In the world of personal finance, every euro counts. That’s why it’s crucial to understand how things like WOZ (Waarde Onroerende Zaken) can influence your household finances. In this article, we will explore how a higher WOZ may not be as bad as it seems at first glance, and in fact, it can save you a good amount of money!
The Importance of WOZ
The WOZ is the valuation that the municipality makes on your property, and serves as the basis for calculating taxes and fees related to housing. This year, in particular, past years have seen an average increase of 17% in the WOZ, which might scare more than one. However, there are positives to consider.
Benefits of a higher WOZ
Contrary to what you might think, a higher WOZ can lead to a decrease in your mortgage interest rate. This is because a higher valuation can improve the relationship between the value of your property and the amount of the mortgage, resulting in a lower perceived risk on the part of the lender and, therefore, a lower interest rate.
IMPORTANT: THIS IS ONLY VALID FOR MORTGAGES WITHOUT NHG(Nationale Hypotheekgarantie)
For example, if you borrow 100% of the value of the house, you enter a higher risk class than if you only borrow 65%. Thus, each risk class corresponds to a certain interest rate: the higher the risk, the higher the interest rate.
For example, your initial debt was 300 thousand euros (because that is what the house cost) and after 5 years your debt is 259,500, that is 86% of those 300 thousand euros. Let’s suppose that the letter arrives with the new WOZ and the house now costs 400 thousand euros, then that debt of 259,500 corresponds to 64.8% of the value of the house, this means that you could enter a lower risk class and get a lower interest rate.
A lower interest rate means lower monthly payments on your mortgage, which saves you money in the long run and improves your financial situation.
What should you do to lower interest rates?
If you notice that the WOZ on your property has increased, it’s a good idea to talk to your mortgage advisor to determine if you qualify for a lower interest rate. They will be able to guide you through the process and help you maximize your savings.
Many times this can be done directly on your bank’s portal. You can look it up as Renteopslag, the bank will ask you to show the document with the value of the WOZ and they will determine how much the rate goes down.
What if I think the WOZ is too high?
If you disagree with the valuation of your property, you can file an objection with your municipality. This is free of charge and must be done within 6 weeks from the date of the notice. The WOZ document indicates how to file an objection with the municipality. It is not necessary to involve law firms as you can do it yourself. Before doing so, you can request a valuation report from the municipality. It explains exactly how the value of your house has been determined. In this report you will also often find sales figures of other houses or homes comparable to yours.
The municipality will respond to the claim within the relevant tax year. There can be three outcomes: the objection is approved and the value of the property is adjusted, the objection is partially approved and a counteroffer is made, or the objection is rejected and can be appealed to court.
In some municipalities, you can also file an informal objection against a WOZ appraisal. In that case, you can re-examine the WOZ value together with an appraiser. Municipalities often offer this possibility because it can save you a lot of red tape (both for you and for the municipality itself). If you do not agree with the appraiser about the valuation of your house, you can, of course, object by means of a notice of objection.
You will have to make the objection in writing, you can use a model letter like the one below. There are also model letters on the internet, it’s just a matter of searching.
Carta modelo para objeción WOZ (42 downloads )Conclusion
In short, a higher WOZ is not necessarily bad news. It can give you the opportunity to save money on your mortgage and increase the value of your property. However, it’s crucial to be vigilant and make sure the valuation is accurate. With a little planning and professional consultation, you can make the most of your home’s value.
Are you curious to compare the current interest in the different mortgage providers or if it is interesting for you to switch mortgage providers? Then a mortgage comparator in the Netherlands such as Hypotheek-Rentetarieven.nl can be an invaluable tool.
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