When purchasing a home, you will soon have to deal with transfer tax. Since 2021, a distinction is made between the acquisition of a home where the buyer himself will live (2% rate or starter exemption) and all other acquisitions (then 8%, now 10.4%). Crucial here is the requirement that a transferee will use the home "other than temporarily as his main residence"; this is known as the main residence criterion or the self-occupancy requirement. The Hague Court of Appeal recently ruled on the self-occupancy requirement. In this post, we explain why this is important for you.
What is it all about?
The case concerns a woman who bought a house together with her father. The woman intended to live there (main residence), but agreed with the sellers that the sellers could continue to live there for another two years.
The Inland Revenue finds that the main residence criterion is not met because the house is first used for two years for someone else to live in. The fact that the sellers are still allowed to stay in the house will also have influenced the purchase price, so you could say that the woman is buying the house in order to rent it out temporarily. This makes it look more like an investment property than an owner-occupied home. On the other hand, however, the woman will indeed be living in the home after that period.
Why is this case notable?
In practice, since the introduction of the self-occupancy requirement, such arrangements have been identified as a risk and this case shows that the Inland Revenue believes that the low rate (and therefore the starter exemption) cannot be applied in such situations.
Hef Court disagrees. After all, the law does not prescribe a period within which the buyer must occupy the house, and in this case it is established that the woman eventually moves into the house in order to live there herself. So good news for the buyer!
What does this mean for you?
This ruling offers opportunities for practice. A broader application of the reduced rate and the start-up exemption in transfer tax seems to be possible under circumstances.
The State Secretary initially still wanted to go to the Supreme Court, but has refrained from doing so in this case. It is therefore possible that future cases will therefore turn out differently. Good advice and a critical look at the specific circumstances is therefore essential to avoid nasty surprises.
Should you have any questions about your specific situation as a result of this news item, please contact us at 040 - 2 504 504 or at btw@govers.nl. We will gladly map out the possible opportunities and points of attention for you.