If you fit external wall insulation to a home that is older than two years, you charge 9% VAT on the labour for fitting the insulation. The insulation material itself is 21%. That is different from ordinary plastering, where the materials go along at 9%.
For the render on the insulation, the rules give no clear answer. Your customer can apply for the ISDE grant for wall insulation, € 20.25 per m² in 2026. That only works if your invoice contains the right details.
In short
- The labour for fitting wall insulation to a home older than two years is 9%, the insulation material is 21%.
- Whether the finishing coat on the insulation is 9% or 21% is not settled. Put it on a separate line and charge 21% until you are certain.
- For the ISDE, the invoice must show the m², the thickness, the Rd value, the type of material and the notification code.
In this article
- Which VAT rate applies to external wall insulation?
- Why is the insulation material 21% and your plaster material 9%?
- Does the render on the insulation fall under 9% or 21%?
- Which work in wall insulation is always 21%?
- How much ISDE does your customer get for wall insulation in 2026?
- What must your invoice show for the ISDE?
- Why does a complete invoice matter to your customer?
Which VAT rate applies to external wall insulation?
9% for the labour and 21% for the material, on a home that is older than two years. Table I lists fitting insulation material aimed at saving energy to floors, walls and roofs of homes. The materials are excluded (Decree on table I, Government Gazette 2025, 39463, item b 19).
External wall insulation is expressly included. The decree lists fitting insulation material to the inside or outside of the facade, and filling the cavity wall (Decree on table I, item b 19, part 2). The aim must be to make the home more energy efficient. Examples of insulation material are expanded polystyrene (EPS), stone wool, glass wool and PUR or PIR (Belastingdienst, VAT rate for insulating homes).
For what counts as a home and how you count the two years, the same rules apply as for plastering. The two years count from first use as a home, at the moment you do the work. You may have the client sign a statement that the home is older than two years (Decree on table I, item b 19, part 4). For new builds and business buildings everything is 21%.
Why is the insulation material 21% and your plaster material 9%?
Because the rule for insulation excludes the material. Item b 19 only covers the service, the fitting. The supply of the insulation material is not included (Decree on table I, item b 19, part 2). Plastering is different. There the materials used do fall under the reduced rate (Decree on table I, item b 8, part 6).
If you make insulation material in your own business, that is also 21%. The decree counts the costs of materials from your own production, including the labour, entirely as part of the supply of that material (Decree on table I, item b 19, part 2). The Belastingdienst says the same (Belastingdienst, VAT rate for insulating homes).
A wall insulation system consists of more than boards. There is adhesive or mortar to fix the boards, there are anchors, there is a reinforcement layer with mesh and a finishing coat goes on top. The decree does not give a rate for each of those parts. Only this is certain: the insulation boards are 21% and fitting them is 9%.
Does the render on the insulation fall under 9% or 21%?
That is not certain. The rules point both ways, and the Belastingdienst sources give no direct answer. The safe advice is: put the finishing coat on a separate line and charge 21%, until you have certainty from the Belastingdienst.
Item b 19 points to 21%. The decree says that finishing walls and ceilings after fitting insulation material does not fall under that item (Decree on table I, item b 19, part 3). So the reduced rate for insulation does not cover the finishing.
Item b 8 points to 9%. Plastering a home older than two years is 9%, with the materials. The decree counts decorative plaster and ready-mixed mortars as plastering and does not limit it to indoor work (Decree on table I, item b 8, part 5.3). How the two items work together for a wall insulation system is not stated.
Why 21% is the safe choice: if you charge 21% and 9% turns out to be allowed, your customer paid too much and you send a new invoice that corrects the old one. If you charge 9% and 21% turns out to apply, you pay the difference yourself. If it is more than € 1,000 in VAT, you correct it as soon as possible and no later than 8 weeks after you discovered the error. If the Belastingdienst finds the error first, you may get a fine (Belastingdienst, correcting a VAT return).
A private customer does notice the difference. On € 3,000 of finishing excluding VAT it makes € 360. If you want certainty, ask the Belastingdienst with a description of the wall system and its layers, and ask for a written answer. Keep that answer with your records.
Which work in wall insulation is always 21%?
Work that is too far removed from fitting insulation. The decree lists demolition beforehand, such as removing the old floor, the roof or the frames. Sun shading and a dormer are not included either (Decree on table I, item b 19, part 3).
Complete prefabricated facade elements with frames, windows and doors are 21%, including the labour for fitting them. Insulating facade elements without windows and doors, fitted against an existing facade, are 9% for the labour (Decree on table I, item b 19, part 2).
For a renovation, extension or addition to a home you may split. The labour for fitting insulation is 9%, the rest of the work is 21% (Decree on table I, item b 19, part 3). Replacing an existing frame to fit insulating glass does not fall under 9% (Decree on table I, item b 19, part 2).
How much ISDE does your customer get for wall insulation in 2026?
