Every real estate transaction, from acquisition to exploitation to disposal, raises a VAT question. Whether that VAT is deductible has direct financial consequences for businesses, institutions, and ultimately for prices and investment decisions. Yet the legislation governing this falls short in essential respects. "Clarity costs less than ambiguity. And good rules pay for themselves," says Nino Arzini, PhD candidate at Erasmus School of Law.
On 5 February 2026, he defended his thesis VAT Deduction on Real Estate-Related Costs. Under the supervision of Madeleine Merkx, Professor of Indirect Taxation, and Martijn Albers, Assistant Professor of Tax Law, both affiliated with Erasmus School of Law, he examined how VAT deduction operates across all phases of the real estate lifecycle: acquisition, exploitation and disposal. And the extent to which current European and Dutch legislation aligns with the legal character of VAT.
A system more complex than necessary
"Current law does not always align well with what VAT, as a consumption tax, is designed to do, and the quality of the legislation falls short in important respects," is the central conclusion of Arzini's research. This leads to unnecessary uncertainty and inefficiency, for businesses making daily decisions about VAT deduction on real estate costs, for advisors who guide them, and for judges and policymakers who must apply and enforce the system.
Arzini's research combines a positive law analysis, a rigorous examination of EU directives, national legislation, case law and policy, with a normative framework for systematically assessing the quality of laws and regulations.
Phase by phase through the real estate lifecycle
Arzini's research adopts a phase-based approach. By structuring the VAT deduction assessment along the three phases of the real estate lifecycle, acquisition, exploitation and disposal, he maps where the bottlenecks lie and how they interrelate. This produces a practical instrument: advisors and institutions can apply the framework to concrete questions, while judges and policymakers can use it in the assessment and development of legislation.
The recommendations that follow from the research are both substantive and redactional. On the substantive side, the focus is on better alignment with the legal character of VAT; on the drafting side, on legislation that is clearer and more consistently structured. "The research makes clear that there is a concrete responsibility for legislators, regulators and policymakers to implement these improvements," says Arzini.
Real estate case law continues to evolve
Case law on real estate is constantly developing, partly because existing legislation leaves room for diverging interpretations. Arzini's research offers a structural framework for organising that debate, not as a temporary fix, but as a foundation for lasting improvement of the system.
Arzini identifies three areas for further research: continued substantive improvement of existing law, drafting revisions to existing legislation, and fiscal-economic research into how real estate can most consistently be incorporated into a consumption tax such as VAT. The core message remains the same: "VAT on real estate has an enormous societal impact. Much of the current uncertainty in practice is unnecessary. Good rules pay for themselves," Arzini concludes.
- PhD student
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Meer over the thesis ‘VAT Deduction on Real Estate-Related Costs. [Dutch: Aftrek van btw op vastgoedgerelateerde kosten’]
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