House prices in the Netherlands may still be going up, but there is good news for people planning to buy a new home or take that first step on the housing ladder next year.
Every year the government changes the rules and regulations surrounding buying a house, and 2021 will be no exception, particularly for first-time buyers.
Firstly, the government has decided to scrap property transfer tax – or overdrachtbelasting – for first-time buyers under the age of 35. This means that if you are buying an apartment or house costing €400,000, you will not need to find an extra €8,000 to pay this tax.
The idea, according to the government, is to make it cheaper for first-time buyers to step into the market. However, the actual details of how it will work – what it will mean if you are a couple and one of you is 36, for example – stil have to be published. Your mortgage advisor can keep you updated.
The government may be helping first time buyers by scrapping the tax, but they are putting it up for people buying a house as an investment – from the current 2% of the purchase price to 8%. So, if you are thinking about buying a second home to rent out, you will need to consider this carefully. The new rate will also apply if you are buying a flat for your son or daughter or a holiday house.
Another change in the rules which has not had that much attention so far is the decision to allow couples to request a bigger mortgage. At the moment, only 80% of the second income is included in the calculations about how much you can borrow, but that is about to go up to 90%.
So, if one of you earns, say €36,000 and the other €24,000 a year, you will be able to borrow around €7,500 extra to buy a home. Add that to the decision to scrap the property transfer tax, and you will have a decent extra sum to play around with.
By the way, ministers have also decided that student debts will be less important in calculating how much you can borrow as well. The difference is only marginal but in a housing market like this one, every little helps. You should discuss how to handle your student debt with a mortgage advisor. Another change worth taking into account is the increase in the Nationale Hypotheek Garantie, which will now apply to properties costing less than €325,000 rather than €310,000. The NHG, which you do have to pay for, means that if you default on your mortgage, a special home ownership fund will pay off the debt.
As welcome as these changes are, the big problem facing many people who want to buy is actually finding a place they can afford.
House prices are still rising, by an average of 9% year on year in October, and that was the highest increase in almost two years. Of course, there are very wide regional variations. In fact, property data company Calcasa last month described Groningen as the new Amsterdam because house prices had risen in the northern capital by almost 12% in the third quarter of the year.
By contrast Amsterdam was bottom of the ranking with an average rise of under 6%.
One reason for the rising popularity of Groningen is that the coronavirus crisis has not depressed prices, rather, it has boosted areas outside the main cities, where you can get more space for your money. And if you are mainly working from home, and it looks like that will continue, then Groningen is more of an option.
This too is something to consider if you are looking to move or to buy a home for the first time. Is the property you have your eye on still a good option if you will be spending less time at the office and more time working from the kitchen table?