Starter Exemption: Everything You Need to Know as a Starter
Suppose you buy your first home for €450,000. Then you can save €9,000. Not by negotiating better, but simply by making use of the first-time buyer exemption. Yet many first-time buyers do not know exactly when they are entitled to it.
In this article we explain how the starter exemption works, when you are eligible for it and what you need to look out for.
What is the starter exemption?
Are you buying a home? Then you normally pay transfer tax. Do you meet the conditions of the starters' exemption? Then you do not have to pay that tax not to be paid.
The government introduced this scheme to give first-time buyers a helping hand in the housing market. And you can often make good use of that extra financial benefit. Think of a renovation, furnishing your new home, or supplementing your savings account.
When are you eligible for the first-time homebuyer's exemption?
You are entitled to the starters exemption when you meet all the conditions below:
- You are 18 years of age or older and younger than 35 on the day you receive the key.
- You are buying a home that you will live in yourself.
- You have not used the first-time buyer's exemption before.
- The property has a purchase price that is no higher than the maximum property value established by the government.
Good to know: starting in 2027, the maximum property value for the starter exemption will change. Therefore, always check which Terms and conditions apply at the time you buy a home.
How much can you save?
We've created an example for you to help you apply this in practice:
Does the first-time homebuyer exemption apply only to your first home purchase?
This is perhaps the biggest misunderstanding. Many people think that you must never have owned a home before. That is not correct. The most important question is whether you have used the starter exemption before.
Have you ever bought a home, but did not make use of this scheme at the time? Then you may still be entitled to the starter exemption, as long as you also meet the other conditions.
Want to buy together? How does that work?
This might just be one of the most frequently asked questions we receive. Are you buying a home together? In that case, the tax authorities will determine whether each buyer is eligible for the first-time homebuyer exemption.
Scenario 1: You're both under 35
Do you both meet the requirements? If so, you can both take advantage of the starter exemption.
Scenario 2: One partner is over 35 years old
In that case, the younger partner can take advantage of the first-time homebuyer exemption for his or her share. The older partner pays transfer tax on his or her share.
Do you have to apply for the starter exemption yourself?
Not exactly. The notary handles the transfer tax return. However, you must declare that you meet all the requirements and that you will be living in the home yourself.
Therefore, always check carefully to make sure all the information is correct before signing the delivery document.
Does the first-time homebuyer exemption also apply to new construction?
Are you buying a newly built home? In that case, you usually don’t pay transfer tax, but rather VAT. As a result, the first-time homebuyer exemption does not apply in most cases. However, there is one exception: if you buy a newly built home at a later date from a private seller (for example, because someone is selling their home due to a divorce), you may be liable for transfer tax. In that case, if you meet the requirements, you may be able to take advantage of the first-time homebuyer exemption.
Can you keep the first-time homebuyer exemption?
You are not required to use the first-time homebuyer exemption right away. In some situations, it may make more financial sense to save the exemption for a future home. Whether that’s a wise decision depends entirely on your personal situation.
Always seek sound advice on this matter before making a decision. After all, you can only use the first-time homebuyer exemption once. It’s also always a good idea to stay up to date on the current legislation regarding this matter.
Are you buying your first home in Utrecht?
In Utrecht, you often have to act quickly. Popular homes are regularly sold within a few days. That’s exactly why it’s helpful to know in advance what financial assistance programs you’re eligible for. That way, you can make an offer with greater confidence. So be sure to do your research ahead of time to find out what options are available to you.
What else should I be aware of?
The first-time homebuyer exemption is a great program, but it’s certainly not the only thing you need to consider.
For example:
- purchaser's costs;
- the National Mortgage Guarantee (NHG);
- your maximum mortgage;
- how much of your own money you'll need;
- the terms you include in your offer.
All of these factors together determine how much you can ultimately borrow and how much you'll need to contribute yourself.
Are you looking to buy your first home in Utrecht?
We'd be happy to help you with this. Feel free to send us a message with any questions you may have.
Can we help you further?
Feel free to get in touch with us!