2022 Tax Plan – Outline of landlord levy and property transfer tax | Deloitte

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2022 Tax Plan – Outline of landlord levy and property transfer tax

2022 Tax Plan - Budget Day (Prinsjesdag)

The following lists the measures proposed in the 2022 Tax Plan in respect of the landlord levy and property transfer tax

18 oktober 2021

Outline of landlord levy and property transfer tax measures

Dutch version

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Webcast Tax Plan 2022

Corina van Lindonk, Aart Nolten and Eddo Hageman discussed the most noticeable measures of Tax Plan 2022.

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A home with a conditional sale clause

An exemption will be included in the property transfer tax regime for the acquisition of homes with a conditional sale clause, also called ‘VoV homes’ (the abbreviation ‘VoV’ refers to ‘verkoop onder voorwaarden’, i.e., conditional sale). It means that an occupant is sold a home at a discount and when it is sold, the occupant must offer the home to the original seller again. The sellers involved are often housing corporations or project developers that use this method to facilitate access to the housing market. The target groups are first-time buyers and middle-income people who earn too much for social housing but too little for an owner-occupied home.

A differentiated property transfer tax rate has been effective since the beginning of this year, which means that if a VoV home is transferred back to a housing corporation or project developer, this is subject to the general 8% rate. The government considers this to be undesirable, because most VoV homes are specifically intended for first-time buyers. First-time buyers who buy their homes directly need not pay any property transfer tax, so the use of a conditional sale clause leads to an extra cost item. Since VoV homes are conducive to improving the access to the housing market, the government wants to remove this obstacle. The acquisition of VoV homes will thus be exempt from property transfer tax, subject to certain conditions.

Changes to exemption for first-time buyers

The government proposes to amend the anti-abuse provision in respect of the exemption for first time buyers. The exemption for first-time buyers only applies to homes whose value does not exceed EUR 400,000. Circumventing this limit by splitting up a home and acquiring another part of the same home within one year is prevented by examining whether both parts together do not exceed the EUR 400,000 limit. If they do, the exemption for first-time buyers will still be withdrawn. The legislative text will be clarified on this point, while an addition is included under which the rule only applies if the first time acquisition takes place on or after 1 April 2021, the date of introduction of the EUR 400,000 limit. Finally, the anti-abuse provision will no longer apply to anyone who has acquired the home from the first-time buyer under inheritance law or matrimonial property law.

The exemption for first time buyers only applies if buyers will use the home as their principal residence. Because unforeseen circumstances after the acquisition, such as death or divorce, sometimes make this impossible, the exemption may still be applied if such a circumstance occurs. This concession will now also apply to situations in which the unforeseen circumstances have occurred in the period between entering into the purchase agreement and the delivery of the home.

Simplifying the notarial return process

Effective from 1 January 2022, the content of the electronic return notification for property transfer tax purposes will be expanded to include, among other things, information on the exemption invoked. As part of this, the information that a purchaser must provide to be able to use the exemption from transfer tax for homes will also become part of the return notification. Hence, the standard form no longer needs to be completed and sent. From now on, the notarial deed will include a standard clause showing the statement that proves that the purchaser meets the conditions. Since it is expected that not all civil-law notaries will have the necessary software to file the extended return notification by 1 January 2022, a transitional arrangement has been provided for until 31 March 2022.

Reduction of landlord levy rate

The landlord levy rate will be reduced to 0.332% in 2022 (2021: 0.526%), partly to compensate for the freezing of rents in the social rental sector in 2021 (EUR 180 million) and partly because of a motion adopted by the House of Representatives during the parliamentary debate on the speech from the throne, calling for a structural reduction (EUR 651 million). Of the latter amount, EUR 151 million has been earmarked as compensation for a tightening of the so-called earnings stripping rule in corporate income tax. Agreements will be reached with the housing corporations for the remaining EUR 500 million, on using the funds for new housing construction and making homes more sustainable.

Adjustment tax reductions landlord levy

A system of provisional and final investment statements can be used to obtain a tax reduction for certain qualifying investments. Subject to certain conditions, this amount is deducted from the landlord levy. If the notifications of planned investments indicate a budget overrun, a certain tax credit can be set to nil at the start of a calendar quarter. As this change only applies to notifications of intended investments after the start of the calendar quarter, the date on which the Netherlands Enterprise Agency (NEA) issues the provisional or final investment statement following the notifications is not important for this.

Practice has proven the period of a quarter to be too long for preventing budget overruns on time. One of the causes regard notification effects, since lessors can still notify proposed investments until the next moment of change. This is why it will now be arranged that the tax reduction amounts can be adjusted at the start of a month. This will be announced at least one month in advance though, so some anticipation will still be possible.

The reverse situation also applies, for that matter. If already claimed budget is released because notified planned investments are not realised on time, the tax reduction amount can once again be increased.

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