For Gusto Casa, 2019 was a really wonderful year. Our physical office at Amsterdamsestraatweg 184 in Utrecht opened on 25 January 2019. A living room where we drink bubbly after the deed has been signed. But also where, during a purchase meeting, we sit together next to the old-school map to see what's happening in which neighbourhoods.
Lots of great sales that we guided in our own way. Purchases found via Funda, but also via other channels, so we didn't have to stand in the living room with 20 other people. And we completed lots of valuations for purchases or for refinancing.
I look back on 2019 with a big smile. A year in which I also sold my own lovely little homes. The year in which I sold the house I live in now. But also the year in which my partner and I bought a new house together. The big renovation project isn't finished yet, but in 2020 I hope to be settled within walking distance of the office.
But what's going to change in 2020?
Changes in 2020
The NHG limit is going up
The purpose of the NHG guarantee (the Dutch National Mortgage Guarantee) is that you run less financial risk as a homeowner. If, in a forced sale of a home, you can't repay the full mortgage loan, the NHG guarantee ensures that the lender is fully compensated. At the moment the NHG limit is still a maximum purchase price of €290,000. In 2020 the maximum purchase price goes up to €310,000. If you have enough energy-saving measures, the mortgage and the NHG amount may be 106%. The NHG premium goes from 0.9% of the mortgage amount to 0.7%. That's another advantage.
Lower mortgage interest relief due to lower tax brackets
For middle incomes, the income tax bracket rate is the same as the percentage of mortgage interest relief. The system is going from four brackets to two, and a start was made on this in 2019. This year the number of brackets was reduced from four to three.
Originally, a two-bracket system was due in 2021. It has now been introduced earlier. From next year, 2020, two income tax brackets will already apply to people who haven't yet reached state pension (AOW) age.
Source: Business Insider
The maximum rate for mortgage interest relief is falling
The government is phasing out the tax advantage of mortgage interest relief. For higher incomes above 68 thousand, this has been going on for a few years. Below you can see how the maximum percentage of mortgage interest relief is being phased out.
As a high earner you could once deduct interest at a maximum of 52 percent; now it's 49 percent. In 2020 it will be 46 percent. In 2023 it will be only 37.05%.
Source: Business Insider
The notional rental value (eigenwoningforfait) is falling
The notional rental value is based on the WOZ value of homes, which is set by municipalities. The notional rental value is falling. But WOZ values are rising. On balance you may even end up paying more. One lucky thing with rising house prices is that the WOZ value is generally relatively low compared with the current market value.
Limit on the tax advantage with a low mortgage or none at all
The tax calculation for your own home consists of the sum of the notional rental value and the deductible mortgage interest. As long as you have more deductible interest than the amount of notional rental value you have to add to your income, mortgage interest relief gives you a tax advantage.
Wet Hillen (the Hillen Act): you don't have to pay notional rental value if you have little or no mortgage interest relief. This was a scheme to encourage people to pay off their mortgage debt.
But this is going to change. From 2019, the Wet Hillen is being phased out over 30 years by 3.3 percentage points a year. In 2020 it goes down to 93.34 percent.
Strange, isn't it? This way, paying off your own home doesn't really pay any more.
A partner's income counts for 80% in 2020
Couples with two incomes will be able to borrow more. When determining the housing cost ratio in 2020, the income of the lower-earning partner counts for 80%. In 2019 this was still 70%.
VvEs with solar panels can get a VAT exemption
As of 1 January 2020, the Dutch Tax Administration has amended the small businesses scheme (KOR). Now VvEs (owners' associations) can also be exempted from their VAT obligation if they install solar panels. This is possible if VvEs feed back less than €20,000 worth of energy.
VvEs do need to be careful when using the new KOR. If a VvE has deducted the VAT on the purchase, part of the previously deducted VAT may have to be paid back to the Tax Administration under the revision scheme. So a VvE has to calculate whether it pays to take part in the new KOR. In addition, once it takes part in the new KOR, the VvE can no longer deduct VAT on maintenance costs or other costs related to the solar panels. It's wise to have a tax adviser or accountant look into this.
Rent
Rent liberalisation threshold rises to €737.14 The rent liberalisation threshold will be raised to €737.14 in 2020. In 2019 it was set at €720.42.
Housing benefit threshold rises to €737.14 As of 2020, the housing benefit (huurtoeslag) threshold is €737.14. In 2019 the threshold was €720.42.
From 1 January 2020 there are no longer any income limits for housing benefit. How high your income may be to qualify for housing benefit depends on the amount of rent, the tenant's age and the composition of their household.
