Starter exemption used more often than expected

First-time homebuyers made more use of the first-time buyer exemption than expected last year. This is evident from a letter from State Secretary for Finance Marnix van Rij to the House of Representatives. The 2021 Tax Plan anticipated 80,000 exemptions, but the total number has now reached 104,700.

As of January 1, 2021, buyers under 35 will no longer pay transfer tax. Since April 1, 2020, this exemption has only applied to homes costing no more than €400,000. Those over 35 or buying a home costing more than this amount will pay 2 percent transfer tax.

Deeds
In 2021, 104,700 deeds were filed in which the starter's exemption was applied. Of these, 13,435 involved a combination with the 2 percent rate. This could be the case, for example, if only one partner is under 35.

More often than expected
According to Van Rij (pdf), there are two reasons why the first-time buyer exemption has been used more often than expected. First, many first-time buyers waited until January 2021 to purchase, so they would be eligible for the exemption. Second, the number of home transactions in 2021 was higher than anticipated.

Evaluation
The Transfer Tax Differentiation Act will be evaluated in 2024. According to the State Secretary, sufficient relevant data will then be available to investigate the effectiveness and efficiency of this law. The results of this study will likely be available in 2025.