Investors bought many more homes because of transfer tax

According to the Land Registry, the reduction in transfer tax effective January 1st resulted in private investors acquiring a large number of homes in December of last year. An opposite trend was seen among buyers under 35, who are exempt from transfer tax from January 1st under certain conditions, and they postponed their home transfers until the beginning of this year.

Since January 1st, private investors have been paying 8 percent in transfer tax. This was 2 percent. Many of them took advantage of the previous rate in the final months of 2020 by purchasing homes early, thus taking advantage of the old rate. This also increases their share of the number of homes purchased throughout the Netherlands. In the four major municipalities – Amsterdam, Rotterdam, The Hague, and Utrecht – they purchased 25 percent of the homes sold over the past 10 years. Across the Netherlands, this is over 15 percent. In the final quarter of 2020, they purchased 40 percent of the homes sold in major cities. Across the Netherlands, this was 30 percent.

Young buyers
Buyers under 35, on the other hand, postponed their home transfers until after New Year's to avoid paying transfer tax. January 2021 saw twice as many home transactions as January 2020.

Higher house price
Private investors and young buyers can be a source of competition. However, previous research by the Land Registry shows that this isn't always the case. However, the large number of purchases by investors does lead to a higher average house price.

April 1st
On April 1st, there will be another change to the transfer tax. From then on, the transfer tax exemption will only apply to homes worth no more than €400,000. The age limit – under 35 – will remain the same.