costs a few hundred euros and an afternoon. The alternative costs tax, and sometimes the relationship with a brother or sister.
The WOZ and the municipal tax assessment
An extra structure on your plot can increase the WOZ value (the municipal property valuation), and that value is the basis for the municipal property tax (onroerendezaakbelasting) and for part of the water board charges. So count on that as an annual cost, alongside the energy and maintenance costs of the home itself. How exactly that works out is explained in can a garden home affect the WOZ value.
If you charge your parent rent
That happens, for example to get the financing in place. Bear in mind that a rental arrangement within the family must be on commercial terms to avoid disputes, and that for you the home remains an asset in box 3. Whether your parent qualifies for rent benefit (huurtoeslag) depends on whether the home counts as self-contained accommodation and how it is registered. Check that before you count it as income.
If the care stops
The end also has a tax side, and it is simpler than the beginning. If you sell the home or the builder buys it back, the proceeds are not taxable income for a private individual; the home simply disappears from your assets in box 3. For the same reason, a loss compared with the purchase price is not deductible.
If the home stays in place with a different use, for example as guest accommodation or as a workspace, little changes for tax purposes as long as you do not rent it out, but a lot changes in planning terms. If you do start renting it out to a third party, both the box 3 question and the question of what the municipality allows it to be used for come back. What a home is still worth at that point is explained in how much residual value a garden home has.
Three things you can arrange now
- Sort out ownership before the home is in place. A right of superficies can be established afterwards, but by then you will already have had the conversation about the gift.
- Have the quote split. Keeping care facilities separate from the home makes both a Wmo application and a tax assessment easier. What the municipality can pay for is explained in are there subsidies.
- Keep everything. Invoices, proof of payment, the diet statement, the mileage records. Without proof there is no deduction, even if the costs were really incurred.
Once you know what is possible financially, do the permit check for your address and put what a garden home costs alongside it. Then you have the full picture before you sit down with your adviser.
Transfer tax and when it applies
| Situation | Transfer tax? |
|---|---|
| New movable home from a builder, delivered as movable property | No; VAT does apply |
| Second-hand home from a private seller, movable | No, and no VAT either |
| Establishing or transferring a right of superficies | Possibly; a limited right to immovable property counts |
| Buying a house with an immovable garden home included | Yes, on the whole |
| Buying land to place it on | Yes, on the land |
That question again: movable or immovable
You can see the pattern: this is the same question that determines who the owner is, whether you can take the home with you, which insurance fits and whether it goes along at the end of a leasehold (erfpacht). With taxes it comes back once again.
In short: immovable property is the land and everything permanently attached to it. Whether that is the case is assessed on what is visible from outside: the foundation, the utility connections, and whether the building, by its nature and design, is intended to remain in place. The fact that a home is technically movable does not automatically make it movable property.
If you want to keep the movable route open, the way it is built counts: a removable foundation instead of a poured slab, utility connections that can be disconnected, and no structural connection to your house. The full story is in movable or immovable property.
VAT or transfer tax, rarely both
The two taxes are designed so that they largely exclude each other. With new builds it is about VAT; with the transfer of existing property it is about transfer tax (overdrachtsbelasting). So the fact that you pay VAT on a new home is not an extra but simply the tax that belongs there.
What people sometimes expect is that something can be reclaimed. For a private individual that is not the case: VAT on a home for private use is not deductible. If you are self-employed or run a business and have a specific situation, put it to your own adviser.
With a right of superficies it is different
If you have a right of superficies established, for example because the resident pays for the home and it is placed in your garden, it concerns a limited right to immovable property. That is an acquisition that may be subject to transfer tax.
That is no reason to decide against a right of superficies; the protection it offers usually far outweighs the costs. It is, however, a reason to ask about it in advance at the notary who draws up the deed, so that you know what the total bill will be instead of hearing about it afterwards.
If you sell your house with the garden home included
This is where it comes up most often in practice. If you sell your house and the garden home stays in place, the question is whether it is part of what is being delivered.
If it is immovable, it belongs to the plot and the buyer pays transfer tax on the whole, including the value the garden home adds to it. If it is movable, it is a separate item: you can take it with you, sell it separately or include it separately in the sale.
In both cases, state this explicitly in the purchase agreement. "Does the garden home go with the house or not" is exactly the kind of point that causes trouble at the handover of the keys, and the estate agent will not automatically get it right.
Buying second-hand from a private seller
If you buy a used home from someone who no longer needs it, and it is movable, you pay no transfer tax and no VAT. A private individual does not charge VAT.
That makes second-hand attractive from a tax point of view. What you do need to pay attention to then is the structural condition and the paperwork; those questions are covered in second-hand garden homes.
Sources
- [Act] Wet inkomstenbelasting 2001 — art. 3.111 (own home), art. 3.119a (owner-occupied home loan) and section 6.5 (expenses for specific care costs) — accessed 2026-08-20
- [Act] Burgerlijk Wetboek Boek 5 — art. 5:20 (accession) and title 8 (right of superficies) — accessed 2026-08-20
- [Act] Successiewet 1956 — gift and inheritance tax between parents and children — accessed 2026-08-20
- [Act] Wet waardering onroerende zaken — art. 17 — valuation including buildings — accessed 2026-08-20
- [Explanation] Belastingdienst — deduction for specific care costs, threshold and increase factors — accessed 2026-08-20
- [Act] Wet op belastingen van rechtsverkeer — art. 2 — transfer tax on the acquisition of immovable property and of rights to which it is subject — accessed 2026-08-21
- [Act] Wet op de omzetbelasting 1968 — VAT on the supply of goods — accessed 2026-08-21
- [Act] Burgerlijk Wetboek Boek 3 — art. 3:3 — movable and immovable property — accessed 2026-08-21
