Tax structure

The asset class and method of investment are prime considerations in tax planning. Investors can, for example, choose between investing directly in property, which means that they become the owners of the property in question, and indirect investment by buying shares – either listed or unlisted – in an investment trust or fund that itself is the owner of the property in question.

Limited property partnership

A common example of the latter entity is a limited property partnership (vastgoed cv). This is an investment fund that rents out property on behalf of a number of investors with the ultimate aim of selling it off at a set date, i.e. at the end of the fund’s life. The rent and the proceeds from the sale of the property are distributed among the investors after the deduction of costs.


As a ‘limited partner’, an investor in a limited property partnership is required to contribute a certain amount of capital to the partnership. His or her risk is limited to the value of this investment. For tax purposes, investments in limited property partnerships are treated as capital income and are therefore liable to tax in the Netherlands as ‘Box 3 income’. It is worth bearing in mind that not all sellers of property investments are supervised by the Netherlands Authority for the Financial Markets (AFM); nor are they all registered with the Dutch central bank.

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