The state uses different tax rates when transferring real estate. For decades, 6% of the purchase price was withheld by the tax authorities when a house or other property was sold.
In 2011, the rate for housing was reduced to 2%, a measure that followed the crisis in the housing market. For other properties, 6% still had to be paid.
What has changed in the transfer tax?
The government has introduced more differentiation and wants to make the housing market more accessible to first-time buyers. From 2021, the rates are as follows:
- 0% for starters in the housing market
- 2% for buyers in the housing market
- 8% for the rest of the mortgage transfers
The reduced rate of 2% only applies to people who use the house as their main residence. The general rate for all other transfers has therefore been increased from 6% to 8%.
You pay the transfer fee at the notary. During the transfer, he transfers the amount to the tax authorities on your behalf.
Young people between the ages of 18 and 35 who buy an existing home are entitled to the rate of 0%. This is a one-time exemption that only applies if the buyer must also live in the home and has not previously used the dispensation. From 1 April 2021, the purchase price may not exceed € 400,000. If the house is more expensive, you still pay 2% transfer fee.
Other people who buy a home pay a 2% transfer tax. The condition is that the house must be the main residence. As with the 0% rate, it must be stated that you must live in the home for a longer period of time. This is done by the notary who adds the statement to the letter of purchase.
Commercial premises and dwellings that are not main dwellings
The increased 8% rate applies here. This applies to commercial purchases and owner-occupied homes that have not been purchased for private use, but for investment purposes, e.g. Think of:
- Shop or office building
- Property for rent
- investment properties
- Second home or cottage
- Home to a child
How is the transfer fee calculated?
The tax is calculated by the value of the property you buy. This does not apply if the property would normally be offered for a higher amount while you buy it at a lower value.
This may be the case, for example, if you are taking over from acquaintances, family or friends. You still pay transfer tax of the value for which it can normally be sold.
In addition to the property itself, you also pay the transfer fee for basic tenancy rights and land. If you do not buy a building, but a business space within a building, then there is still a transfer fee.
Calculation example transfer fee
- Value of property to be purchased: € 350,000
- Purpose: Use as business space
- current price: 8%
- Transfer fee to be paid: € 28,000
Purchase of business premises: points of attention
If you are looking for a property to establish your business activities, buying is one of the options. We have previously written about what you need to be aware of when buying a commercial property.
Because you make an investment, you are entitled to an investment deduction. An important point of attention is therefore to get good advice in the tax area.
Another frequently asked question is: what about business premises and VAT? It depends on the situation. VAT is required on the purchase price for new construction, something that does not apply to existing real estate.
Another important consideration has to do with mixed purposes. If you buy a commercial property that also contains a home and you have to live in the residential area for a longer period of time, you pay not 8%, but 2% or even 0% (start exemption). This only applies to the residential area, 8% applies to the rest of the business premises.
Exemption from transfer tax
In some cases, you are entitled to a waiver. Do you also pay VAT on the purchase or do you transfer a property to a company? Then it is worth checking if you can get an exemption from the transfer fee.
Always seek advice from a tax advisor. Exemption is possible in the following situations:
- if you have to pay both transfer and sales VAT (VAT)
- in case of business transfer to family members
- contribution to a partnership, responsible partnership or limited partnership
- transformation of a company into an NV or BV, merger, division or reorganization within a group.