The Expat’s Guide to Buying a House in the Netherlands
Categories: Housing
Special thanks to welocate for giving us a hand in crafting this article, their input was instrumental!
So, you’ve been living in the Netherlands for a while now. It’s pretty good here, right? After living and working here and moving to the sun-dappled Dutch landscape, you might be ready to take that next step. Buying a house in the Netherlands is much the same as anywhere else. However, it has some unique aspects, such as the Dutch language and certain processes. To help you navigate these, we’ve compiled an expat’s guide to buying a house in the Netherlands!
Buying a house in the Netherlands shouldn’t be, and isn’t, scary. However, there are some essential aspects to consider. You should also be aware of the buying process and what pitfalls to avoid. To make things as simple as possible, we’ve split our guide. Read on for a cost breakdown, the buying process, and further considerations.
Are you ready to find your dream house and become a true Nederlander?
Our Guide to Buying a House in the Netherlands
First things first, let’s make finding the house of your dreams a breeze. While traditional exploring is a great way to get a feel for neighborhoods, it’s not the most efficient use of your time. That’s where apps like Funda come in. They simplify the search for available homes in specific areas, allowing you to adjust parameters like budget, number of bedrooms, size, and type of home. Plus, you can get a rough estimate of mortgage costs directly through the app, making your search even more streamlined.
Things You Need to Do When Buying a House in The Netherlands
Before starting with our guide, knowing what additional costs you need to consider is good. For houses listed as ‘kosten koper’ (K.K.), the buyer pays all associated costs. This includes transfer tax, notary costs, and ownership deeds. For homes listed as ‘vrij op naam’ (V.O.N.), all costs are borne by the seller. This is often the case with newly built apartments where the seller is the developer or builder. In this case, the seller also has to pay 21% V.A.T.
Kosten Koper Breakdown
Expect to see these costs in the “afrekening aankoop” drawn up by your notary:
- Real Estate agent fees: €2,500 to 2% of the property
- Notary fees: €1,500 – 2,500 (including sworn translator. NOTE – even if you are fluent in Dutch, as a non-native, a translator is required to be present during the signing of the paperwork)
- Mortgage advisor fees: (€2,500 – 3,000)
- Overdrachtsbelasting (K.K.): 2% of the value of the purchase price. (NOTE – First-time buyers aged 18-35 buying a house valued up to €510,000 are exempt.)
- Waarborg – bank guarantee (optional) around €350
- Inspection costs – €500-750 for basic inspection*
- Miscellaneous costs such as land registry and verification of personal details – €100 ex.
*This is optional but highly worth doing. If purchasing an older house, a home inspection can help avoid significant costs later on. Additional inspections will incur further costs.
A cost associated with apartments or shared buildings is VvE. This applies to shared areas of the property, usually including hallways and roofing. Once you acquire the property, you will pay a monthly VvE fee. Make sure you are aware of this cost! It’s often in the listing, or the seller’s estate agent will be able to tell you.
Starting the House Search
Before you start looking properly, you should do a few things to prepare. One hot tip is viewing home details in the local land registry (kadaster). A small fee can give valuable information on previous purchase prices of homes!
Get a Budget Overview
Before you even start looking, you should check your finances. What savings do you have, and what is your total income? You also need to consider additional costs. These include taxes, notary fees, and real estate agent fees. Depending on your chosen house, you may also need to factor in a renovation budget. Remember that it’s best always to have a buffer if the worst happens. Don’t overstretch yourself!
Speak to a Mortgage Advisor (Or a Bank)
One of the key players in your house-buying journey in the Netherlands is a mortgage advisor. Engaging their services will provide you with a clear understanding of your borrowing capacity when applying for a mortgage. This knowledge is crucial as it prevents you from wasting time looking at houses beyond your budget. A mortgage advisor can also guide you on additional mortgage options, such as a ‘bouwdepot’, which allows for certain renovations. By consulting a mortgage advisor, you can make informed decisions and navigate the mortgage process with ease.
