Transfer tax rises to 10.4%

Dian de Leeuw-den Hoed |  28 September 2022  |  Reading time: approx. 2 minutes

The transfer tax will be increased from 8% to 10.4% on and from 1 January 2023. The government announced this on the state opening of parliament. The reduced rate (2%) on owner-occupation will remain the same, the limit value for the exemption from transfer tax will be increased to €440,000 (currently €400,000). What about the conditions for the reduced rate and the exemption from transfer tax? This article presents an overview.

If an immovable property (residence or business premises) is transferred, the buyer owes transfer tax on its transfer. The notary’s completion statement and the deed of transfer state the applicable rate and the amount payable.

The transfer tax is calculated on the value of the immovable property. If the consideration (purchase price) is higher, the tax is calculated on that higher amount.

The basic rate is currently 8%. This base rate will be increased to 10.4% on and from 1 January 2023.

Reduced rate

In addition to the basic rate, a reduced rate (2%) has been set. The reduced rate will remain the same in 2023. The following conditions must be met for the reduced rate to apply:

• the acquirer is a natural person (i.e. a personal holding company does not meet this requirement);
• the immovable property is a residence;
• the acquirer will use the property as his/her main residence for a longer period of time (‘other than temporarily’);
• the acquirer declares in writing prior to the acquisition that the property will be used as his/her main residence.

The Tax and Customs Administration checks whether the property has indeed been taken into use as a main residence. If you first renovate the residence and only move into the residence after the renovation, the reduced rate can also be claimed. However, if you buy a holiday home or house for (studying) children, you do not meet the main residence criterion and the basic rate applies.

If the reduced rate applies when you buy your residence, then this rate also applies to appurtenances (such as a garage) that you acquire at the same time as the residence. If you purchase a garage later, the basic rate will apply to that acquisition.

Are you buying a residence that you will live in yourself, but part of which will be rented out to others? Then the low rate only applies to the part you will live in yourself. The basic rate applies to the part of the residence that will be rented out.

Exemption from transfer tax

In an attempt to improve the position of first-time buyers on the housing market, the exemption from transfer tax was introduced in 2021. This means that no transfer tax needs to be paid if the following conditions are met:

• the immovable property is a residence;
• the acquirer is a natural person, aged between 18 and 35 years;
• the acquirer has not applied the exemption before (and declares this in writing);
• the value of the residence does not exceed €400,000. This limit value will be increased to €440,000 on and from 1 January 2023.

Pay attention when acquiring a right of ground lease! For the value of the residence, the value of the ground rent that was not (fully) bought out will then also be taken into account. Due to this calculation, the value may still exceed the limit amount, so that the exemption no longer applies.

When buying an apartment right, the value of the residence may actually be lower. You will then obtain a share in the reserve fund of the Owners’ Association. This share may be deducted from the value of the residence.

Are you buying the residence jointly? Then it will be determined separately for each buyer whether the reduced rate or the exemption from transfer tax applies.

Do you have any questions? In that case, please contact Dian de Leeuw-den Hoed.

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