Saturday 28 November 2020

House prices rise as investors rush to beat tax increase

Photo: DutchNews.nl

House prices rose 9% in October, compared with October 2019, the highest increase in almost two years, national statistics agency CBS said on Friday.

The calculation is based on CBS information about the housing market and land registry office data.

House prices have been rising continuously since June 2013, reaching their highest ever level in October 2020. Prices have gone up by an average of 54% since reaching a low point after the economic crisis of 2008.

More homes are also changing hands, with the number of transactions up almost 20% on a year ago. So far, almost 191,000 homes have been sold this year, a rise of 7% on 2019.

The end of year surge may have been prompted by the government’s decision to put up property transfer tax for professional landlords to 8% next year.

‘Everyone is getting in on the act,’ Patrick Steenstra Toussaint from property investment company Rubens Capital Partners told the Financieele Dagblad. The company is working to finalise a number of transactions before the end of the year and ‘a lot of portfolios have come on the market in the last months,’ he said.

Investors currently pay 2% property transfer tax on their purchases but this will rise in 2021. By contrast, first time buyers under the age of 35 will pay no transfer tax at all.

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