First-Time Buyer Exemption Increased to €525,000 Starting January 1, 2025 – What Does This Mean for You?

Starting January 1, 2025, the exemption for first-time homebuyers from transfer tax will be significantly increased to €525,000. This is an important development for young homebuyers, as it means they will not have to pay transfer tax on purchases up to this amount when buying their first home. This change provides more financial flexibility for first-time buyers navigating an increasingly challenging housing market.

What exactly is the first-time homebuyer exemption?

The first-time homebuyer exemption is a rule that allows buyers of their first home to avoid paying transfer tax. Typically, when purchasing a property, you pay 2% transfer tax on the purchase price, which can quickly amount to thousands of euros, especially with high property prices. Thanks to this exemption, young buyers can save on these costs, making it easier to take the first step onto the property ladder.

Increase from €440,000 to €525,000

Until now, the threshold for the exemption was set at €440,000, but with the increase to €525,000 starting on January 1, 2025, first-time buyers will have more options. This increase comes at a crucial time as housing prices continue to rise in many parts of the Netherlands. First-time buyers now have more room to find a suitable home without facing the additional cost of transfer tax, which could make all the difference in being able to purchase a home.

Who is eligible?

To benefit from the increased exemption, buyers must meet several conditions:

Age: You must be between 18 and 35 years old at the time of purchase.
First home purchase: You cannot have previously used the first-time buyer exemption, meaning this must be your first home purchase.
Personal use: The home must be intended as your primary residence, meaning you must live there yourself. Note: If the purchase price exceeds €525,000, the exemption does not apply at all, and you will pay the full 2% transfer tax on the total purchase amount.

Benefits of the increase

The increase to €525,000 offers several advantages for first-time buyers:

Greater choice: First-time buyers now have access to a wider range of homes without having to worry about the additional cost of transfer tax.
Better chances in a tight housing market: With the increased threshold, buyers can focus on homes in popular and often more expensive neighborhoods without quickly hitting the exemption limit.
Improved competitive position: First-time buyers using the exemption are in a stronger position in the housing market because they do not need to factor in transfer tax into their budget.

What does this mean for the housing market?

The increase in the first-time buyer exemption could positively impact the housing market, especially for young buyers struggling to find a suitable home. With the higher exemption limit, the path to purchasing a first home becomes more accessible, potentially improving market mobility. On the other hand, it could also lead to increased demand for properties in the price range around €525,000, which may add price pressure.

Taking action

If you are considering buying a home, it is important to keep this new exemption rule in mind. The increase will take effect on January 1, 2025, so if you are planning to buy your first home soon, it might be wise to delay your purchase until after this date. Want to know what this change means for you personally? Or need help finding a home that fits within the new exemption limit? Feel free to contact our team at Verra Makelaars. We are happy to guide you through the buying process and help you make the most of this new regulation.