€ 20.25 per m² for wall insulation fitted in 2025 or later. The ISDE, the Dutch investment grant for sustainable energy and energy saving, applies to at least 10 m² and at most 170 m² of facade. With biobased insulation material, which is made in an environmentally friendly way and is easy to recycle, € 6 per m² is added (RVO, ISDE insulation measures). The amount is also in the regulation itself (Regeling nationale EZ-, LVVN- en KGG-subsidies, article 4.5.4).
The new insulation material must have an Rd value of at least 3.5 m²K/W. The Rd value is the thermal resistance of the material: the higher, the better it insulates. Existing insulation does not count (RVO, ISDE insulation measures). Under the regulation it may be the inside or the outside of the facade (Regeling nationale EZ-, LVVN- en KGG-subsidies, article 4.5.2).
The amount doubles if the customer has more than one insulation measure carried out within 24 months, or combines insulation with a heat pump, solar water heater or connection to a heat network. The bonus for biobased material does not double (RVO, ISDE insulation measures).
The ISDE for insulation is for owner-occupiers: the customer owns the home and lives in it (RVO, ISDE for homeowners). The home must have been built before 1 January 2019, or the planning permit must have been applied for before 1 July 2018 (RVO, ISDE insulation measures). That requirement is separate from the two-year rule for VAT.
A few conditions affect your work directly. All the insulation work must be done by a construction firm, the customer may not insulate themselves. Insulation of a new extension, or of a part that is demolished and rebuilt, gets no grant. The customer only applies for the ISDE after the work, and within 24 months at the latest (RVO, ISDE insulation measures).
From 2027 the ISDE changes on a number of points. The proposed changes RVO lists in October 2026 include no change for wall insulation. RVO will update that list once the changes are final (RVO, ISDE: what changes from 2027?).
What must your invoice show for the ISDE?
The number of m², the thickness, the thermal resistance and the type of insulation material you fitted. RVO asks the customer to have the contractor put those details on the invoice. The invoice and proof of payment must also show the date of installation, the amount and the date of payment (RVO, ISDE insulation measures).
Also put the notification code of the insulation material on the invoice. That is the code under which an approved product is on RVO's notification code list. Check before buying whether the material is on that list (RVO, ISDE insulation measures). RVO advises the customer to have the notification code put in the quote as well (RVO, ISDE for homeowners).
State your business address, and the name and telephone number of a contact person. If you also insulate a part that gets no grant, such as a new extension, show it separately on the invoice. The customer must also send in a photo that clearly shows the home and the work (RVO, ISDE insulation measures).
For VAT the normal invoice requirements apply. If you supply at different rates, you show the separate amounts and the rate that applies (Belastingdienst, invoice requirements). Put the labour at 9%, the insulation boards at 21% and the finishing coat on separate lines.
Why does a complete invoice matter to your customer?
Because hassle is a reason not to make a home more sustainable. Researchers at TU Delft analysed national survey data on Dutch homeowners who made their home more energy efficient or considered doing so. The biggest barriers were the costs, the complicated process, lack of information and finding reliable experts and information (Ebrahimigharehbaghi, Qian, Meijer & Visscher, 2019).
According to the same research, policy should among other things reduce the complexity and the time needed to obtain loans and subsidies. An invoice that shows everything RVO asks for removes part of that hassle. That is a translation into practice, the research did not measure it itself.
The grant does not change the VAT rate. Even with ISDE, the labour stays 9% and the insulation material 21%. Do not deduct the ISDE from your price either. The customer applies for it themselves, only after the work, and RVO aims to decide within 8 weeks (RVO, ISDE for homeowners).
Sources
- State Secretary for Finance, Decree on VAT explaining table I (Besluit omzetbelasting toelichting tabel I), 22 December 2025, no. 2025-30110, Government Gazette 2025, 39463, items b 8 and b 19. officielebekendmakingen.nl
- Belastingdienst, VAT rate for insulating homes, accessed 28 October 2026. belastingdienst.nl
- Belastingdienst, Correcting a VAT return, accessed 28 October 2026. belastingdienst.nl
- Belastingdienst, Invoice requirements, accessed 28 October 2026. belastingdienst.nl
- RVO, ISDE: insulation measures for homeowners, checked by RVO on 17 September 2026, accessed 28 October 2026. rvo.nl
- Regeling nationale EZ-, LVVN- en KGG-subsidies (national subsidies regulation), articles 4.5.2 and 4.5.4, in force from 1 January 2026. wetten.overheid.nl
- RVO, ISDE: grant for making your home more sustainable, checked by RVO on 15 October 2026, accessed 28 October 2026. rvo.nl
- RVO, ISDE: what changes from 2027?, checked by RVO on 23 October 2026, accessed 28 October 2026. rvo.nl
- Ebrahimigharehbaghi, S., Qian, Q.K., Meijer, F.M. & Visscher, H.J. (2019). Unravelling Dutch homeowners' behaviour towards energy efficiency renovations: What drives and hinders their decision-making? Energy Policy, 129, 546-561. doi.org