General transfer tax rate increased

The Dutch housing market is not functioning the way the government would like to see. One of the main complaints is that first-time buyers are having a difficult time getting onto the property ladder. The reason for this is believed to be the fact that many homes are held as ‘investments’. As a result, first-time buyers’ only option is to rent a home, making it more difficult for them to accumulate capital.

In recent years, the transfer tax has shown that the government is taking measures, one step at a time, to achieve reform.

Transfer tax rate increased

Since 1 January 2021, only buyers who will use their purchased home to live in can enjoy the low rate of 2 per cent for homes. At the same time, the general rate was raised from 6 per cent to 8 per cent. As a consequence, therefore, property investors were hit four times over. An increase of the general rate from 8 per cent to 9 per cent was subsequently agreed in the coalition agreement. The 2 per cent rate would remain in place for owner-occupiers.

From 1 January 2023, unlike the 9 per cent in the coalition agreement, the general rate will be increased to 10.4 per cent. The 2 per cent rate will remain unchanged.

Consider transferring your business premises to the private company

Entrepreneurs who, for example, are considering transferring to the private company their business premises they have let to that company may have a good reason to act now. Bringing forward the transfer is also a good idea in other situations in which a sale might soon be on the agenda!

The increase in transfer tax is going to play a more defining role in advisory on let property and development property, especially in ownership transfers in property structurings.