The importance of a correct provisional assessment 2019
In early 2019, provisional personal and corporate income tax assessments were imposed. If an additional payment still has to be made on the final assessment 2019 (and the provisional assessment was therefore too low), interest will be charged on the amount to be paid as from 1 July 2020. For personal income tax purposes, an interest rate of 4% will be charged. For corporate income tax an interest rate of no less than 8%.
If a request is made before 1 May 2020 to amend a provisional assessment, this will in principle be imposed before 1 July 2020 (date of commencement of possible interest).
In order to avoid interest, we will review our client files in March to check, where possible, the correctness of provisional assessments imposed in 2019. However, it is impossible for us to determine all provisional assessments correctly, as we often do not (yet) have all the information. That is why we urgently request our clients (herewith) to contact us in March, if they feel that provisional assessments have not been imposed to the correct amount.
WOZ decision 2020
At the end of this month, the municipality will send you the WOZ decision for 2020 (value level date 1 January 2019). The WOZ value is an important factor for various (fiscal) regulations. For example, the WOZ value is important for the owner-occupied home allowance in Box 1 and for the valuation of a second home in Box 3. For gift and inheritance tax, the WOZ value also plays a role. In the case of companies, the WOZ value serves as a benchmark for the extent to which the property can be depreciated.
Check the WOZ decision carefully. If the WOZ value appears to be too high, file an objection within 6 weeks of the date of the assessment notice.
When entering into a new interest rate contract with the bank, the bank will look at the amount of the WOZ value, among other things. A lower WOZ value may in that case be disadvantageous. In that case, we advise you to have a valuation report drawn up. In principle, the costs of the valuation report required for entering into a new interest rate contract are deductible in your income tax return.
Revision of current mortgage interest rate
If the value of the property has increased compared to the time of taking out the mortgage loan, we advise you to ask your bank to reduce the risk premium on the mortgage loan. And have you considered revising the contractual mortgage interest rate? If, in your opinion, the current mortgage interest rate will not fall any further and you expect the mortgage interest rate to be higher than this current interest rate at the end of your current fixed-interest period, it may be wise, despite the penalty interest due, to adjust the mortgage interest rate and the fixed-interest period. If you have any questions about this, please contact us.