Many countries offer financial support to young buyers to make homeownership more easily accessible for the next generation. A high-profile policy in this respect was the 2021 Dutch “starter tax exemption” (startersvrijstelling OVB), which waived the standard 2% real-estate transfer tax for homebuyers under 35. The idea was simple: lower the barrier to entry for young households who are often argued to be squeezed out of a hot market. However, a new study by Max Löffler and Jonas Wogh from Maastricht University reveals that while the policy sparked substantial additional housing transactions, it failed to actually increase the number of homeowners.
Rising number of housing transactions – but not a rising number of homeowners
The researchers found that while housing transactions among young buyers doubled in the first three months after the policy introduction, the surge was largely an illusion of timing. Many homebuyers rushed to trade during this initial period, as the tax exemption did not yet have a price cap. But also after the first three months, when the exemption applied only to houses below €400,000, most transactions did not bring new people into the market. Instead, the exemption primarily encouraged existing homeowners to “trade up” or prompted buyers to rush their purchases just before their 35th birthday. Moreover, the study estimates that 65% to 90% of the tax savings were capitalized into higher house prices. An important part of the subsidy meant to help young buyers thus ended up in sellers’ pockets.
The policy’s beneficiaries are not the one’s who the policy was intended for
Ultimately, the policy’s winners weren’t those who most needed financial support. Among the lowest-income households, homeownership remained largely out of reach, also with the tax exemption. In contrast, those with very high incomes did not benefit because they typically buy homes above the policy’s price limit. Therefore, the policy’s main beneficiaries were those in the upper-middle class.
Full reference
Löffler, Max and Wogh, Jonas, Supporting Young Homebuyers (December 22, 2025). Available at SSRN: https://ssrn.com/abstract=5959575 or http://dx.doi.org/10.2139/ssrn.5959575