Transfer tax causes peak pressure in the notarial profession

Notaries executed another record number of deeds in the first quarter of 2021. In total, they executed over 490,000 deeds, 50,000 more than a year earlier. This represents an increase of 11.4 percent. The vast majority of these transactions involved real estate transfers and mortgages: these were executed 12,000 and 22,000 times more frequently, respectively.

The reason for this peak period is the change in transfer tax rates effective January 1, 2021, and April 1, 2021. Until January 1, the first change primarily benefited investors, and subsequently benefited first-time buyers. Starting January 1, first-time buyers will no longer pay transfer tax on the purchase price of a home. This was 2 percent. Effective April 1, this exemption will be limited to a property value of €400,000.

BVs and cohabitation contracts
The number of newly established private limited companies (BVs) and cohabitation agreements also rose significantly: over 21 and 40 percent, respectively. In absolute numbers, however, these deeds represent a much smaller share of the total number of deeds. The number of newly established private limited companies (BVs) rose by almost 3,500 to approximately 19,500, while the number of cohabitation agreements rose by just over 4,000 to almost 14,000. The number of wills registered with the Royal Dutch Association of Civil-Law Notaries (KNB) was approximately the same as in the first quarter of last year (76,000).

'Sign today for tomorrow' is a hit
The number of living wills decreased by more than 5 percent, from over 43,000 in the first quarter of 2020 to nearly 41,000 this year. However, compared to February of this year, the number of living wills increased sharply in March (21.7 percent), partly due to the "Sign today for tomorrow" advertising campaign.

Future expectation
The peak workload in real estate law appears to have peaked. Over a third of respondents to the KNB monthly survey indicated a decrease in new cases in real estate law. For 40 percent, the number remained the same, and 22 percent indicated an increase. In family law, 27 percent indicated an increase. Over 10 percent noted a decrease, and for over 62 percent, the number of new cases remained the same. The number of new cases in corporate law is increasing for over 35 percent of respondents, 19 percent saw a decrease, and for over 45 percent, the number of new cases remained the same.