New tax measure threatens new construction of rental housing.

The proposed bill that seeks to impose 10.4 percent transfer tax on real estate purchases through equity transactions will have a severe impact on new construction of rental housing, especially foreign investment construction.


In recent years, foreign pension funds in particular have been active in buying up new Dutch rental properties through equity transactions. This form of acquisition had been exempt from transfer tax since 2011. However, as of January 1, 2024, State Secretary of Finance Van Rij wants to put an end to this through a bill that is currently under consultation. The measure should yield the treasury some 155 million euros.

According to Capital Value director Marijn Snijders, foreign funds bought over 3,500 new rental properties last year out of a total of 13,442. These were often middle rental properties that are too expensive or too large for Dutch pension funds or corporations. Another 3,500 or so foreign purchases through an equity transaction are in the pipeline for next year.

Should the bill be introduced and 10.4 percent transfer tax levied, Snijders fears that these deals may fall through because of the higher cost. This could jeopardize the construction of thousands of rental homes.

As a rental agent, I understand the concerns of Gerton Rademaker, tax consultant and partner at Dirkzwager, about the new bill. According to Rademaker, it is remarkable that the cost of a rental property should be increased for tax purposes during a housing crisis. He points out that in 2013, during the previous crisis, a VAT measure was abolished to reduce the cost price. Therefore, the timing of this bill seems contradictory and it escapes Rademaker what the logic behind this is. 

As a rental agent, I agree with Rademaker that this measure could potentially have negative effects on the construction of rental housing and therefore on both tenants and landlords.

Whatever the consequences are for the coming period in the West Friesland region, we will keep you posted here!

Bron: vastgoedmarkt