Buying a House as a Couple in The Netherlands

Buying a house is one of the biggest decisions a couple can make. It comes with major legal and financial commitments at the best of times. To add a little extra spice to the process, you’ve decided to do all that in a new country! And so, a wide array of all-new fine-print-reading and hoop-jumping now awaits!

Keep in mind that Dutch house prices doubled between 2013 and 2023. For most people, this means the only option to buy a house is with someone else. Usually, that’s your significant other. To help you better understand the risks of buying a house as a couple in the Netherlands, we’ve enlisted the help of M/V Works International.

Guiding Principles

There are two things to remember:

• Whose names are on the housing deed;
• Whether the incomes of those people can afford the mortgage

With these in mind, everything becomes much easier to understand. Remember that when you buy with a dual income, you can usually afford a higher mortgage—provided other debts don’t get in the way.

According to Ilona Van den Bunt from M/V Works, this means “calculating the mortgage with two incomes can get them a better deal.” This is because “the bank sees two incomes and thinks it has a better chance of actually closing the mortgage.”

There are a few forms a relationship can take, which are usually:

• Cohabitation with no agreement (Samenwonen zonder samenlevingsovereenkomst)
• Cohabitation with a Cohabitation Agreement (Samenwonen met samenlevingsovereenkomst)
• Marriage or registered partnership – with or without prenuptial agreements.

Buying as an Unmarried Couple With no Cohabitation Agreement

It is possible to buy a house with any person and have two names on the mortgage and transfer deeds. But what happens if those people break up? Both are still responsible for the mortgage. The couple can decide that one person would buy out the house from the other and assume the full mortgage. But if neither party can assume the full mortgage on their sole income, the bank will

only agree to two options: either sell the property or continue assuming the mortgage together.

Note: if you have a mortgage with someone else without a samenwonen, you can assume other mortgages on your own. You can buy property without including the other party. But remember: having one mortgage – large or small – will always impact your ability to have a second mortgage. Whatever the case, it’s important to get advice at this point.

What happens if my partner dies?

In the event that your partner passes away and there is no cohabitation agreement, complications can emerge. This is especially true if your partner has no will and testament. In this case, Dutch inheritance laws apply.

Vincent ten Bruin of M/V Works explains, “There can be problems if a partner dies after buying a house as a couple. While the surviving person owns half of the house, the other half will transfer to the late partner’s next of kin. Even if that person signs it back to you, this will then count as a ‘gift’ and become taxable for its entire amount. Luckily, you can avoid those situations by getting good advice from a notary.”

Buying as an Unmarried Couple With a Cohabitation Agreement

A relationship with a samenwonen contract provides more obligations and protections. It is a written agreement for some matters relating to living together. However, it does not guarantee co-ownership of the property where the couple lives. The key thing to remember is that these types of contracts can vary and have different conditions.

In a cohabitation agreement, you can choose (but are not obligated) to outline:

• the division of household expenses, daily living costs, and attire;
• joint finances and bank accounts;
• expenditures related to the upbringing and maintenance of children;
• the distribution of assets in the event of the relationship’s dissolution;
• a survivorship provision – enabling retention of jointly-owned property after a partner’s death.

These agreements can have a significant financial impact on you or your partner. So, you should always draw up such agreements with the help of a notary.

What happens if my partner dies?

Cohabitation agreements are different from marriages and registered partnerships. Any provisions of ownership related to the property need specifying. It is not automatic in covering how home ownership divides, in the event of death or breakup. There is no “community of assets” as in marriage or registered partnership. So, a cohabitation agreement can be important to ensure property transfer to a surviving partner. But without such a clause, situations may arise like with couples without a cohabitation agreement. The surviving partner will then have to deal with the family of the deceased partner.

A will specifying that your partner should inherit the property can also help. If you co-own the house and you inherit the other half, you retain house and mortgage. If you own half and the other half goes to a different heir (not you) and you want to buy them out, there will be an income test.

Finally, there are things to consider if you have a child or step-child with your partner. If the house is in your partner’s name, the samenwonen does not mention your rights, and there is no will, the child would inherit the house. You would have no rights to the property in the eyes of the law.

Buying a House as a Married Couple

Buying a house as a married couple is very relevant for internationals, especially for those already married. A marriage registered with Dutch authorities always has a community of assets. That is unless the married couple has agreed to prenuptial saying otherwise. This means in a marriage or civil partnership, the house and mortgage are in both names. In The Netherlands, since January 1, 2018, you automatically marry in a limited community of property. This means that assets or debts that were yours before the marriage remain yours. Think of your own house or car.

