Finance

Lowering landlord levy threatens to go up in smoke due to WOZ increase

Substantial pressure was needed from the House, but in the end it was decided that the landlord levy so hated by housing associations will be reduced by 500 million euros next year. The landlord levy is the tax that social landlords with more than fifty social rental homes have to pay.

This tax is a thorn in the side of corporations and many political parties because it means fewer social rental homes can be built. The housing associations are also unable to make rental homes more sustainable and keep rents less affordable.

Shame

Many parties argue for a total abolition of the tax, but in the end it was decided to reduce it by 500 million euros. However, even that reduction may not be of much use in practice.

Marcel Trip of the Woonbond thinks it’s a shame. “If there is a reduction after so much political and social pressure, and in practice there is hardly any reduction. Then you show that all renters do not take it seriously and abandon it.”

900 million just another 1.4 billion

The fact that little of this reduction will come to fruition is as follows. The landlord levy is a so-called target tax, which means that the cabinet determines in advance how much money they want to collect with the tax. For 2021 this is 1.4 billion euros. The reduction is due to the fact that the cabinet wants to collect 0.9 billion from the landlord levy before 2022.

But because of the way the tax is levied, that may not be the case. In short, housing associations pay a percentage of the total WOZ value of their housing stock to landlord levy. Lowering that percentage threatens to be completely negated by the rising WOZ value.

‘Bizarre’

“That is of course bizarre,” says Marcel Trip. “It should come as no surprise that the WOZ is rising in this housing crisis. That calculation has to be corrected for that. We fear that otherwise 1.4 billion will be paid.”

The association of housing associations AEDES agrees. “We want to see the landlord levy completely abolished, but as long as it is still there. Then you have to freeze the WOZ value for housing associations. Otherwise they will pay more and more.”

SP MP Sandra Beckerman wholeheartedly agrees. She also wants the calculation of the tax to be adjusted as soon as possible. “Otherwise, the corporations basically just pay the amount as it was budgeted.”

Ministry confirms

The Ministry of the Interior confirms that the reduction could be lower in practice. In a written statement, the ministry says that the tariff reduction in 2022 will ensure that the revenue is 500 million lower. But that this is ‘apart from uncertain factors such as the WOZ increase and the tax reductions’.

These are the same uncertain factors that caused the landlord levy to be higher this year.

‘Reduction actually only 100 million’

This year, housing associations are expected to pay 1.8 billion euros in landlord levy, more than 400 million euros more than the 1.4 billion that the cabinet actually wanted to collect.

If you consider that corporations have actually paid much more than intended this year, the announced reduction of 500 million euros is in any case a cigar from its own box, the SP believes.

“Because 411 million more was paid this year than intended, there will only be 100 million euros left of that reduction next year,” says Beckerman. And on top of that is the increase in the WOZ value.

General Financial Considerations

The General Financial Review is scheduled for next week. The 2022 budget plans will be discussed further there. The SP is going to raise this issue. “All parties except the VVD have said during the elections that they want to abolish the landlord levy. Then it cannot be the case that we now settle for a reduction, let alone one that is not actually a reduction,” says Beckerman.

How is the landlord levy calculated?

The landlord levy is based on the WOZ value. The WOZ value of all social rental homes owned by a social landlord is added together.

An average WOZ value is then calculated.

That average is deducted 50 times from the total WOZ value of the homes owned by the social landlord. The corporation must pay 0.526% of the amount resulting from this calculation as a landlord levy.

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