Changes in WOZ value and notional rental value

In this article, we are covering the changes to WOZ values and notional rental values in 2022. 

WOZ waarde, or property valuation

As of January 1st 2022, a big change has been made in the property valuation calculation. This affects over 5 million homes in The Netherlands across 250 municipalities.

Rather than taking the gross total content of the home into consideration, the new WOZ waarde is calculated based on usable area, or gebruiksoppervlakte. This means a shift to the property valuation system commonly used by real estate agents and appraisers to ensure that there is a better synergy between the two.

Municipalities will take January 1 2022 as the valuation date to determine the property valuation of any given property. The appraiser or real estate agent valuation report includes factors such as square meterage, the location, the type of property, how well the property is maintained, and the market value, among other things. This new valuation is intended to be a more accurate value of the property.

Eigenwoningforfait, or notional rental value

The Dutch tax authority sees homeownership as a type of income and so homeowners must add a taxable amount — namely the eigenwoningforfait (or notional rental value) — to their income. The notional rental value is calculated as a percentage of the property valuation (or WOZ value) of your house.

A change in rules for the notional rental value in 2022 means that houses with a value between 75,000 and 1,130,000 falls from 0.5% to 0.45%.

Let’s take the average Amsterdam WOZ value of € 422,058.

Your notional rental value is 0.45% x € 422,058 = € 1,899.

You must add the notional rental value of € 1,899 to your Box 1 income on your tax return. So if your income is €56,000 in 2022, you’ll have to actually submit €57,899 in Box 1 of your 2022 income tax return.

To make sure that you fully understand what you can expect from these new rules, it’s always good to have a mortgage adviser on your side. Contact us today and Arjen will be happy to answer any questions.