Current State of Property WAARDERINGSKAMER Taxation in the Netherlands Council for Real Estate Assessment (English) Waarderingskamer (Dutch)
Council for real estate assessment Main task: quality control of mass valuation Involved parties municipalities (390) polderboards (23) national revenue office Council board has 11 members Staff 20 persons Minister of Finance is responsible
Act for real estate assessment Formal base for the Council for Real Estate Assessment the assessment of all real property only for the assessment not for the taxes In Dutch: Wet WOZ Start was in 1995
Act for real estate assessment Activities 390 municipalities responsible for appraisal 8 million properties to be appraised annually owners and users are officially informed part of municipal tax bill Assessed values kept in Base-register Base-register for taxation and other uses Quality control by Waarderingskamer
Council for real estate assessment Set out guidelines administration valuation quality control procedures Perform audits Publish results
Base-register of values The municipality register the assessed value of all properties This is the base-register of value in Dutch: Basisregistratie WOZ This is one of the formal base-registers There is one central access for all clients (under construction)
Use of base-register of values Municipalities, polderboards, central revenue office use register for levying taxes notary office, mortgage banks use for prevention of real estate fraud "Minister of Housing" Maximum rent for social housing
Base-registers in the Netherlands Base-registers related to (the value of ) real estate Cadastral registration Registration of buildings Registration of addresses Registration of inhabitants Registration of non-inhabitants (foreigners) Registration of companies Large scale base maps Value of real estate
Base-registers in the Netherlands
Valuation / appraisal International Valuation Standards Market value The estimated amount for which a property should exchange on the date of valuation between en willing buyer and a willing seller in an arm's-length transaction after proper marketing wherein the parties had each acted knowledgeable, prudently, and without compulsion Mass appraisal
Valuation / appraisal Residential property value based on comparable sales Non-residential property: highest of: market value (mostly based on rent prices) reproduction costs
Mass appraisal 8 million properties valued annually Done by municipality or private firms Computer assisted mass appraisal (CAMA) different types of models availability of market data type of property and comparability of property market competition
Yearly revaluation Before Act for Real Estate Assessment most municipalities had revaluation 5 year The Act started with every four year valuation 1995 used for taxation 1997-2000 revaluation 1999 for taxation 2001-2004 revaluation 2003 for taxation 2005-2006 And now: revaluation 2005 for taxation 2007 revaluation 2007 for taxation 2008 etc.
Why yearly revaluation Explanation to taxpayer WAARDERINGSKAMER large increases in "booming market" worry about falling market Reduce the number of appeals 009% 008% 007% 006% 005% 004% 003% 002% 001% 000% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Why yearly revaluation Explanation to taxpayer Reduce the number of appeals Efficiency WAARDERINGSKAMER 25 20 15 10 5 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
CAMA systems systematic and direct comparison with other property (that has been sold recently) statistical clusters case based reasoning calculating models (like MRA-models) results: assessed value valuation report
Assessment of values WAARDERINGSKAMER Taxpayer gets official notification of value part of municipal taxbill Appeal: if taxpayer considers assessed value incorrect: first: municipality court (tax judge, first phase) court (tax judge, second phase) last phase: high court
Appeal In 2014 there were: 1,6% appeals (100.000) for municipalities In 2013 about 10.000 cases in court Council for real estate assessment is not involved in appeal procedures About 25% of total costs for appeals
Assessment / appeals WAARDERINGSKAMER Our goal: clear valuation report to explain value avoid official appeals: easy contact by internet contact between taxpayer and assessor by phone appointment at municipal office appraiser comes to see the property
Valuation report Taxpayer receives valuation report by internet
Data used for valuation Cadastral information ownership, selling prices plot size Registration of buildings type, size and building year building activities Data collection for valuation WAARDERINGSKAMER quality of materials, maintenance situation, etc.
Fiscal use of register of values Assessed values are used for Municipal real estate tax Real estate tax polderboards polderboards take care of dry feet State taxes: Imputed income for owner occupied houses (Income tax) Tax for large scale owners of rented houses Limits fiscal depreciation of real estate (Corporation tax) Inheritance tax
Municipal real estate tax for residential property: only owner pays taxes tax rate (average) 0,2% of value tax for average house 400 for non-residential property: both owner and occupier taxed tax rate (average) 0,2% + 0,2 % exemptions: WAARDERINGSKAMER agricultural land, public roads, churches, nature
Real estate tax polderboard only for owner only for built property land is taxed based on area tax rate (average) 0,05% of value tax for average house 50 100% of financial means from taxation
Central government Income tax (imputed income of house) 0,60% of value is added to your income tax for average house 700 Corporation tax depreciation can be deducted from profit but no deduction beyond 100% or 50% of value Inheritance tax for houses the assessed value is used rates from 10% (children etc.) to 40 %