You can hardly have missed them: the changes to transfer tax (overdrachtsbelasting). Investors and first-time buyers have more and more questions. Are the transfer tax exemption for first-time buyers and the higher transfer tax for investors really that good for the housing market? Or can investors simply carry on investing in homes? We at Gusto Casa have our opinion on this, so read on!
Contents
- Transfer tax 2021
- The benefit for first-time buyers
- More pressure on the housing market for first-time buyers
- Tricks
- The right moment to sell your apartment or investment property
Transfer tax 2021
Most of you will have seen that transfer tax is being overhauled from 1 January 2021. With this, the cabinet wants to give first-time buyers priority on the housing market. But will the cabinet achieve this with these new rules? Below, first, an overview of when you actually qualify for the transfer tax exemption. As you can see, you don't necessarily have to be buying your first home; you may use this tax benefit once.
Source: Rijksoverheid (Dutch central government)
As you can see in the image above, transfer tax on investment property will go up to 8%. Below is an example of the impact.
Transfer tax for first-time buyers under 35
Lisa (28) and Jaap (33) currently live together in a home they own. They would like to move to a bigger home. They have bought a home for €450,000. If the transfer still takes place this year, they will have to pay 2% transfer tax, namely €9,000. If the transfer is on 1 January 2020 and they have not yet used the benefit above, Lisa and Jaap won't have to pay transfer tax. So that saves them €9,000. That is definitely worth it. You can play with the transfer date to get the biggest possible benefit.
If one of the two is older than 36, the sum looks different. If Lisa is 31, she is under 35. So she doesn't have to pay transfer tax. Jaap is 36 and so does have to pay transfer tax. The sum then looks like this: €450,000 / 2 = €225,000, and 2% transfer tax on that is €4,500.
The benefit for first-time buyers
Do first-time buyers actually gain anything from this benefit? We notice that investors are now trying en masse to buy a home with a handover date before 31 December 2020. This is putting huge pressure on house prices in the category up to €300,000. Investors know they will have to pay more transfer tax in January 2021. They are already factoring this in. They are largely compensating for it in the purchase price they pay for a home. As a result, demand for relatively maintenance-free apartments that are easy to let has increased. These are also the homes that are particularly suitable for first-time buyers.
More pressure on the housing market for first-time buyers
Of course, there are investors who will miss the boat. But interest rates are so low at the moment that we don't expect 8% transfer tax to keep investors away from the housing market. The most obvious scenario is that the transfer tax will be passed on to tenants. Our view, then, is that this measure will create enormous pressure until the end of the year in the price category up to about €300,000. And yes, indeed, this is precisely the category in which many first-time buyers are searching.
Tricks
There is a trick to still benefit from the 2% transfer tax before the end of the year, even if your financing isn't finalised yet. You can use a Groninger Akte (Groningen deed). The Groninger Akte is a construction in which the property is transferred, but the purchase price has not yet been paid.
In this situation, the buyer obtains economic and legal ownership. But the buyer has not yet paid the purchase price. The dissolving or suspensive conditions included in the purchase agreement also still apply. The Groninger Akte then includes a final date by which you, as the buyer, must pay the purchase price. By then, the dissolving conditions must also have lapsed.
Has the buyer still not paid you, the seller, the purchase price on that date? Or is one of the dissolving conditions met? Then you can dissolve the transfer. Ownership then goes back to you as the seller. The transfer tax will already have been paid, though. A request for a refund of the transfer tax can then be made. This is only possible if the actual condition of the home has stayed the same. So not with a transformation property.
Has the purchase price been paid and have all the dissolving conditions lapsed? Then a supplementary deed can be signed. This states that the buyers are discharged for the purchase price and that all conditions have lapsed. After that, there is no going back.
The right moment to sell your apartment or investment property
We keep hearing that a housing crisis is coming. Are you in two minds about selling your investment property? Let us know. The proceeds will probably be highest before the end of the year. Would you like to quickly buy an investment property before the end of the year, or would you like to sell one? Then we at Gusto Casa would be happy to help you!
