The selling price and the WOZ value of a property: here's the difference

What is the difference between the selling price of your home and the WOZ value (Property Valuation Value)?

We often hear this question, and we would like to clarify it once and for all.

What is the WOZ-value?

To understand the difference between the selling price and the WOZ value of a property, it is essential first to explain what the WOZ value actually is. The WOZ value of a property is the estimated market value assigned by the municipality for tax purposes, such as property taxes (OZB).

How is the WOZ value determined?

The WOZ value is calculated annually by a municipal computer model based on a few general characteristics of your home and the selling prices of comparable homes in your area. This calculation is made to determine how much tax each property owner must pay. For instance, they consider living area, construction year, and location. If the property is in a popular neighborhood, this may be reflected in the WOZ value. Conversely, if the property is next to a highway in a suburban area far from the center, this will also affect the WOZ value.

You can check this for free via the WOZ Value Register. If you disagree with the value determined by the municipality, you can file an objection.

Not airtight

The WOZ value does not account for individual property features and is, therefore, not foolproof. Have you recently installed a new kitchen or added that luxurious whirlpool bathtub in the bathroom? These improvements are not considered in the WOZ valuation. As a result, the actual value of your home is often significantly higher than the established WOZ value. If you plan to sell your home, we recommend having a valuation report prepared, which will consider all these details. Read our blog: Valuation of your house: How to determine the value of your home.

Another drawback of the WOZ value is that it is always a year behind because there is only one valuation date per year. For example, if you receive a WOZ assessment in February 2021, it will state the value of the property as of January 1, 2020.

WOZ-value vs. market value

1. Purpose of valuation:

WOZ-value: The WOZ value is set by the municipality and is primarily used as a basis for levying local taxes, such as property tax (OZB). As a result, the WOZ value is often lower than the selling price.

Marketvalue: The market value is the price at which a property can be sold in a free market transaction. It is based on supply and demand and represents the actual value in the real estate market.

2. Valuation method:

WOZ-value: The WOZ value is often determined by the municipality based on objective characteristics such as location, size, and construction year of the property, but it is a standardized estimate.

Marketvalue: The market value is influenced by more subjective factors, such as the current condition of the property, specific features, and general economic conditions.

3. Frequency of valuation:

WOZ-value: The WOZ value is recalculated annually by the municipality.

Marketvalue: The market value can fluctuate continuously based on changes in the real estate market and is usually only determined during a sale or valuation.

4. Timeliness:

WOZ-value: he WOZ value is always a year behind.

Marketvalue: The market value is based on the property's current state and value and can be reassessed at any time.

5. Influence of local factors:

WOZ-value: Can be influenced by local policy decisions and the municipality's valuation methods.

Marketvalue: Is influenced by both local and national factors, such as economic trends, employment opportunities, neighborhood amenities, and specific property features that attract buyers.

Is the marketvalue higher then the WOZ-value?

Often, the market value of your home is (much) higher than the WOZ value suggests. The WOZ value is primarily used as a guideline for tax purposes, which is why it is almost always lower than the selling price.

If you want to know the market value, it is best to have a property valuation done. A valuation report considers many factors that are excluded from the WOZ valuation. As a result, the market value of your home often turns out to be thousands of euros higher than the WOZ value. You then use the market value as the basis for setting a selling price, often in consultation with your real estate agent.

The biggest advantage of obtaining a valuation report when selling your home is that it provides an objective and professional estimate of the market value. This report instills confidence in potential buyers regarding the pricing and can facilitate the negotiation process. It also helps avoid overpricing or undervaluation, increasing the chances of a successful and smooth sale. A thorough valuation report provides a solid foundation for transparent negotiations for both buyers and sellers..

Does the WOZ value affect the selling price?

No, the WOZ value does not directly affect a property's selling price. The WOZ value is a rough estimate and not very useful if you want to know the true value of your home. To determine the true value of your home, the best course of action is to get a valuation report. The WOZ value primarily considers factors like living area, construction year, and location. A valuation report provides a detailed estimate of a property's market value, considering all factors that could influence the asking price.

The selling or asking price of a property does not always have to be entirely based on the market value and the valuation report. Other factors also play a role, such as housing market demand. If demand exceeds supply, the selling price will naturally increase and ultimately exceed the WOZ value. Additionally, the emotions of both buyers and sellers play an important role. If you've set your sights on your dream home, you're often willing to make a higher bid.

In summary: The WOZ value is a rough estimate and not very helpful if you want to know what your house is really worth. It's better to use the valuation report as an indication of the selling price. An advantage of a low WOZ value compared to the selling price is that your property tax (OZB) will be lower.

WOZ: Don't give it too much importance

The WOZ value is calculated using a computer model based on outdated selling prices of partially comparable houses in the area.

The municipality does not consider the unique aspects of your home when determining this value. Additionally, the WOZ value is always a year behind, so the most recent developments in the housing market are not reflected. In other words: the WOZ value might be interesting, but it's not very useful when buying or selling a house.

Can we help you with a free valuation? A certified appraiser will visit you and tell you exactly what your home is worth!