Tax ministry inspectors and the police have raided the offices of one of the Netherlands biggest short stay housing agencies following a tip-off from the tax authorities, the Volkskrant said on Thursday.

In addition, three people working for the Holland2Stay group were arrested on suspicion of fraud involving rental contracts, allowing landlords to avoid value-added tax, the paper said. The raids in Eindhoven and Den Bosch took place at the beginning of April.

According to the Volkskrant, the alleged fraud is based giving successive short contracts to the same person, allowing the landlord to claim back more btw.

Landlords can charge 9% (was 6%) value-added tax over the rent for short term furnished accommodation. And if they have converted a former office block into short stay apartments, they can deduct the 21% on the cost of building work from their rental income. But this is only possible if the rental contract is for less than six months.

Holland2Stay founder Zjef Bogers told the Volkskrant the company had not been involved in falsifying rental contracts. ‘Why would we?,’ he said. ‘We are a housing agency, and don’t collect the btw. We are completely independent.’

The tax office estimates the scam has cost it €350,000 in lost btw. The Volkskrant said the identity of the property owner has not yet been made public, but the building or buildings concerned are said to be in the south of the country.

Holland2Stay, which was founded 11 years ago, now operates more than 2,000 apartments in the Eindhoven region to international students and workers on short-term contracts. It also offers homes in other cities, including Rotterdam, Delft and Amsterdam, the paper said.