Housing market measures
The housing market is undergoing a period of change (on several fronts). The increase in housing demand, the insufficient levels of residential construction and the desire for (further) greening are all examples of this. Below we elaborate on the most important tax plans relating to the housing market.
Adjustment of landlord levy
As a result of the high demand for housing and insufficient residential construction, the shortage of housing has drastically increased in recent years. In order to reduce the shortfall, two incentive measures are proposed in the context of the landlord levy with effect from 2020: (1) a structural reduction in the landlord levy for new buildings in areas of scarcity and (2) a temporary exemption from landlord levy for temporary housing. The landlord levy applies to landlords – whether natural or legal persons – who rent out at least fifty social housing properties.
The proposed structural reduction in the landlord levy amounts to €25,000 (one-off) for each new home, with it being necessary to meet the following (cumulative) requirements:
- The new home is situated in a socalled area of scarcity (schaarste gebied). These are the areas where homes have the highest average value for the purposes of the Valuation of Immovable Property Act (WOZ) or that form part of a region with which the government has concluded a socalled housing deal.
- The new home has a rental price below the lowest capping limit in the housing allowance (in 2019 this limit is €607.46).
- The minimum investment costs of the new home are €62,500.
- The construction of the new home must have started on or after 1 January 2020 and also be completed within five years.
The reduction in the landlord levy is formalised in an investment declaration issued by the Netherlands Enterprise Agency (RVO) at the request of the landlord. If all conditions are met, the investing landlord can apply the tax credit to the total landlord levy that he or she owes in that year. If the credit is higher than the levy for that year, the difference can be deferred to a subsequent year, under certain conditions. As of 2020, €100 million will be made available each year for this reduction in the levy. The budget will be adjusted upwards or downwards depending on the number of applications.
Temporary exemption for temporary housing
A temporary exemption from the landlord levy is also proposed for temporary housing. This must relate to temporary housing completed in the period 2020-2024. The temporary nature of the housing must be reflected in the integrated environmental permit issued by the municipality. This must stipulate that the permit holder is obliged to restore the situation existing before the granting of the integrated environmental permit after the expiry of a certain deadline (maximum 15 years).
Comment by PKF Wallast
The measures mentioned above may potentially be a form of (illegal) state aid. However, the Cabinet believes that this form of state aid can be justified.
Increase in transfer tax for non-residential properties
It is proposed to increase the transfer tax for non-residential properties by 1%, from 6% to 7%, with effect from 2021. Non-residential properties include industrial buildings, business premises, residential building plots, hotels and guest houses. For residential properties, the transfer tax will remain at 2%.
Comment by PKF Wallast
The importance of a clear distinction between residential and non-residential properties will become (even) more important due to this rate increase. At the time of writing, we are awaiting a judgment of the Supreme Court relating to the issue of whether or not the transfer of an old industrial building that is in the process of being converted to one or more residential properties is taxed at the reduced rate of 2%. This judgment will increase even further in significance with the increase in the regular rate as of 2021.
The Climate Agreement contains various greening measures, including measures that (indirectly) relate to the housing market. In this context, we refer to the ‘Greening measures’ section.
 Examples are the entire province of Utrecht, the east of North Brabant, the Betuwe and Veluwe in Gelderland, a large part of central and southern North Holland, and Leiden and the Bollenstreek in South Holland.