Notary's wishes regarding transfer tax largely adopted

After consulting with the Royal Dutch Bank (KNB), the Ministry of Finance has made several changes to the bill amending the transfer tax. State Secretary Hans Vijlbrief wrote this in a letter to the House of Representatives. Yesterday, the House of Representatives approved the amended bill on the differentiation of transfer tax and several amendments.

The State Secretary announced in a letter to Parliament that he would be submitting a second amendment to the Transfer Tax Differentiation Bill. This amendment stipulates, among other things, that the notarial deed must demonstrate that the first-time buyers' exemption or the reduced rate is being applied for. Notaries must attach a written statement to the deed and send an electronic copy to the Tax and Customs Administration. The Royal Dutch Association of Registered Traders (KNB) and the Tax and Customs Administration are in consultation to develop workable wording for the deed for both parties.

Electronic copy
In consultation with the Royal Dutch Tax and Customs Administration (KNB), the State Secretary has also extended the deadline for sending an electronic copy of the written statement. This was previously set at one business day after submitting the deed to the Tax and Customs Administration for registration. The deadline is now one month.

Home value limit
Due to an amendment adopted as part of a broader political deal between Henk Nijboer (Labour Party) and Paul Smeulders (GreenLeft) with the cabinet, a property value limit for the first-time buyer exemption will apply from April 1, 2021. This "arbitrary" limit is currently set at €400,000. If the value of the property is below this limit, the first-time buyer exemption applies and no transfer tax is due. If the property value is higher, the first-time buyer exemption does not apply, and 2 percent transfer tax is due on the entire value.

Foot exemption
Due to the amendment by Nijboer and Smeulders, the starter's exemption has been transformed into a threshold exemption. The Royal Dutch Association of Notaries (KNB) has advocated with both the Ministry of Finance and the House of Representatives that a threshold exemption for notaries is more feasible and will lead to less discussion with notaries. Chris Stoffer (SGP), in consultation with the KNB, submitted an amendment proposing a property value limit (of €325,000, the National Mortgage Guarantee (NHG) threshold) in the form of a threshold exemption. When acquiring a property with a higher value, 2 percent transfer tax would then only be payable on the excess. This amendment was discouraged by the cabinet and failed to gain a majority in Parliament.

Horizon determination
Based on an amendment by the Christian Union, Democrats 66, and 50Plus, which was adopted, housing cooperatives are exempt from the 8 percent rate increase when they acquire a home from a housing association. These acquisitions are subject to a 2 percent transfer tax. An amendment by the People's Party for Freedom and Democracy (VVD) and Democrats 66 was also adopted, removing the so-called sunset clause from the bill. This means that the changes to the transfer tax, originally intended to apply for five years, will become permanent.

More information: KNB, Alex Dijk, a.dijk@knb.nl , 06-86891008 and Jacco Sjerps, j.sjerps@knb.nl , 070 3307226