Renting business premises as a freelancer: costs, VAT and the lease
Written by Ilias Aarrass6 min read · Published on · Last reviewed on 
In short
Rent for business premises is fully deductible, but VAT on rent only applies with taxed letting, which requires at least 90% VAT-taxed use.
- For a few designated sectors, including estate agents, travel agencies and occupational health services, the taxed-letting threshold is 70% instead of 90%.
- Retail and hospitality space has strong tenant protection with a default five plus five years; offices, practices and storage mainly follow the contract.
- The deposit is not a cost but a receivable on your balance sheet, returned at the end of the lease.
- Investing in rented premises means capitalising it as a tenant's investment and depreciating it, usually over the lease term.
Sooner or later many freelancers outgrow the kitchen table: the physiotherapist wants a treatment room, the web shop storage, the consultant an office where clients can sit down. Renting is the logical step, and a pleasant one for tax: unlike the workspace in your own home, rented premises outside the door are simply fully deductible. The points of attention sit in the VAT on rent and in the lease itself. This article walks through them.
The rent is fully deductible
Renting space for your business makes the rent, service charges, utilities, fit-out and cleaning all business costs that lower profit. A flex desk, salon chair, shared studio or the gym space you rent by the hour as a trainer counts too. If you invest in converting rented premises, think a pantry or partition walls, you capitalise that as a tenant's investment and depreciate it, usually over the lease term; see capitalise or deduct at once. If you renovate the space, different rules apply; see renovating rented premises.
VAT on rent: only with taxed letting
Property letting is VAT-exempt by default: you pay rent without VAT and there is nothing to reclaim. Landlord and tenant can jointly opt for taxed letting, adding 21% VAT that you deduct as a VAT entrepreneur. That is only allowed if you use the space at least 90% for VAT-taxed activities; for a few designated sectors, such as estate agents, travel agencies and occupational health services, 70% applies. For most freelancers with taxed revenue, taxed letting is neutral on balance and favourable for the landlord, so the option is standard in the lease. If you are exempt instead, for instance in healthcare, you cannot sign for taxed letting and the rent should go without VAT; the landlord sometimes charges slightly higher base rent to compensate.
The lease: retail and other business premises
Tenancy law knows two flavours of business premises. Retail and hospitality space carries strong tenant protection: a default five-plus-five-year term and firm termination rules. Offices, practices and storage are far freer: term and termination mostly follow the contract, with only eviction protection as a safety net. So know which regime you are signing, and also watch these points:
- Term and notice period: as a starter, prefer short with renewal options over long with penalty clauses.
- The deposit or bank guarantee, often three months' rent: not a cost but a receivable on the balance sheet; it returns at the end.
- Service charges and indexation: check what the service charges do and do not include and by what percentage rent rises annually.
- Subletting and transfer: may you sublet part to a fellow freelancer if space allows?
Worked example: the net cost of your own space
Thanks to the deduction, the net burden is lower than the rent suggests:
Worked example: practice space at € 750 a month
- Rent plus service charges per year
- € 9,000
- Deductible from profit
- € 9,000, in full
- Tax benefit at around 37%
- around € 3,330
- Net burden per month
- around € 470
Result: After the tax benefit the € 750 space costs about € 470 net a month; weigh that against the revenue and image a professional location brings
Frequently asked questions
Is renting better than keeping my workspace at home?
For tax, renting externally is nearly always simpler and more deductible than the home workspace, where deduction rarely succeeds. The real trade-off is business-driven: if you need the space for clients, staff or stock, a good location usually earns itself back.
Is the deposit deductible?
No. The deposit remains your money and sits as a receivable on the balance sheet until returned. If the landlord rightly withholds part for damage at the end, that part becomes a cost at that moment.
May I partly use rented premises privately?
Structural private use should not burden the business: that share of rent is not a business cost. With taxed letting, substantial private use can moreover endanger the 90% test for the VAT option. So keep the space business.
Sources
- Conditions for VAT-taxed lettingBelastingdienst · belastingdienst.nl
Sources checked on
This article provides general information based on the rules known for 2026 and does not replace personal tax advice. For your specific situation, we're happy to take a look with you.
