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s of January 1, 2025, the Dutch real estate transfer tax (RETT) will apply more frequently to share acquisitions in Dutch real estate companies, impacting business cases due to its non-recoverable nature. This change is particularly relevant for newly built residential projects and properties leased out exempt from VAT.

    The Dutch RETT system has a general rate of 10.4%, with a reduced rate of 2% applicable only to the acquisition of a residence by its prospective homeowner. The legislation allows for exemptions and facilities, such as intragroup reorganisations and acquisitions of newly built real estate, subject to conditions.

    Real estate companies will also be subject to RETT on share acquisitions, which previously enjoyed an exemption similar to asset deals. This change aims to address the discrepancy in tax burdens between share and asset deals.

    A typical scenario where neither VAT nor RETT was due involved the sale and transfer of shares in a real estate company owning newly built residential property. However, this discrepancy in tax burden is targeted by the new legislation.

    As of January 1, 2025, the acquisition of shares in a real estate company holding newly developed real estate will be subject to a 4% RETT rate, approximating the tax burden if the underlying real estate had been transferred in an asset deal. The RETT exemption for newly built properties will continue to apply if 90% or more of the property's use allows VAT deduction for at least two years.

    Investors may need to perform extra bookkeeping for tax purposes. A transitional law applies, subject to conditions and upon request, to projects notified to the Dutch tax authorities prior to April 2, 2024.

    For planned share deals, it may be wise to bring forward the legal transfer of shares to this year to avoid additional taxation or bookkeeping requirements. In situations where commercial terms are agreed but financing is not in place before the end of the year, a Groninger Akte can facilitate a legal transfer in 2024 with payment at a later date, allowing the current RETT regime to be taken advantage of.