How much transfer tax do you have to pay in 2024?

When purchasing a property, there are various costs to consider, including transfer tax. This tax is a percentage of the purchase price paid to the Tax Authority when you become the new owner of a property. The rules for transfer tax in 2024 differ from previous years.

So, you're probably thinking... Okay, then how much tax will I have to pay this year, and are there any exemptions? To answer your question, yes there are but first let's dive into defining some key terms you need to know first.

What is transfer tax?

Transfer tax is a fee levied by the government on the transfer of property ownership. It is typically calculated as a percentage of the property’s sale price or value and is included in the closing costs of a real estate transaction.

Please note: that transfer tax is only charged when you have purchased a property, whether it's your first home or not, and is part of the "costs to buyer," and may also include notary fees, registration fees, and other administrative expenses.

In 2024, the transfer tax rules in the Netherlands are categorized based on the type of property and the buyer's status. Here's an overview below:

2024 Transfer Tax Rates:

• Standard rate: 2% — Typically applied to home purchases.
  

• Increased rate: 10.4% — For properties that are not your main residence, like a vacation home or rental.

• Exemption: 0% — First-time buyers between 18 and 35 can get a one-time exemption for homes up to €510,000.

Exemption eligibility:

• Age between 18-35 at the time of signing.

• Intending to live in the home long-term.

• Purchase price up to €510,000.

• First-time use of the first-time buyer's exemption.

More Detailed Information:

First-time Home Buyers: Individuals aged 18 to 35 purchasing their first home are exempt from the 2% transfer tax if the property value does not exceed €510,000. This exemption aims to make home ownership more accessible to younger buyers and is available only once.

Standard Residential Properties: For buyers who do not qualify for the first-time homebuyer exemption, the transfer tax is 2% of the purchase price. This rate applies primarily to properties intended as the buyer’s primary residence.

Investment Properties: Properties purchased as investments, such as second homes or rental properties, are subject to a higher transfer tax rate of 10.4%. This rate is part of a governmental strategy to discourage speculative buying and ensure more homes are available for primary residents.

Future Changes: Beginning in 2025, there will be significant changes affecting real estate companies, particularly concerning share transactions. Historically, acquisitions of shares in real estate companies could avoid the standard property transfer tax through the concurrence exemption. However, this exemption will be abolished, and such transactions will instead incur a reduced transfer tax rate of 4%.

These tax measures reflect a broader strategy to balance the housing market, encourage first-time homeownership, and regulate the investment-driven segment of the market.

To ensure you benefit from the transfer tax exemption as a first-time homebuyer, it's essential to submit the 'Declaration of transfer tax exemption for first-time buyers' to your notary before the property handover.

This proactive step is crucial as your notary will facilitate the exemption process with the Tax Authority on your behalf. Taking advantage of this exemption can significantly reduce your upfront costs, making it easier and more affordable to step into your new home.

Don't miss out on this opportunity to save—ensure your documentation is ready and submitted in time to capitalize on these savings!