Starters Transfer Tax Exemption (Startersvrijstelling)

To ensure that starters have better access to the Dutch housing market, the government has introduced a tax exemption for the purchase of a house for starters or called startersvrijstelling. You have right to use this tax exemption if you satisfy the following requirements:

• You obtain the house where you yourself will live on it for a long period of time
• You are between 18 and 35 years old at the moment that you obtain the house. This is the time when you sign the notarial deed of delivery at the notary
• At the moment when you obtain the house, its value must not be higher than € 510.000 in 2024 (€ 440.000 in 2023). This house value is most of the time equal to the purchase value of your house such as stated in the purchase agreement
• You have not used this tax exemption (startersvrijstelling) before

Have you bought a house previously? Then you can still use this tax exemption as long as you satisfy the above mentioned requirements. It is also important to know that the use of this tax exemption is not mandatory but optional. Instead of using this exemption, you can also opt to use the lower tax rate of 2%, but you must ensure that the next time you buy a house you are still younger than 35 years old and satisfy all the requirements.

Transfer Tax for Renting Out Room of Primary Residence

You are thinking of buying a house but also utilizing one of the room in your house to generate an income by renting it out to a renter. This arrangement is called hospitaregeling in Dutch and has some requirements that you also need to follow. Nevertheless, it is an attractive arrangement to generate some tax exempt income to your main residence while also helping to reducing the burden in the housing market.

However, this arrangement also has some tax implications, particularly on the amount you need to pay for the transfer tax or overdrachtsbelasting as you need to declare this before you sign the notarial deed.

Example 1:

You recently bought a house with a purchase value of € 250.000 and it has a total area of 85 m² with Room 1 of 8 m² and Room 2 of 11 m². You comply with all the conditions stated under the starters transfer tax rate exemption or startersvrijstelling and you intend to use this exemption.

• You decide to rent out Room 1 and use the remaining space as your main residence: This means that (77/85) 90,5% of your house is the main residence. Because this is higher than 90%, the tax exemption applies to the whole house (Discussion on this topic at Belastingdienst)
• You decide to rent out Room 2 and use the remaining space as your main residence: This means that (74/85) 87,06% of your house is the main residence. Because this is lower than 90%, the tax exemption only applies to the 87,06% of your house and the remaining area (12,94%) is taxed at 10,4%. So the amount you need to pay to Belastingdienst is 12,94% ✖ € 250.000 ✖ 10,4% = € 3364