Finance
Mar 9, 2023
Unexpectedly high WOZ valuation? Start protesting, it could save you a lot of money!
Many homeowners have been taken by surprise by their latest WOZ assessment via the municipality they are living in, with their home's value often tens of thousands of euros higher than the previous year. While some may consider filing an objection, it might be wise to hold off. Surprisingly, this could lead to potential savings. Curious? Keep reading!
Your home's WOZ valuation affects the amount of municipal taxes and levies you pay. The higher the value, the higher the tax. Naturally, it's quite alarming to discover your home is suddenly worth 20% more than it was a year ago. But does this mean you'll pay 20% more in taxes? Not necessarily. That's because most municipalities have actually lowered their tax rates. Take a look at last year's tax bill. You'll probably only pay a few tens of euros more this year.
Example WOZ calculation
The WOZ value of John's house has increased from € 376,000 to € 453,000. That's a difference of € 77,000, or 20.4%. Last year, John had to pay a total of € 868 in municipal taxes and levies. In 2023, it will be € 935. The difference is € 67 per year, or 7.7%.
Save hundreds of Euros with higher WOZ
So, how can you save money when you're facing a higher tax bill? Here's how. Many homeowners without a mortgage backed by the National Mortgage Guarantee (NHG) pay a risk premium on their mortgage rate. This premium depends on the size of the mortgage and the home's value. Simply put: the higher your home's value, the less risk premium you pay.
For instance, if you bought a home in 2020 for € 350,000 and took out a mortgage for that amount, you may have to pay an extra 0.45% or more in mortgage interest. If your home's value has increased by 20%, the risk premium could drop by up to 0.15%. That's a potential gross saving of € 525 a year on a € 350,000 mortgage!
But there's a catch: some lenders automatically adjust the risk premium to reflect the current ratio between your loan and the home's value. However, you'll often need to ask the bank to lower the premium yourself. Your mortgage provider may ask for your WOZ assessment.
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