Netherlands to Raise VAT on Short-Stay Accommodation: Why This Matters

The Dutch government has announced a significant fiscal change that will impact the short-stay accommodation sector. Effective January 1, 2026, the VAT rate on short-stay accommodation will rise from 9% to 21%. The adjustment is intended to boost tax revenue and help close a national budget gap. For organizations relocating employees to the Netherlands, this change will have clear cost implications and should be factored into housing budgets and mobility planning.

What’s Changing

Starting January 1, 2026, the Netherlands will implement a major fiscal adjustment by increasing the VAT rate on short-stay accommodation from 9% to 21%. This change applies to hotels, holiday homes, B&Bs, guesthouses, hostels, furnished mobile homes, and short-stay rentals booked through platforms such as Airbnb. Camping accommodations will remain at the current 9% VAT rate.

It's important to note that VAT will be applied based on the stay date, not booking date. As a result, reservations made before January 1, 2026, for stays occurring after that date will still incur the 21% VAT rate. This adjustment forms part of a broader effort to simplify the tax system by reducing exemptions while increasing overall revenue.

Why This Matters

The VAT increase is expected to generate approximately €1.2–€2 billion annually, supporting the government’s efforts to streamline fiscal policy and address the national budget gap. For businesses and transferees, however, the most immediate impact will be higher accommodation costs. 

Accommodation providers are expected to increase rates by an estimated 5–11%, rather than passing on the full 12% VAT increase, in order to maintain occupancy levels. Even so, the change may influence demand, particularly among leisure travelers and more cost-conscious segments, and could create competitive pressure in border regions where neighboring countries maintain lower VAT rates. Organizations managing employee relocations should anticipate these cost increases and incorporate them into housing budgets and forecasting models.

Considerations for Assignments Near Border Regions

While the Netherlands will move to a 21% VAT rate on short-stay accommodation, neighboring countries continue to apply significantly lower rates - for example, Germany at 7% and Belgium at 6% for comparable hotel and short-stay categories.

For relocations located near national borders, this difference may create potential cost advantages if the transferee’s work location and commuting patterns allow for cross-border temporary housing. Although this approach will not be feasible for most assignments, mobility leaders supporting high-volume moves or border-region placements may want to assess whether practical alternatives exist within a reasonable commuting distance.

Actionable Steps for Companies

Review Relocation Policies

• Update housing allowances to reflect higher accommodation costs.
• Include VAT considerations in cost projections for temporary housing.

Budget Forecasting

• Model scenarios for short-term stays (30–90 days) and extended assignments. 
• Factor in VAT for advance bookings made in late 2025 for stays occurring in 2026.

Supplier Engagement

• Negotiate corporate rates with hotels and serviced apartment providers. 
• Explore alternative housing solutions, such as long-term rentals that may fall outside short-stay VAT rules.

Communication

• Inform transferees about potential cost increases and reimbursement policies.
• Provide guidance on booking timelines to minimize VAT exposure.

Tax Considerations

• Discuss potential VAT reclamation pathways with your mobility partners to determine whether any portions of temporary accommodation VAT may be recoverable under your company’s tax profile and to ensure billing structures are optimized to avoid unnecessary VAT leakage.

Actionable Steps for Transferees

• Plan Ahead: Book accommodation early, but note that VAT applies based on stay date, not booking date.
• Explore Alternatives: Consider long-term rentals or housing outside major cities to reduce costs.
• Understand Reimbursement: Clarify which accommodation costs are covered under your employer’s updated relocation policy.

Looking Ahead

The increase to a 21% VAT rate represents a notable shift in the Dutch short-stay accommodation market and signals a broader tightening of fiscal policy. For organizations supporting employee mobility, the change underscores the importance of early planning, accurate cost forecasting, and clear communication with both suppliers and transferees.

By reviewing policies, updating budgets, and engaging accommodation providers well in advance, employers can better manage rising costs and reduce disruption. Proactive preparation will help ensure mobility programs remain cost-effective while continuing to deliver a smooth and transparent relocation experience as the 2026 changes take effect.