In a previous blog, we discussed the meaning of the WOZ value and when it applies to you. We also listed the advantages and disadvantages of a (too) high WOZ value and told you what that means for you. But what if the WOZ value is not high but low? Are there advantages and disadvantages?
First this: WOZ stands for Wet Waardering Onroerende Zaken. The value of a property is determined by municipalities and forms the basis for municipal taxes and levies.
The following three government bodies use the WOZ value to calculate taxes:
In addition, the WOZ value also partly determines the price of a rental home in the social rental sector. The rent will be higher if the house has a high WOZ value.
The WOZ value is officially called the WOZ decision. It contains - at least - the name and address of the recipient, a date, designation of the property.
In a determination, the municipality evaluates sales prices paid for comparable homes around the value reference date. The value reference date is in the past, this gives municipalities time to check sales prices thoroughly. The WOZ value you will receive in 2023 is the value reference date of January 1, 2022.
To determine the WOZ value, municipalities look at the value of other houses in the same neighborhood that were sold in the previous year. An appraiser employed by the municipality looks at the type of house, its condition, and its location. What comes out of that is the house's market value, the starting point for the WOZ value. The WOZ value estimates the sales price on the value date. This definition of market value has been established internationally.
The difference between the sales value of a house and the WOZ value can be significant because the WOZ value needs to catch up by a year. This can be due to several things, such as recent renovations or rising home prices in a hot housing market. In addition, higher asking prices can come from a higher market value, among other things. This all affects the big difference between the WOZ value and the (sales) price of a house.
In addition, the WOZ value looks at all houses for sale, so not individually at each house. We call this a systematic comparison; municipalities compare and value a large number of homes at the same time using a computer model. In short, the main reason for this is the lack of time and money.
The lower the WOZ value, the less you have to pay.
Yes, it does. If the WOZ value is lower, you can save quite a bit on taxes and fees. As discussed earlier, municipalities use the WOZ value to determine the amount of property taxes (OZB). How high or low the levies are varies by municipality. But with all of them, it depends on the house's value.
The tax authorities use the WOZ value to determine income tax, the owner-occupied home tax credit. This income tax adds to your income and reduces your tax benefit from your mortgage interest deduction. So the lower the WOZ value, the less you have to pay.
"So does a high WOZ benefit the municipality?" you might ask yourself. The answer to that: no. This is because tax revenue is determined by the rate set by the city council. Therefore, the municipality has an even greater interest in a low WOZ value. They then receive fewer appeals and therefore have lower costs.
So, the lower the WOZ value, the less you pay. But there are also differences in the types of homeowners and their costs.
'Normal' homeowners With a high WOZ value will have to pay too much income tax. That's because the owner-occupied home tax credit becomes excessive, which means you'll get less interest deduction. But, of course, you don't want that.
Then a low WOZ value is beneficial. For example, suppose your mortgage decreases by €10,000 after an objection to the WOZ value, then your owner-occupied home value decreases by €30. With a €20,000 decrease, that amount doubles.
In addition, as a homeowner, you also pay taxes based on the WOZ value. If this is reduced by €10,000, you will also easily save €5 to €30 on your taxes. This mainly concerns property tax (OZB) and water board tax.
Homeowners with a second house If you own not one but two houses, you will have to pay a lot of property tax if the WOZ value is high. In addition, you will then pay capital gains tax on the WOZ value.
The advantage of a low WOZ value with a second home is the savings on commuter tax. You pay commuter tax if you spend a relatively large amount of time in a municipality, but are not a resident. You then contribute to the municipality's facilities. This could contribute to the municipality's general level of amenities.
Inheritors A high WOZ value means more tax, and this is especially disadvantageous if you inherit a house. Inheritance tax will cost you at least €0.10 over every euro of the WOZ value, on top of the exemption. As a cousin, you pay at least €0.30.
This depends entirely on your situation. If you are going to sell your house, a low WOZ value is not necessarily excellent. A higher WOZ value can convince buyers that your house is worth a lot. A lower WOZ value might do the opposite.
Also, a low WOZ value allows for more benefit from your mortgage interest deduction. A low WOZ value positively influences the amount of your mortgage interest. Decide for yourself what is important to you.
Due to a lack of time and money, it often happens that the WOZ value needs to be determined accurately by municipalities.
You don't have to do anything, but it may be wise to check the WOZ value of your home. A high or low WOZ value can significantly affect the levies and taxes you must pay. It can even save you hundreds of euros.
Due to a lack of time and money, it often happens that the WOZ value is determined inaccurately by municipalities. As a result, more than 100,000 WOZ values are adjusted every year. This can hardly be otherwise since it is common for WOZ values to be based on estimates.
You can check your WOZ value in several ways. The municipal assessment report shows how the WOZ value is constructed. Also, check the sales prices of comparable homes in the neighborhood, which you can easily find on Walter Living.
If you disagree - for any reason - with the amount of the WOZ value, you have six weeks to object. It can save you a lot of money. Want to know how to do this? Contact Walter Living and see what we can do for you.
Bij het kopen van een huis gaat het niet alleen om het vinden van de perfecte woning, maar ook om het navigeren door het complexe aankoopproces. Gelukkig is er Walter, jouw betrouwbare digitale aankoopmakelaar die je helpt bij elke stap die je moet nemen.
Vroeger, toen de melkflessen nog van glas waren, ging je met een stapel papier onder de arm naar de hypotheekadviseur. Dit kan nog steeds, maar je kunt soms ook zelf een hypotheek afsluiten. En dat is makkelijker dan je denkt. Mits je goed bent voorbereid.