Buying a house

Although it is probably better to rent for a while before buying a house, the difference in monthly payments can make purchasing an attractive option for those staying longer. The difference comes largely from the fact that (for the time being at least) the Dutch government repays some of the mortgage interest as tax relief.

 

After a while most expatriates realise that it is more attractive to buy a property (real estate) in the Netherlands instead of staying in a rented house or apartment. After a chat with their friends or tax accountant they found out that:

 

  • Buying a property is the first step to building up (personal) assets. Due to savings and tax regulations in the Netherlands, it is possible to save money for your house on a tax-free basis; 
  • The Real Estate Market in the Netherlands shows, looking at historical figures, that it grows more than the inflation, which creates an attractive investment. Secondly, due to the inflation your mortgage debt will slightly decrease as well;
  • The Dutch tax authority is providing an annual tax benefit for house owners. Owners of a (residential) property will receive a tax refund on the interest paid for the mortgage used for the purchase of this particular house up to a maximum level of 52% (i.e. highest tax bracket). This is one of the major reasons why tax advisors will advise you to buy residential property in the Netherlands because most of the time expatriates will get tax refund on the highest possible level.

 

Before you acquire your new property, you need to go through a time-consuming process with quite a lot of third parties involved like the real estate agent (property broker), the mortgagee for granting you a mortgage (loan) (e.g. bank or insurance company), the civil law notary, and the tax consultants. Because of this, you might well lose track of proceedings at a certain stage of the process.

 

Things that the process requires you to do are: starting to look around for the house (research), doing the negotiations with the selling estate agent, and making sure that the right conditions for the purchase are accepted, taking care of the technical survey, making a proper judgement about the (legal) contents of the purchase agreement, taking care of the mortgage with the requested conditions, collecting the required documents for the mortgage, contacting the civil law notary for setting up the legal deeds for the date of delivery (including translations) and taking care of the involved tax matters. For expatriates, it is also a complicating fact that they are often not familiar with Dutch law (continental law), which is quite different from e.g. British law.

 

The amount of interest repaid by the government depends on the level of income tax you pay. This in turn will depend on factors such as the 30% tax facility (check the Taxation section) as well as gross salary. This is a complex field and it is advisable to seek help from a professional financial advisor before going ahead with any purchase.

 

When buying a house, you should also be aware that costs of purchase (including taxes) total around 10% of the cost price are paid by the buyer. Dutch house prices have risen relatively slowly over the last few years, averaging around 3% per year. Due to the recent crisis house prices seemed to be leveling off in the Netherlands, but since last year we can again see an increase.

 

Type of housing Purchase price (x1000)    Mortgage per month/net
    (indication, incl. tax refund)
studio apartment €120 -  €160 €375 -  €475
Two-bedroom apartment €140 -  €200 €425 -  €525
Three-bedroom terraced house     
€170 -  €250
€450 -  €575
Semi-detached house €220 -  €500  
€625 -  €1075
Detached house  
> €500 > €1100

 

For more information about mortgages check the paragraph Mortgages.

 

Real estate agents

House purchases are generally made through a makelaar (real estate agent). There are many agents in the South Netherlands, each with its own portfolio of houses.

Theme:

HOUSING

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