Do you live in a house for sale?
Then you will receive the new WOZ value of your home at the beginning of the year.
This 'value of real estate' is estimated by your municipality.
However, this regularly turns out to be too high.
And with that, various taxes and levies are automatically too high and that costs you unnecessary money, which is a shame.
See in 2 minutes whether you could object and thus save money, up to 500 US dollars per year and in specific cases much more than that.
To start with the most important information: how can you lower your WOZ value? It is important to realize for this that the value is no more than an estimate from your municipality. It is not that they come to see your house, but they are really just doing a calculation.
Often this is no more than an indexation of the value that was known last year. And that is based on the year before and so on. And that can sometimes go wrong over the years. Once a mistake and every subsequent year it only becomes a bigger gap.
Because there is in fact no burden of proof or research being done, but the outcome is at the same time an important indication for many financial settlements, you can object to this with your municipality. The value is then reconsidered.
If there is one, they submit a request for reconsideration and deal with everything further with the municipality. You don't have to do anything or even pay anything . If the objection is well-founded, the municipality must pay the legal costs. If it does not work, that is the risk for the Vastelastenbond.
The WOZ value of your home is very important and it is actually strange that few people realize this. Many costs are calculated on the basis of this amount. Taxes and fees that people think they should just pay without nagging, but that's not the case.
To begin with, the municipality itself uses the value that they themselves write down to determine the property tax, real estate tax. They charge a percentage on this that they can also determine themselves. That can vary considerably, for example, in 2021 you will pay only 0.04% on Texel but no less than 0.2779% in Oldambt. That is almost 7 times as much. Unfortunately, you cannot dispute this percentage, but your home value can.
Example for an owner-occupied house of 250,000 US dollars: You pay 0.128% tax on the value as a home owner in your municipality. You then pay 320 US dollar property tax per year. For every ten thousand that you manage to get rid of the WOZ value, you save $ 12.80.
Then it is also the case that in some municipalities the waste tax and sewerage tax depend on the WOZ, although that is not always the case anymore. Nevertheless, you can possibly also save money on this. These are also percentage calculations.
If you submit your annual tax return to the tax authorities, you will see that you “earn income from your own home”. That sounds crazy, but it is the technical designation of the notional rental value. In short, you have to pay money because you have your own house.
Now this is deducted from your deductible expenses such as your mortgage interest so that you don't actually notice it, but it still costs you money. 0.5% of the WOZ value to be precise.
Back to the example of an owner-occupied home of 250,000 US dollars: your notional rental value will then be 1250 US dollars per year. So here you save $ 50 for every 10,000 that your WOZ is adjusted downwards.
These taxes have the same rates and come into play when a home is donated or inherited after death. The basis here is again a WOZ. And because the rates here, depending on the relationship of the recipient with the donor / deceased, run from 10% to 40%, the advantage of a lower value can be many times greater than the aforementioned taxes.
For again the same house of 250,000 partners & children pay no less than 32,868 US dollars in tax. A ten thousand US dollar lower value saves $ 2,000 in tax. As a grandchild in the same situation, you would make a difference of $ 3,600 and as an other beneficiary even $ 4,000.
In other words, there are also situations in which a higher WOZ value can be advantageous for you. To be specific, this can occur in 3 situations where the savings in taxes and levies do not outweigh other benefits:
If you sell your house, a higher WOZ value can actually help you in the price negotiation. Buyers look at this anyway. Not only as an extra confirmation of the actual value, but also for their chances of obtaining a mortgage for the requested purchase price.
If you want to apply for a second mortgage on your home on the accrued equity, there are banks that are satisfied with the valuation of the municipality and you do not have to have a valuation carried out. A higher amount means that you have a greater chance of that mortgage and / or you can even request a higher credit.
You pay interest on your mortgage, we don't have to tell you that. But this often includes a risk premium, especially if your mortgage was higher than the value of your house when you bought it. If the value of your home increases over the years, the risk for your mortgage lender becomes small and that surcharge may even be canceled completely. Sometimes just a call to the bank is enough to arrange this, while you can still save a lot for the rest of the term.