Under Dutch law, your heirs are your spouse, children, and blood relatives unless otherwise specified in your will. So, in the event that one of you should die, the surviving spouse can remain in the house.

In addition to these rights, marriage brings a new set of responsibilities to the table.

These include:

• Ensuring that a surviving partner can still afford the mortgage in the event of a death
• Deciding how property gets split in the event of a divorce
• Preparing for the eventuality of a bankruptcy of either partner

What happens if my spouse dies?

In certain cases, married status brings certainty here. As mentioned, even if there is no will or contract in marriage, you are your late spouse’s heir. But while that covers legal ownership, the bank might also wish to have a say in whether the mortgage is still open. In such a moment, it is certainly recommended to contact the financial advisor and assess the financial situation of the house owner.

To that end, M/V Works International’s experts always recommend life insurance. In the event that one partner dies, their earnings are also lost. Taking out policies for each spouse can help ensure the survivor can afford the mortgage.

There are also matters of taxation to consider. As a married couple, there are amounts which you can inherit from each other for free. But there are limits – and life policies can fall at those limits. For example, if your house already has surplus value from when you bought it, that falls partly in your inheritance. But at the same time, if you have life insurance you have taken out together, the entire amount can be part of your inheritance. In this case, splitting a policy as ‘counter-insurance’, where each partner insures the other, then it is not an inheritance. It is a pay-out of a contract—an untaxed amount. That can make a huge difference when paying tax on a life insurance of €400,000. Beware that the premium may not be paid out of shared assets.

What if we divorce?

Splitting the assets in a divorce is always difficult. But expats may open themselves up to a range of extra problems if they are unfamiliar with Dutch law. For example, you would be wrong to assume that one of you can take on the mortgage alone without the bank’s input. Many people think divorce courts have the final say on this. While that court can order one spouse to buy the other out, Dutch Banks can overrule that if the mortgage is too expensive for a sole income.

If the mortgage is not paid off, those rules exist to ensure banks have the best chance of securing their returns. The most important reason for the rules is that one wants to avoid a person having too much credit, which could lead to financial problems. If the remaining person can’t afford the mortgage alone, the idea of buying out gets vetoed. In that case, the person who has moved out may still be liable for their share of the payments – even after they leave – or they will be both compelled to sell up.

Even if the couple decides from the outset they are selling, other complications may be waiting. It is inaccurate to assume that everything is divided 50:50 then. Unless a prenuptial or agreement states otherwise, Dutch investment law applies. This will look at the records of what each partner put into the property. The law also accounts for the rise or fall of the property value to ensure “each person gets what they deserve”. Again, it is worth signing an agreement in the notary process to plan ahead for this.

What happens if one of us goes bankrupt?

Bankruptcy is always a risk if someone is a business owner. From a bank’s perspective, one partner going bankrupt is not always an issue as long as someone is keeping up the mortgage payments. But the ability to do that can hinge on how you register your assets as a couple. To that end, you should consider making your exposure as a private client as low as possible. For example, you could notarize an agreement. This could move from a 50:50 split to placing most of your assets with the partner without a business. That can preserve your spouse’s ability to make mortgage payments.

The NHG mortgage

The NHG mortgage can provide extra security to underwrite a couple’s mortgage in the Netherlands. It’s set according to the value of the loan—with a limit of €435,000 if there are no energy-saving investments. With those, it extends to €461,000. If the bank decides it has to sell the house, this shields you from losses because there is a chance the property could sell for less than the outstanding mortgage.

Seek Professional Help

There are many other reasons why contacting a financial advisor before buying as a couple is a good idea. For example, when it comes to applying for exemptions from property transfer tax. These exemptions may vary if you and your partner are on either side of the age of 35. This means you need to take extra care with the application. And, sure, you can also check out our guide on the subject. But at the end of the day, there is no substitute for professional help.

So, if you were in need of help navigating the Dutch housing market as a couple, where could you turn? Well, there are plenty of companies specializing in this. And M/V Works International leads the pack.

M/V Works International is an intermediary for more than thirty mortgage lenders. This allows them to offer you unparalleled insight into the industry and to arrange the right mortgage for you from start to finish. Contact them 24/7 via their website to find out more.