Starters borrow more since the abolition of the 'jubelton'

Marnix Hazelhoff

7 March 2025

Readingtime 4 minutes

Since the abolition of the jubelton on January 1, 2024, a clear trend has emerged in the housing market: first-time buyers are borrowing a larger percentage of the purchase price for their first home. This is partly due to rising house prices and the decline in personal financial resources among young buyers. As a result, their average Loan-to-Value (LTV) ratio, which represents the proportion of the loan to the total purchase price, is increasing.

This development highlights the growing challenges first-time buyers face when entering the housing market. While existing homeowners can often benefit from the equity in their previous home, first-time buyers are entirely dependent on their savings and a mortgage.

What is the 'jubelton'

The jubelton was a tax-free gift that parents could give their children for the purchase or renovation of their own home. This scheme was introduced in 2013 to stimulate the housing market and allowed parents to make a substantial tax-free donation.

The goal was to help young homebuyers reduce their mortgage burden, but in practice, the scheme had unintended consequences. Instead of lowering mortgage costs, many recipients used the gift to buy more expensive homes, further driving up property prices. For this reason, the scheme was fully abolished on January 1, 2024.

Consequences of the abolition

With the abolition of the jubelton, first-time buyers must now finance a larger portion of the property price with a mortgage. Whereas they previously could rely on tax-free gifts from their parents, they are now more often fully dependent on their own savings and a loan. As a result, in 2024, first-time buyers financed an average of 92% of the purchase price of their home with a mortgage, a slight increase compared to 2022.

At the same time, house prices have continued to rise, meaning that first-time buyers not only have to borrow more but also face higher monthly costs. The average mortgage amount in the second half of 2024 increased to €476,000, a 6% rise compared to the previous half-year. Despite an increase in housing supply, demand remains high, keeping competition among first-time buyers intense.

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Differences between starters and existing homeowners

While first-time buyers are increasingly dependent on a mortgage, existing homeowners benefit from the rising value of their properties. Since they can sell their previous homes at a profit, they need to borrow less for their next purchase. This has contributed to a decline in the average Loan-to-Value (LTV) ratio, which dropped to 87% in the second half of 2024.

Existing homeowners now borrow an average of 79% of the purchase price, a significant decrease compared to five years ago when this figure was nearly 91%. This indicates that they are increasingly able to finance a larger share of their new home with their own funds, while first-time buyers remain pushed to their borrowing limits.

Conclusion

The abolition of the jubelton has primarily impacted first-time buyers, who now have to borrow more for their first home. At the same time, existing homeowners benefit from rising property prices and borrow a smaller percentage of the purchase price. As a result, the average Loan-to-Value (LTV) across the market has decreased to 87%, despite the fact that first-time buyers increasingly require high mortgages.

The housing supply is growing, homes are selling quickly, and prices continue to rise. Although changes in mortgage regulations in 2025 may provide some relief for buyers, it remains challenging for first-time buyers to finance a home without additional personal savings.