Change in real estate transfer tax rate
Ahead of the budget announcement on Budget Day 2020 (Prinsjesdag) it seems that some proposals were already leaked. According to sources cited in a number of Dutch media the real estate transfer tax (RETT) rates and system are announced to be amended as part of the Tax Plan 2021 (Belastingplan 2021).
Firstly, the default RETT rate is set to be increased from 6% to 8%. Based on current legislation the increase would be 7% as per 1 January 2021. Secondly, the lower 2% rate for residential real estate would only apply to people who use the house or apartment to live there themselves. This is an important point to monitor, as this would mean that investors acquiring residential real estate would likely fall in the higher 8% RETT bracket instead of the 2% under current rules.
It is yet unclear when the rates will be increased. We expect as per 1 January 2021, but we cannot rule out that it will per as per 1 January 2022 (the increase of the rate to 7% was decided on in 2019). These changes are intended to provide people with more opportunities to buy a house, especially because there has been a lot of speculation on the Dutch housing market (both by individuals, as well as institutional parties). This resulted in owner-occupied housing becoming leased-out housing, thereby reducing opportunities to buy a house. As a further measure, people between ages 18-35 should qualify for a 0% RETT rate instead of this 2% RETT rate when buying a house to live there themselves. Whether this will be restricted in some way (either to first-time buyers, or capped at a maximum acquisition price) is not clear. This would however not affect investors directly but it may affect pricing of housing in that part of the housing market.
The aforementioned measures have not been confirmed by the government. It is, therefore, yet uncertain whether these changes in RETT rates will be implemented. This should become clear on Budget Day.