Reduced transfer tax 2021: Does the new tax exemption apply to you?

In 2021, the government decided to make the housing market more accessible for starters by reducing the transfer tax to 0%. However, the term starters does not apply when looking at the conditions of the scheme. In this article, we will clarify exactly how the scheme works so that you can see if you qualify as a homebuyer.

The 3 conditions to make use of the exemption

1. Period of time

You buy a house as from January 1st, 2021, in which you yourself will live for a longer period of time.

You need to declare in a statement (this is a standard form available from the tax authorities) that you will use the house as your main residence, other than temporarily. You have to give this form to the notary who takes care of the ownership of the house.

There is no legal precedent yet as to what is considered temporary, but if, after buying the property, you register with the municipality as having this property as your main residence, then this is sufficient.

If, however, you sell or rent the property after a few months, the question is whether the aim of the purchase was to sell or rent the property quickly.

In the case of a purchase for the purpose of investment (not being owner-occupation), a transfer tax of 8% is levied. Because the regulation has only just come into being, there have not yet been any cases that can serve as examples. If there are any, we will include them in this article.

2. Age at time of purchase

You are 18 years old or older, but not yet 35 years old at the time of purchase.

The regulation only applies if you are 34 years old on the day you sign the title deed at the notary. If you have just turned 35, the arrangement will not apply even if you have signed the purchase contract at the age of 34.

If you are not buying alone but together, both ages are taken into account. If both are younger than 35, there is no transfer tax. If one of the partners is older than 34, this person pays 1% and the other who is younger pays 0%. If both are older than 34, then both pay 1%, which brings the total back to 2%.

 3. New to starters exemption

You did not receive this starters exemption before.

The scheme is new so you have not been able to use it yet. In the future, however, this will come into play. The scheme is a one-off payment per person. If you buy together with another person and that person has not yet made use of the regulation, you will pay a total of 1%.

4. Property possession

Property in possession as from 01-04-2021. 

The total price of the house (including appurtenances such as a garage or shed) may not exceed
€ 400,000.

If you buy before 1-4-2021 you can save considerably on transfer tax. It is therefore expected that in the coming weeks a significant number of homes will be purchased above € 400,000 with a transfer within a few weeks.