In 2021, for the first time since 2013, investors bought fewer homes than in the previous year. That appears from an investigation that the Land Registry published on Tuesday. Starters bought more houses in the same year. In the previous ten years, the number of homes that investors bought per year increased to 88,000 – in 2021 that number fell to 51,000.
The Land Registry largely attributes the shift to adjustments to the transfer tax, which came into effect from 1 January 2021. For investors, the tax rose by 8 percent under the new rules. Home buyers under the age of 35 no longer had to pay tax of 2 percent of the purchase price of their house. Four months later, the 2 percent was reintroduced for homes more than 400,000 euros.
Shortly after the changes to the transfer tax, it turned out that they caused a large increase in the number of buyers under the age of 35. The transactions further pushed up the price of owner-occupied homes. In addition, the rule was also used differently than intended by the government: not only starters, but also many transfer students under the age of 35 made use of the ‘start-up exemption’.
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