If the own dwelling is being put at the disposal of a third party during an assignment period, it is not considered as an “own dwelling” for Dutch personal income tax purposes. The dwelling will then shift to tax box III, as a result of which mortgage interest wil no longer be tax deductible.
However, the Dutch Supreme Court has decided that such dwelling still will be considered as an “own dwelling”, provided that it has been agreed with the occupant that he or she will prevent squatting of the dwelling, that no compensation is due except for a limited contribution for energy costs and that he or she will leave the dwelling as soon as the owner considers this necessary.
The above is also applicable if the occupant is a child of the owner. For children who belong to the household of the owner, other possibilities may apply as well.
