Starters on the Housing Market Often Bid Just Below the Threshold for Exemption from Transfer Tax When Buying a House. That’s the Conclusion of Researchers in The Economics Journal ESB .
For example, there are a striking number or starters who applied for exemption last year for the purchase of a home just below 510,000 euros. Above that amount, the exemption does not apply. A year Earlier, that limit was 440,000 euros, and then the exemption was of applied just below that amount.
The Researchers See Several Explanations. For Example, they suspect that some starters exhibit “Tax-avoiding Behavior.” “For Example, a person can buy a house for an amount just below the limit, but then over movable property (EC, Furniture, ed.) For an (excessively) High Fee.”
Also, the limit amount can be a child or ‘anchor’. “Because an explicit amount has bone set as a limit, people may be inclined to bid or Ask for this amount more quickly than amounts that are just below or above it,” The Researchers State.
A third explanation is that such a hard limit influences supply and demand. Anyone who exceeds the limit amount also has to pay the extra tax immediately and will therefore try to stay below it. Sellers Can also Adjust Their Price Accordingly.
Doubts About the Usefulness of Exemption
The Starter Exemption was created in 2021 and Should Help Starters in Their Difficult Position on the Housing Market. Accordance to the rules, young people up to 35 years old who buy a house for the first time do not have to pay transfer tax if their purchase price is below a certain amount.
The Transfer Tax is 2 percent of the purchase price. This mean that with a purchase price or 500,000 euros, you do not have to pay about 10,000 euros in tax.
Experts Doubt Whether the Scheme Really Helps starters. For Example, Several Experts Express Their Concerns to the FD That the Exemption Actual Causes House Prices to Rise Faster. After all, buyers can bid highher if they do not have to pay tax.