Budget Day: transfer tax exemption for first-time buyers

Starting January 1, 2021, first-time homebuyers can receive a one-time exemption from transfer tax. This applies to adults up to 35 years of age. The condition is that they live in the home and it is therefore their primary residence. They must also not have previously applied for an exemption. This is stipulated in the bill for the Transfer Tax Differentiation Act, which State Secretary for Finance Hans Vijlbrief submitted to the House of Representatives on Tuesday during Budget Day.

Those who wish to purchase a vacation home or commercial property, or parents who purchase a home for their student child, will pay 8 percent transfer tax after January 1, 2021. Those who purchase a home and are over 35, or who purchase a subsequent home, will pay 2 percent transfer tax. The explanatory memorandum to the bill presents the proposed rate differentiation in the form of a decision tree (pdf 90, 7 kB) .

Elaboration
The Royal Netherlands Notary Association (KNB) believes the proposed measures are ultimately feasible for the notarial profession, but anticipates significant implementation challenges. This is primarily due to the fact that the notarial profession's feasibility of the January 1, 2021, effective date depends on the design of the written declaration and adjustments to its IT systems. Therefore, as one of the implementing organizations involved, the KNB is involved in the development of this process.

Eight bills
The Transfer Tax Differentiation Act bill is part of the 2021 Tax Plan Package , which this year consists of eight bills: Tax Plan 2021, Other Tax Measures 2021, Box 3 Adjustment Act, Transfer Tax Differentiation Act, Allowances Feasibility Improvement Act, Industry CO2 Levy Act, Amendment to the Sustainable Energy and Climate Transition Surcharge Act in connection with the determination of rates for the years 2021 and 2022 and One-off Rent Reduction for Tenants with Lower Incomes Act.

Follow-up
The House of Representatives' Finance Committee will now process the bills in writing, so they can be debated in plenary session in mid-November. After that, the Senate can proceed with the bill.