Change in tax rules clearly noticeable on the housing market

Photo: ANP

The changed tax rules as of 1 January 2021 are clearly noticeable in the housing market figures. For example, the number of first-time buyers on the housing market has risen for the first time in years, the Land Registry reports. But the agency also says that the comparison between the closing quarter of 2021 and the end of 2020 is flawed. This is because of the tax benefit that applied to starters up to 35 years old as of 1 January last year. As a result, many first-time buyers postponed their buying ambitions until the new year.

As of 1 January, the transfer tax for first-time buyers on the housing market was abolished. A rate of 2 percent normally applies to immovable property. Incidentally, the start-up measure also applied to transfer students up to the age of 35. In this group, the number of transactions on an annual basis was lower than a year earlier. According to the Land Registry, this may be because the transferees were not aware that they were also entitled to the tax benefit. Another factor is that, due to the current market conditions, they first waited until their own home had been sold before buying a new home.

In the closing quarter of 2021, 16,500 first-time buyers up to the age of 35 were involved. In the last quarter of 2020 there were approximately 11,200. In the first quarter of 2021, there was a catch-up when 24,700 first-time buyers up to the age of 35 were registered.

The Land Registry also reports that house prices rose less sharply in the last quarter of 2021. Fewer homes were also sold. In the final quarter, 52,800 houses changed hands. That is more than a fifth less than a year earlier. This may also be related to tax changes. To keep investors from the housing market, the transfer tax for this group was increased to 8 percent as of 1 January. As a result, they often used the last months of 2020 to make a quick move.

According to the Land Registry, investors mainly bought cheap apartments at the time. Prices in the closing quarter of 2021 were, partly for this reason, almost 20 percent higher than a year earlier. The average house price in the last three months of 2021 was 403,000 euros. In municipalities such as Pekela, Eemsdelta, Kerkrade, Den Helder and Heerlen, the average price of a home was below 250,000 euros. In Laren, Wassenaar, Rozendaal, Bloemendaal and Blaricum, the average cost was more than 800,000 euros per home.