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WOZ: Property valuation

26 May 2011, by Jose de Boer

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The municipality is the executor of the WOZ law, which forms the basis of the calculation of certain municipal taxes such as property tax, income tax and water charges.

Every year (January or February), home-owners receive a new assessment of the WOZ (Waardering Onroerende Zaken, best translated as “Valuation of Property”) value, which is valid for one year unless one objects.

You will receive the WOZ assessment if you are the owner of the property on January 1 whether you live in the property or not. In case you own the property with someone else (e.g. partner), you can apply for two assessments (special request).

  On a national scale, WOZ values have dropped 2,3% (on average) in relation to the previous year but the actual increase or decrease can differ from region to region, while, according to the general expectation, the results of the credit crunch crisis (August 2008) should be visible now.

Therefore, objecting to the new value (within six weeks) is advised if you have doubts. Apparently, this makes sense only if you believe that the WOZ value is too high.

Taxes related to the WOZ value
› Property Tax (Onroerendezaakbelasting)
Property tax depends on a certain percentage of the WOZ value. This percentage is determined by the municipality and therefore, varies from city to city.

› Income Tax (Eigenwoningforfait)
As far as the Tax authorities are concerned, a home-owner enjoys a fictitious income in box I. In other words, a percentage of the WOZ value (0,55% for most homes) is added to your taxable income.

amsterdam canal houses
Photo by Flickr user jasminejennyjen

For instance, if the value of your home is 300.000 euros, the fictitious income is 300.000 x 0,55% - 1.650. Consequently, part of your annual interest payment is not tax deductible.

Following the same example, the numbers might look like this: Mortgage 300.000 euros; Interest rate 5%; 300.000 x 5% - 1.650 = 13.350 euros (i.e. 13.350 euros tax deductible instead of 15.000 euros). So, if the WOZ value is too high in relation to the market value, it could be to your advantage to contest the value.

› Water and sewer charges
Water and sewer authorities (Waterschap) are responsible for these charges while the rate differs from region to region and the different tasks that local authorities have to fulfill.

› Inheritance tax
 Depends on the WOZ value but this will not be discussed further in this article.

Jose de Boer is an Expat Service Provider who helps internationals to feel at home in the world of Dutch finances. For inquiries and / or remarks, feel free to comment below or contact her directly.

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