Friday 25 September 2020

House prices up, transfer tax down? A round-up of the latest housing news

A round-up of the latest housing news, brought to you by Expat Mortgages.

Good news for home buyers in the budget

The Dutch government will present its 2021 spending plans to MPs and the public on September 15 but as usual, some of the plans are already being leaked – and there is some good news for young first-time buyers. Overdrachtbelasting – the transfer tax which you pay on the price of your new home – is being scrapped for starters under the age of 35 – which would mean a saving of €7,000 on a €350,000 home.

In itself, this is a positive move, says Expat Mortgages’ Henk Jansen. However, he says, it is not really clear what the government is hoping to achieve. ‘If you want to buy a home costing €350,000 you will still need income of €70,000 a year, plus some savings, so the scrapping this tax is not likely to boost the number of first time buyers.’

Mortgage tax relief

Also up for discussion is the political hot potato of mortgage tax relief. The maximum tax deduction is currently being reduced in stages of three percentage points to the basic income tax rate of 37.1% by 2023. But there is some talk the government might decide to speed this process up, and that an announcement could be made in the budget, even though this would be a controversial measure ahead of the March 2021 general election.

Henk Jansen says he is convinced mortgage tax relief will be phased out altogether at some point in the Netherlands. It is, after all, one of the few countries in Europe which still have such a generous tax break on home ownership.

So should home owners be worried? ‘With the low interest rates at the moment, new buyers won’t miss the tax break that much,’ says Henk. ‘Psychologically it will have a big impact, but I don’t think the impact will be that great financially, on balance.’

House prices are still going up

Despite dire warnings from some of the big banks, the housing market has escaped the coronavirus largely unscathed – and average house prices rose by a further 7% in July. Demand shows no sign of slowing down, despite fears that thousands of jobs will be lost.

In fact, Expat Mortgages had its best ever month in July, helping 20% more people buy their own home. ‘People did not go away in the summer, so they put their homes on the market in July, rather than waiting until the autumn,’ says Henk Janssen. ‘Everything below €750,000, and the prices are still going up like crazy. Up to €1.5m prices have stablised but above that, I’ve seen prices coming down. There is room for negotiation.’

Upcoming webinars to help would-be buyers

If you would like to find out more about buying a new home, feel free to join one of Expat Mortgages’ upcoming housing webinars and ask your questions. The next ones are being held on September 9, 17 and 23. The digital doors open at 5pm. Register here.

Coronavirus and mortgage applications

If you have been applying for a mortgage since the coronavirus took hold, you may have been asked to fill in a form about how secure your job is. So be aware of this, and think carefully about how you fill it in. And remember, it is always wise to consider what you would do if your job is at risk, or if your hours might be cut, pandemic or no pandemic.

By the way, you can now contact a free helpline for advice if you want to find out whether there is something you can do to reduce or postpone your monthly payments to get through these difficult months. Find out more.

Are you sure you want to live in a city?

Henk also recommends people think carefully about what sort of home they are looking to buy, given the likely longer term impact of coronavirus on jobs and social lives. A flat of 50 m2 in Amsterdam or The Hague is not much room if you have to work at home, he points out.

‘People want to live in the city for the city life, the restaurants, the theatres and the like,’ he says. ‘Your home was somewhere you lived and then went out to work. But now you can’t do this quite so much any more, perhaps a house with a small garden in a commuter town might be a good alternative.’

Tools to make home buying easier

If you are thinking of buying a house but not sure how much you can borrow? Get a rough idea of how much you can spend on that home of your dreams with this quick calculator

And if you’ve got any questions about the process of buying a home in the Netherlands, you can always check out the FAQs on the Expat Mortgages website to see if they have the answers. Drop them a line if your question is not on board.

If you prefer to listen to an expert, you can also check out the videos on Facebook, which explain issues such as the importance of a valuation report.

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