If you're between the ages of 18 and 35 and looking to buy a house, then Mie-Lan Kok has some good news for you! Read on to find out more.
On December 15, the Senate approved the 2021 Tax Plan. For home buyers, this means that there are changes with regards to the transfer tax.
No more transfer tax
The transfer tax is a tax that must be paid when a property is transferred from one owner to another. It is a percentage of the purchase price. But, from January 1, 2021, buyers between the ages of 18 and 35 won't have to pay a one-off transfer tax when purchasing a home. Starters and anybody else who bought a house from January 1 and falls into this age bracket can make use of this opportunity.
This new rule will only apply to a home in which the buyer(s) will actually live. After the purchase has gone through, the tax authorities will check whether a buyer lives in the purchased home or has not previously used this exemption.
What does this mean for you?
Scrapping the transfer tax makes the purchase of a home a lot more affordable.
When purchasing a home of, for example, 350.000 euros, this will save the buyer 7.000 euros. The transfer tax will always have to be paid from the buyer's own resources, so this means that this age group will need less in savings to buy their own home.
But, from April 1, 2021, in order to be eligible for transfer tax exemption, the cost of the property cannot exceed 400.000 euros. A 2 percent transfer tax will have to be paid on all properties over the price of 400.000 euros. It is, therefore, important that, if you have a budget of over 400.000 euros and you are younger than 35, you purchase property before April 1.
I expect that the run on these properties will get even bigger in the first quarter of the new year. In the already overstrained market, it could mean that prices will rise further because people insist on acquiring a new house or apartment before April 1.
The transfer tax and buying a house with your partner
The transfer tax exemption is personal. So, if you buy the house with a partner who is 35 years or older, then only the part that you buy yourself is exempt from the transfer tax. So, if you buy half each, the transfer tax becomes 1 percent in total.
Making it easier for starters to get on the property ladder
Buyers aged 35 or older who are going to buy a new home pay 2 percent as before. For investors, the transfer tax will go up from 2 percent to 8 percent. An investor also includes a buyer who buys a home for his child or buyers of a holiday home.
So this new rule is an advantage for buyers under 35 and a disadvantage for investors. With these new measures, the government wants to give more opportunities in the housing market to starters and those who move on to a new home.
Do you need help selling your house and getting a great deal? Don't hesitate to contact Mie-Lan Kok Estate Agency. They would love to help you out!