Publish Date

Feb 28, 2023

Abolishment of the Dutch RETT Exemption for the Acquisition of Shares in a Company Owning Newly Built Real Estate

Special Tax Alert

On 27 February 2023, the Dutch Ministry of Finance launched a public consultation on a legislative proposal to abolish the real estate transfer tax (RETT) exemption for the acquisition of shares in companies that own “newly built” real estate. If adopted, this will mainly impact (institutional) investors in residential real estate and investors that lease out to financial institutions and healthcare providers. However, ultimately all acquisitions of shares in companies that own newly built real estate will be impacted and would no longer be eligible for this RETT exemption. This abolishment would therefore also impact the acquisition of shares in companies that own “newly built” commercial real estate, including acquisitions of “building plots” through share deals (e.g., in forward funding transactions). The current RETT rate is 10.4% for investment property.


The reason for the public consultation is that the Dutch Ministry of Finance wants to improve the level playing field between direct and indirect acquisitions of newly built real estate. To put this into perspective:

  • Asset deal – When newly built real estate is transferred via an asset deal, such transfer is by law mandatorily subject to Dutch VAT at a rate of 21% and exempt from RETT (currently at a rate of 10.4% for investment property). The lack of RETT is the result of a RETT exemption that aims to mitigate cumulation of RETT and VAT. If the acquiring investor subsequently leases out the real estate in a VAT taxable manner, the input VAT on the acquisition can generally be recovered.
  • Share deal – Investors that lease out the acquired real estate in a VAT exempt manner (e.g., the lease of residential property or property leased out to companies that perform VAT exempt activities such as pension funds, health care institutions, banks and insurance companies), cannot recover the input VAT on the acquisition. For such investors, it can be beneficial to acquire the newly built real estate through a share deal. In such case, no VAT is due as a transfer of shares is exempt from VAT. Under current RETT law, such transfer is also exempt from RETT by virtue of the same exemption for asset deals as it allows for a look-through the company that owns the newly built real estate.


The public consultation concludes that the Dutch tax authorities cannot combat this VAT-saving structure from a VAT perspective, which is why it has now been decided to combat it by excluding certain qualifying share acquisitions from the RETT exemption for transfers of newly built real estate. As a result, such share acquisitions would become subject to RETT at 10.4%.

This exclusion would apply to share acquisitions in so-called real estate companies for Dutch RETT purposes when an interest of at least one-third is acquired. In addition, the extension of the RETT exemption to similar acquisitions in partnerships through an approval in a policy note will be abolished.

The legislative proposal is intended to become effective per 1 January 2024 and no transitional rules are proposed. Feedback on the public consultation can be provided until 27 March 2023.


The VAT and RETT treatment of a real estate project can have a significant impact on its commercial feasibility. The cancellation of the RETT exemption will in principle impact all share deal transactions of real estate companies that own newly built real estate. The impact is therefore wider than the situations it intends to combat.

If you would like to receive more information or discuss the impact, please feel free to get in touch with your usual A&M adviser, Roel de VriesTim Jansen or Nick Crama.

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