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Netherlands: Reduced transfer tax, office building converted into residential apartments

Netherlands: Reduced transfer tax

The Dutch Supreme Court (Hoge Raad) on 29 November 2019 issued a judgment concerning application of the reduced 2% transfer tax rate with regard to the acquisition of a right to an apartment in a building converted from an office building to residences.

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This case concerned an office building that was converted into residential apartments. However, the renovation work was not yet completed at the time of acquisition of the apartment. At issue was whether the nature of the property had already been changed to residential property at the time of the acquisition so that the reduced transfer tax rate of 2% would apply (instead of the transfer tax rate of 6% for non-residential property transfers).

The Supreme Court held that the 2% transfer tax rate applied in this case.


KPMG observation

The decision is favorable for the real estate market. It appears that with this decision, an acquisition of an apartment right in a converted property (intended for habitation) would be subject to transfer tax at a rate of 2% (instead of 6%).

Read a December 2019 report prepared by the KPMG member firm in the Netherlands

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