How is the WOZ value assessed?

In short

The WOZ-value is the market value of your property on the valuation date. Two valuation rules apply to assessing the WOZ value. These two valuation rules are stated in the Wet WOZ (Act for Real Estate Assessment) to ensure uniformity. These rules are explained on this page.

Municipalities register the characteristics of houses and other properties to be able to appraise houses. It is equally important that municipalities analyze sales prices. Municipalities use these sales prices and property characteristics, municipalities to set up a valuation model, with which the WOZ-value is appraised.

As a final step, an appraiser always checks whether the outcome of the valuation model is correct before the final WOZ value of your house is announced to you.

The WOZ value is the market value of your property

The WOZ-value is the best possible estimate of the possible selling price of your home on the valuation date. This possible selling price is also known as the market value. The definition of market value has been established internationally.

Valuation rules for the WOZ value

When your house is assessed, the two valuation rules from Article 17 of the act (Wet WOZ) are taken into account. These valuation rules, or valuation assumptions, consist of the transfer fiction and the acquisition fiction.

The transfer fiction states that the WOZ value does not take into account leasehold or other restrictive rights that may apply to a property. Normally, leashold can reduce the market value of a property. However, this is not taken into account for the assessment of the WOZ value: it is assumed that the property has no leasehold.

The acquisition fiction states that the WOZ value does not take into account that a property is rented out. When a property comes on the market, the presence of tenants can influence the sales price. When assessing the WOZ value, the presence or absence of tenants in the property is not taken into account.

Value reference date and condition reference date

When assessing the WOZ value, the value reference date (in short: valuation date) and the condition reference date are also taken into account.

The value reference date represents the date of the market value being estimated. This is always January 1 of the previous year. The value reference year can have a major influence on the value of your property. Therefore, when checking your WOZ value, always look at the stated value reference date (waardepeildatum).

The condition reference date indicates the date the condition of the home is taken for the WOZ assessment. The condition reference date is usually the same as the value reference date, but in the case of a recent new construction or renovation of you property, it can also be a year later. The applicable condition reference date (toestandspeildatum) is shown on the appraisal report.

Demarcation

In order to appraise a property, it must first be clear what belongs to this property. The WOZ-value, for example, takes into account the house with a garden and outbuildings such as a garage or a storage room or shed. Indicating  what is included in assessing the WOZ value is called "demarcation." The act (Wet WOZ) provides guidelines for "demarcating" the property to be assessed. This taxable property is also known as the "WOZ object".

Property characteristics form the basis of a WOZ value

To arrive at a correct appraisal, municipalities rely on the characteristics of your property in their registration as a basis. These are called object characteristics.
Object characteristics include:

  • Type of house
  • The size of the house (usable floor area)
  • The plot area of your home
  • Year of construction
  • Maintenance condition
  • Location

A municipality always monitors these property characteristics and updates them if necessary. Some examples of signals that lead to updates are:

  • Comparing aerial photos to discover an attached conservatory or dormer window.
  • 'Walking around' the neighborhood to see the maintenance condition of a property.
  • Looking at houses for sale. Internet ads often offer a lot of data with pictures of the house.
  • Inquiring if a new property owner has changed anything in a home after the purchase, such as an extension or a new kitchen.
  • Check whether the data from the municipality still corresponds with the data from, for example, the Cadastre (plot area).

Appraisal of WOZ-value in three steps

The municipality appraises the WOZ value roughly in three steps: market analysis, setting up the valuation model and final inspection by an appraiser.

Step 1: Market analysis of sold houses
Municipalities collect the sales prices of all houses in the municipality. The sales prices that the municipality receives from the Cadastre are carefully examined. It is analyzed, among other things, whether a sales price can be used to appraise the WOZ value of other houses. If there were special circumstances for a sale, this sale will not be used in the appraisal of other houses. It is also checked whether the characteristics of the houses sold correspond with the data a municipality has in its system. We call this research: the permanent market analysis.

Step 2: Setting up the valuation model
Once the market analysis is completed, the sales prices are used to set up a valuation model. A valuation model or appraisal model is a computer model that esitimates the WOZ values of all houses in one go. After all, a computer can compare large numbers of houses much better than an appraiser. All information about the homes sold is used to ensure that the valuation model approximates the sales prices as closely as possible. This model can also estimate the market value for all unsold homes. We call the outcome of the model: the model value.

Step 3: Final check by appraiser
An appraiser checks the model values calculated by the valuation model before this appraisal is used as a assessed value (WOZ value).