Numerous new rules

There are a lot of changes again in 2021 for people who own a home or people who are going to buy a home. The fact that for first-time buyers in the housing market, the transfer tax rate came to 0% on January 1 has already received a lot of publicity. Starters in this case are younger than 35 years. They do have to declare in writing that they will use the house as their main residence. As of April 1, there is an additional condition: you only claim exemption from transfer tax if the purchase price is lower than €400,000. If the starters exemption does not apply, the 2% rate applies. The general transfer tax rate goes from 6% to 8%. This is for commercial premises, but also for homes that do not serve as the buyer’s main residence. These can be vacation homes, but also homes purchased by investors or homes that parents buy for their child.

Then the limit for the National Mortgage Guarantee (NHG) increased from €310,000 to €325,000 and for homes where energy saving measures are taken to €344,500. The premium that you pay for it (once) remains 0.7% of the mortgage amount. You get a discount on mortgage interest and you can use a safety net if you can no longer pay the mortgage and would have to sell the house.

The mortgage interest deduction decreases in 2021 from 46% to 43%. So you can deduct less from the tax. Over the next few years, this rate will be reduced by 3% each year until a rate of 37.05 is reached in 2023. The Hillen deduction is also decreasing, this year by 3.5% to 90%. The Hillen Act entitles you to an additional deduction if you have no or little owner-occupied home debt. A reduction of 3.5% each year is to be expected until 2048, when this deduction will be completely eliminated.

The average WOZ value (the estimated market value of your home) is expected to increase by 6 to 8% this year. The owner-occupied home tax rate for 2021 has been set at 0.5% (2020: 0.6%) on the WOZ value for homes between €75,000 and €1,060,000. This amount is added to your income if the property is your main residence. Of course, there are more changes and more conditions. Inform yourself well with real estate agent or financial advisor.