Netherlands Cuts Property Transfer Tax on Second Homes to 7 Percent From January 2027

The Dutch government has proposed cutting the property transfer tax on residential property that is not the buyer's own home from 8 percent to 7 percent with effect from 1 January 2027. The measure sits in the Belastingplan 2027, the tax bill presented to parliament on Budget Day, 15 September 2026.

What changed

The overdrachtsbelasting, the Netherlands' transfer tax on real estate, applies different rates depending on how the buyer will use the property. The general residential rate, which covers every home the buyer does not occupy as a primary residence, falls from 8 percent to 7 percent under the proposal. That is the rate a non-resident buyer of a Dutch apartment pays, and the rate a landlord pays on a rental unit or a holiday home.

The other rates in the schedule are unchanged. Buyers who will live in the property themselves continue to pay 2 percent. A 0 percent starter exemption remains available to qualifying first-time buyers. Non-residential property, meaning offices, retail units, warehouses and land not zoned for housing, stays at 10.4 percent.

The package also introduces a transfer tax exemption for certain transfers of social rental housing between housing associations, aimed at properties used for services of general economic interest. That exemption also takes effect on 1 January 2027.

The mechanism

The rate cut is contained in the Wetsvoorstel Belastingplan 2027, the main tax bill in the Budget Day package, which also includes a companion bill, Overige fiscale maatregelen 2027. Neither is law yet. A Dutch tax bill presented in September is debated and voted in the Tweede Kamer in the autumn and then goes to the Eerste Kamer, with adoption normally landing in December so that the measures can commence on 1 January. Rates and thresholds are routinely amended during that passage, so the 7 percent figure is a proposal and not a settled number until the bill clears both chambers.

The transfer tax is levied on the purchase price or market value, whichever is higher, and is paid by the buyer at the notarial transfer. It is not creditable against income tax and is not deductible for a private buyer.

What it means for a foreign buyer

A non-resident buying a Dutch property to let or to use as a second home pays the general residential rate, so the proposal cuts one percentage point off the acquisition cost of that purchase. On a 400,000 euro apartment that is 32,000 euros at the current 8 percent against 28,000 euros at 7 percent, a difference of 4,000 euros. On an 800,000 euro property the gap is 8,000 euros.

The date matters more than the rate. Liability crystallises at the deed of transfer before the notary, not at the signing of the preliminary purchase agreement. A buyer who signs in the autumn of 2026 but completes on or after 1 January 2027 falls under the lower rate if the bill passes, while a completion in late December 2026 does not. For anyone currently negotiating a Dutch investment purchase, the transfer date is now a live commercial term worth putting in the contract.

The distinction between the 2 percent owner-occupier rate and the general rate turns on actual use, not nationality. A foreign national who moves to the Netherlands and occupies the property as a main residence can access the 2 percent rate. A buyer who keeps the property as an investment or a second home cannot, whatever their residence status.

Box 3, the Dutch tax on savings and investments that captures rental property and second homes, was left out of the package. The government has said a separate letter will address it, with expected amendments covering a one-year loss carry-back and a deferral regime for partners. The replacement regime under the Wet werkelijk rendement box 3, which taxes actual returns rather than a deemed return, is scheduled to start on 1 January 2028, and the government has signalled a longer-term direction towards a capital gains tax. Investors should not read the transfer tax cut as a general easing, because the holding-period tax treatment is still unsettled.

Context

The Netherlands places no nationality restriction on property ownership. Foreign individuals and companies can buy freehold residential property outright, and there is no permit requirement of the kind found in Denmark or Switzerland. The friction sits in tax and in local rules instead. Several Dutch municipalities operate an owner-occupancy requirement, the opkoopbescherming, which bars the letting of cheaper existing homes in designated areas for a period after purchase, and rent regulation under the points system caps what can be charged on a large share of the stock. A transfer tax cut lowers the entry cost but does not touch either constraint.

Comparable moves are running in the opposite direction elsewhere in Europe. Greece has legislated a 15 percent transfer tax on non-EU buyers from January 2027, Hungary has a wealth tax bill that pulls real estate into its base, and Bulgaria is doubling its property tax assessment values by 2029. The Dutch cut is one of the few reductions in the current European cycle.

Sources

- A&O Shearman, Dutch Tax Plan 2027

- Fiscaal Vanmorgen, Belastingplan 2027: fiscale plannen voor ondernemers en adviseurs op een rij

- Executive Mobility Group, Dutch Tax Plan 2027 and Strategic Agenda