As of 1 January of a new year, a number of rules always change in the housing market. Things will change around the NHG limit and transfer tax. In this blog, we list these changes!
Average house prices have fallen over the past year, yet the NHG limit is set to rise in 2024. The NHG limit is determined based on average house prices over a longer period than just the past year. During 2021 and much of 2022, we saw a notable increase in homes falling above this limit because of the rapid rise in average house prices. However, the subsequent fall in house prices has meant that the NHG limit is currently close to the level of monthly average house prices published by the Land Registry.
The NHG limit for 2024 was estimated at around €440,000. This would already be an increase of €35,000 from the 2023 limit (€405,000). The NHG limit has now been announced for 2024 and it increases to €435,000. For people who would like to make their homes more sustainable, additional borrowing space is available. As a result, some households' NHG limit may rise to as much as €461,100 in 2024.
This increase opens the doors for a greater number of people to finance a home with the protection of the NHG. NHG acts as a safety net for homeowners facing financial difficulties, foreclosures or residual debts. However, to avail of NHG, the home must fall within the NHG limit. Currently, more than 40% of all homes bought in the Netherlands have a mortgage with NHG. Every year, both the bail commission (the one-off fee for a mortgage with NHG) and the NHG limit are reset according to a specific methodology, based on the average house value. This approach ensures stability in the housing market while ensuring that people retain access to a mortgage with NHG. This bail-in fee will remain at 0.6% in 2024. This percentage will therefore not change compared to 2023.
Besides the changes around the NHG limit, things will also change in 2024 with regard to the transfer tax. Normally, this tax is 2% for people buying a home. First-time buyers will get an exception for this if they meet a number of requirements. For instance, they must be between 18 and 35 years old, this must be the first home they buy and the purchase price of the home cannot currently exceed €440,000. The change taking place from 2024 is that the purchase price amount will be increased from €440,000 to €510,000. This change will give more first-time buyers the chance to make use of the exemption for their first home and will give first-time buyers and those moving on a better position in the housing market vis-à -vis investors.
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