Tax advantages of professional property management – why working with a Rotterdam letting agent pays off

Many private landlords wonder: “Do I get a tax benefit if my properties are managed by a letting agent?”
The short answer: not directly in euros, but there is a long-term tax advantage. Below we explain it step by step in plain language.

Box 3 or Box 1: the big difference for landlords

Box 3 – passive investing
You hold property as an investment and let your money work for you. The tax authorities look at the value of your assets (WOZ value minus debts), not at your actual income or expenses.

• You pay tax on a deemed return (in 2025: 6.17%) at a rate of 32%.
• Costs are not deductible (so neither agent fees nor maintenance).

Box 1 – active property management
Are you actively involved in letting for example by finding tenants yourself, carrying out renovations to raise the rent, actively negotiating and managing? Then the tax authorities may decide you are engaging in entrepreneurial activity.

• You then pay tax on your actual profit, and costs are deductible (management, maintenance, agent fees).
• Downside: the tax burden is often higher, because this counts as regular income.

Why professional management helps you stay in Box 3

If you have your properties managed by a professional letting agency such as Rotterdam Rental Service, you demonstrate that you are not executing the letting activities yourself.

• You set the strategy and receive the rent.
• We handle daily operations (tenants, maintenance, administration).

The important consequence: the tax authorities will view you as a passive investor rather than an active entrepreneur. As a result, you remain in Box 3, which is fiscally the most advantageous in most cases.

No direct deduction, but indirect benefits

It’s true that management fees are not directly deductible in Box 3. Still, professional management provides indirect financial benefits that often outweigh that deduction:

• Less vacancy – Faster letting to reliable tenants, often expats or professionals with stable income.
• Lower risks – Less chance of rent arrears, incorrect contracts, or permit issues.
• Value preservation – Good maintenance and stable occupancy support value development (relevant for WOZ and net worth).
• Clear tax position – Outsourcing shows you are not an “entrepreneurial landlord,” which helps during tax audits.

Practical example

Suppose you own 10 apartments in Rotterdam with a combined WOZ value of €3 million. The properties are managed by Rotterdam Rental Service, which handles tenants, contracts, maintenance, and inspections.

• You hardly have to do anything, you receive the rent, and you pay a monthly management fee.
• The tax authorities will generally assess this as a passive investment.
• You therefore remain in Box 3 (deemed return) rather than Box 1 (income tax on profit).
  This difference can add up to tens or even hundreds of thousands of euros over multiple years, depending on your portfolio and rates.

Conclusion

You don’t receive a direct tax benefit by handing management to an agent, but you do gain a substantial long-term advantage: you increase the likelihood of staying in Box 3, often pay less tax, and avoid being classified as an entrepreneur. On top of that, professional management provides peace of mind, certainty, and a more stable return on your property.

Want to know what professional management delivers for you fiscally and practically?
Request no-obligation advice at www.rotterdamrentalservice.com or email info@rotterdamrentalservice.com.

Also read: Tax changes for landlords in 2025 – what does this mean for your return?