Transfer Tax
When buying a new property or a piece of land in the Netherlands, you will need to pay a transfer tax or overdrachtsbelasting to the Dutch government. These are the different types of ownership which require you to pay the transfer tax:
- An immovable property (i.e., a house, business premises, or a piece of land)
- Building right or opstalrecht which is the right to build on, in or above the property of someone else without the other being the owner of what you built
- Leasehold right or erfpachtrecht which is the right to use the land where you house stands on for a definite or indefinite time without you becoming the owner of the land
- Shares in a limited company (naamloze venootschap; nv) or private company (besloten venootschap; bv) where a greater portion of the ownership is on immovable property
- A membership right of a cooperative apartment association (coöperatieve flatvereniging) which is the right to use a part of a building that is the property of the association without you becoming the owner of that part of the building
If one of these ownership types apply to you, then how much should you pay to the government for this transfer tax? Since 2021, an updated tax code of the transfer tax has been applied. The amount depends on your personal situation and we will only discuss here for the case where it applies to the majority of people in the Netherlands, which is buying a house:
| You are between 18 and 35 years old | You are older than 35 year old | |
| House is meant as your primary residence (1st purchase in NL) | 0% (Starters Transfer Tax Exemption or Startersvrijstelling is applied) | 2% |
| House is meant as your primary residence (not the 1st purchase in NL) | 2% | 2% |
| Second house not meant as your primary residence | 10,4% | 10,4% |
The transfer tax rate above is applied to the purchase amount of the house. However, it is possible that in some cases a part of your house does not meet the criteria of the tax exemption due to your intention in making use of this part of house other than your primary residence. Such exception can be applied when calculating the amount of transfer tax rate that you must pay to the government.
Low Transfer Tax Rate: 2%
If you obtain a house in the Netherlands with the intention of living on it as your primary residence, then a lower transfer tax rate of 2% can be applied, unless the Starters Transfer Tax Exemption applies to you. The word “obtaining” here does not only mean through buying, but also through obtaining the property as a result of leasehold, building right, usufruct or apartment right. It is important that you state this through Belastingdienst form Verklaring overdrachtsbelasting laag tarief before the execution of the notarial deed of transfer of the house. Therefore, the notary must have this document in their possession before the notarial deed transfer.
High Transfer Tax Rate: 10,4%
For many of us who have lived in the Netherlands, the difficulty of buying a house or even finding an accommodation have not been a strange occurrence. The Netherlands has faced a housing crisis where in 2021 the government decided to step in to make it less attractive for real estate investors to buy a house and in order for starters to have access to a more affordable housing market. This means that buying a second house in the Netherlands where it is not meant as a primary residence will require you to pay 10,4% transfer tax rate of the purchase price of the house.