Notional Rental Value

Taxing the Benefit of Ownership

The huurwaardeforfait is an old term in Dutch tax law that, while no longer in official use, represents a core principle that still exists today. It was a 'notional' or 'imputed' rental value—a fixed-sum amount (forfait) that was added to a homeowner's taxable income. The underlying logic was that owning and living in your own home provides a form of economic benefit equivalent to rent-free living. To create a measure of tax equity between renters (who pay rent from taxed income) and owners (who do not), the tax system 'imputed' this rental value as a form of taxable income for the homeowner. This additional income was, however, typically offset by the homeowner's ability to deduct mortgage interest payments.

The Modern Successor: 'Eigenwoningforfait'

With the overhaul of the tax system in 2001, the term huurwaardeforfait was officially replaced by eigenwoningforfait. While the name changed, the concept remains identical. The eigenwoningforfait is a percentage of the property's official WOZ-waarde that is added to the owner-occupier's taxable income in Box 1 each year. This entire mechanism is exclusively a concern for homeowners and has no direct application to tenants. However, it is a central element in the ongoing political and economic discussions about the financial advantages and disadvantages of owning versus renting in the Netherlands, forming one side of the equation balanced against the highly debated mortgage interest deduction (hypotheekrenteaftrek).