Various Dutch cities have introduced a new law to prevent investors from taking away homes from first-time home buyers: the purchase protection regulation. The purchase protection law forbids renting out a property under certain conditions. The primary goal is to address the shortage of modestly priced, owner-occupied homes that are both affordable and available on the housing market. Real Estate agent explains how this law will affect you as an investor.
The purchase protection regulation only applies if you want to buy a property for investment purposes. Each municipality is free to determine its own policies. For instance, local governments may forbid new investments properties in certain parts of the city and under a certain value.
Please note:
Firstly this regulation do not relate to all cities in the Netherlands.
Secondly the purchase protection applies for a period for 4 years after
you have become owner of a home. The date of the deed of delivery is
leading. This is the date on which you as the owner are registered in
public registers. After that period you have possibilities to rent it out.
Thirdly this is not applicable on properties that were rented out before
March 1, 2022.
Finally, this does not apply to owners who owned a property before March
1, 2022 and do not want to sell it, but want to rent it out.
There are various cities that have introduced purchase protection regulation to protect existing cheap and medium-priced owner-occupied properties from being bought up by investors. The purchase protection must ensure that these homes remain available to buyers who are looking for their own homes, starters in particular.
In some cases it concerns single neighborhoods and in other cases it concerns the entire municipality. The purchase protection applies up to a certain amount of the WOZ value (the value given by the municipality) of the property. The purchase protection applies in the following municipalities: Amsterdam, Rotterdam, Den Haag, Utrecht, Eindhoven, Haarlem, Amstelveen, Tilburg, Den Helder, Groningen and Almere. Our real estate agents will advise you extensively about the rules within each municipality. The conditions and the WOZ value limit are different for each municipality.
The purchase protection has three exceptions. With these exceptions, the municipality must still grant a permit for rental, despite the applicable purchase protection. Municipalities can also determine additional exceptional cases that are appropriate to the problems and composition of the neighborhood. The exceptions apply to properties that are rented to family (first or second degree), are part of an office, shop or business premises or can be rented temporarily on the condition that the owner has occupied the property for at least one year.
There are still plenty of places in the Netherlands where it is still allowed to buy investments for rental purposes. So there are still plenty of opportunities for investors in the real estate market. We are happy to help you find a suitable investment property.
In addition to renting out properties, there is also an option to trade in real estate. There are two options for trading in real estate: buying on the private market or buying at auctions. We are one of the few real estate agencies who have extensive experience in real estate on auctions and who offers investors full service: buying – renovating – selling. We have contractors and builders working under our company name, who can also provide you with the renovation.
When you buy an existing property in the Netherlands for self-occupation, you pay 2% transfer tax. This rate applies if you are going to live in the property yourself. This does not apply to new construction. The transfer tax rate for new construction is 0%.
Home buyers aged 18 to 35 who purchase their first home for
self-occupation do not have to pay transfer tax. They can benefit from the
exemption from transfer tax up to a purchase price of 510,000 euros. This
is the limit, which is set in 2024.
If you have a holiday house, business premises, rental property and other
real estate in the Netherlands in which you will not live for a longer
period of time, the increased transfer tax percentage applies. This also
applies to properties that you purchase to sell within six months. From
2023, the transfer tax for this has been increased from 8% to 10.4%.
What if you buy new construction as an investment or to sell it after completion. No transfer tax applies. New construction projects are delivered freely by name.
Do you have any questions about how the purchase protection regulation might affect you? If so, or if you have any other questions regarding investing in real estate do not hesitate to contact us.