Box 3 vs Box 1 for landlords: where does your letting fall?

For most private landlords a rental property falls into box 3: you are taxed on a forfaitary return on your wealth. But once you do more than "normal asset management", the rental can shift to box 1 — taxed as income at a higher progressive rate, but then with deductible costs.

The test: normal asset management

The core is the amount and nature of your labour. Buying a property, letting it and collecting rent is normal asset management (box 3). If you structurally do more — actively managing, renovating, providing services — the tax office may argue your labour aims at a return that exceeds normal asset management (box 1).

Indicators pointing to box 1

• You carry out major renovations or maintenance yourself.
• You actively manage: marketing, screening, bookings.
• You offer extra services (breakfast, cleaning during the stay).
• Most of your income comes from short-term lets.
• Your own labour exceeds the capital invested.
• You let many properties or mainly to businesses.

If the properties are held in a BV (holding company), corporate tax applies instead of box 3 or box 1.

Run the check

Why it matters

In box 3 you pay on a forfaitary return, regardless of your actual profit. In box 1 you pay on your actual result (rent minus costs), at a higher rate, but losses and depreciation can count. Which box is more favourable depends on your financing, costs and activity.

Note: the line between box 3 and box 1 depends heavily on your specific situation and case law. This check is indicative, not tax advice — confirm with a tax advisor.