Conveyance tax down four percent?

The cabinet wants to give the stagnating housing market a boost by lowering the conveyance tax from six to two percent for a one-year period.

The conveyance tax – imposed on the transfer of real estate property – is seen as a serious obstacle to mobility in the housing market, which has taken a serious blow as a result of the financial crisis. Many potential buyers can’t get mortgages and many homes are on the market for a long time before they are sold.

The proposed measure forms part of a more extensive vision on the future of the housing market. At present, revenue from the conveyance tax is at 3.5 billion euros. The 2.3 billion euro shortfall in tax revenue is to be made up by a new bank tax. 

Initially, it looked like the cabinet would not present its proposal until after the summer recess. Just last week, Deputy Prime Minister Maxime Verhagen advised prospective buyers to go ahead and not wait for possible cabinet measures. However, Mr Verhagen did guarantee that the cabinet would not tinker with the current system of mortgage interest relief.

Positive reaction
Real estate brokers reacted positively to the proposed measure. The real estate agent association NVM said it was pleased the ‘moving-house fine’ would be scrapped. Most political parties are in favour of lowering the conveyance tax, but disagree on the best way to do this.

Labour Party MP Ronald Plasterk said “It is a temporary and half-hearted measure, but it’s better than nothing.” He said he was pleased that the cabinet had decided to introduce a bank tax. The Socialist party, as was to be expected, agreed.

Unacceptable
The Green Left party said the cabinet proposal was unacceptable. MP Bruno Braakhuis said certain limits should be set before the conveyance tax is changed.