KNB: 'Reverse the transfer tax amendment'

On October 29, State Secretary for Finance Hans Vijlbrief sent an amendment to the Transfer Tax Differentiation Act bill to the House of Representatives. This amendment specifies several actions civil-law notaries must perform. The Royal Dutch Association of Civil-Law Notaries (KNB) wants the State Secretary to withdraw the amendment. The professional organization wants leeway to shape the bill's implementation in collaboration with the Tax and Customs Administration.

The amendment supplements Article 15a of the Dutch Tax and Customs Administration Act (WBR) with additional rules regarding the written declaration required when using the 2 percent tax rate or the starter's exemption. This declaration must be submitted by completing a standard form provided by the tax inspector. Furthermore, it stipulates that the notary must attach the declaration to the deed and form part of the tax return. The notary is required to indicate in the deed—in a manner specified by the tax inspector—that the declaration has been attached to the deed. Finally, it stipulates that the notary must send an electronic copy of the declaration to the tax inspector.

No close involvement
The bill initially allowed notaries to collaborate with the Tax and Customs Administration to implement the bill. However, the State Secretary is already imposing additional administrative burdens regarding the 2 percent tax rate and the starter's exemption, while the precise details of the law's implementation remain unclear. The Royal Dutch Association of Notaries (KNB) wants to know why this exemption differs from the others and why its implementation is not being left to the notaries and the Tax and Customs Administration. The State Secretary has repeatedly written to the House of Representatives stating that notaries were closely involved in the drafting and implementation of the bill. However, the KNB currently experiences this differently and no longer recognizes this perspective. The professional organization also has serious concerns about the short-term and long-term feasibility of the bill for both notaries and the Tax and Customs Administration. In response to questions from Helma Lodders (VVD), the State Secretary promised the House of Representatives that he would consult with the KNB. Member of Parliament Pieter Omtzigt (CDA) asked Vijlbrief to answer the questions previously posed by the KNB. The State Secretary has also promised this.

From January 1st
Starting January 1, 2021, first-time buyers can receive a one-time exemption from transfer tax. The exemption applies to purchasers who are of legal age and under 35, who acquire a dwelling or a right to which a dwelling is subject, who will use this dwelling as their principal residence other than temporarily, and who have not previously used the exemption. Purchasers must declare the last two conditions in writing by downloading a standard form from the Tax and Customs Administration website. Other individuals—other than first-time buyers—who acquire a dwelling and will use it as their principal residence other than temporarily are entitled to the reduced rate of 2 percent. They must also submit a similar declaration. All other acquisitions will be taxed at 8 percent starting January 1, 2021. This means that—in addition to the acquisition of non-residential properties, such as commercial properties—acquisitions of dwellings that will not be used, or only temporarily, as their principal residence will also be taxed at 8 percent.