You can also speak directly to banks. Remember that mortgage brokers can access a broader range of lenders and options. Banks will limit you to one of their products. This can help you avoid mortgage advisor costs, but better mortgages may be out there!
Find a Real Estate Agent (Makelaar)
You should choose an agent who understands the expat market and your needs. They can help with property searches, negotiations, and understanding local market conditions. They can also accompany you on house viewings, offering advice and acting as an expert pair of eyes. Many makelaars provide a set number of free viewings as part of their services.
Makelaars incur a fee, generally around 2% of a property’s total value. This fee varies depending on location, market conditions, and the makelaar themselves. Remember that you can buy a house without a makelaar, but it can be complicated. They are vital in spotting red flags with the property and its surroundings. They can also ensure you don’t overbid or offer too much on properties. Using a makelaar also makes you a more credible buyer in the eyes of sellers. They also prepare all the paperwork for your offer and negotiate on your behalf. They’re your right-hand man (or woman!) throughout the process.
The Purchasing Process
You’ve found a house. It’s in a great location, and you can already imagine that first summer evening in the garden. What now?
Make an Offer
Your agent will help you make a competitive offer. Depending on the market conditions, you may need to overbid. However, your agent will inform you of this and ensure you make the most appropriate offer. There is often a degree of negotiation at this stage. Consider the house’s condition, location, potential, and history as cost factors! One further consideration here is that a ‘taxateur’ (evaluator) will provide the property’s value as part of the process.
The maximum mortgage you can receive will not exceed the value of the property for which the evaluator provides. So if the property’s value comes back as €350,000 and you’ve bid €400,000, you will need to make a down payment of at least €50,000 to make up the difference.
Sign the Purchase Agreement (Koopakte)
Hooray! Your bid won! After your offer is accepted, the next step is to sign the purchase agreement. This contract includes the terms of the sale. It is generally drawn up by the seller and or their agent. Your agent will review and ensure all clauses are correct and applicable. You can also negotiate additions, such as damage/issues in an inspection or failure to secure financing. You typically have a three-day cooling-off period to reconsider (denktermijn).
After this period, the Ontbindende voorwaarden applies. (conditions you can walk away from the contract with no penalties). This usually applies to failure to secure mortgage financing or significant deviation in the outcome of a building inspection. As such, you should also consider arranging a technical inspection (bouwkundige keuring). Depending on how you structured your offer, the outcome of this inspection can give you cause to reconsider or retract.
If you walk away after making the agreement after the cooling-off period and without cause, a 10% of the total house value penalty applies.
Arrange a Mortgage (Hypotheek)
In tandem with everything else, you should complete your mortgage application with a lender. At this stage, you need to provide the necessary documents. These include proof of income, employment contract, and residence permit. You should also decide on the length of your mortgage (typically a fixed rate between 5 and 20 years).
Make sure you are aware of aspects of the agreement, such as:
- Whether you can rent out your property
- Applicable interest rate
- Repayment schedule
- Early repayment conditions
- The mortgage term
Remember to ensure that the related costs of the mortgage are tax deductible. You can include these costs in your tax return for the following year. You can also receive a monthly or annual tax refund, depending on your choice.
Types of Mortgages
In the Netherlands, there are many different types of mortgages available. However, the main two to be aware of are ‘annuities mortgages (annuïteitenhypotheek)’ and ‘linear mortgages’ (lineairehypotheek). An annuity mortgage will see you pay more interest and less loan amount in the first years before switching as your debt decreases. By comparison, a linear mortgage is a fixed monthly amount plus interest. While these often mean you will pay off your mortgage quicker, initial repayments are generally higher.
You can also choose between fixed and variable interest rate mortgages, set for varying periods depending on the current market offering. Other, more specific mortgage types are available in the Netherlands, such as credit mortgages (krediethypotheek), savings mortgages (spaarhyoptheek), and hybrid mortgages (hybridehypotheek). Your mortgage advisor can explain the benefits and applicability of all available to you.
Sign the Deed of Transfer (Transportakte)
The day is here! You will be scheduled to sign the transfer deed at a notary’s office. Usually, the seller will also be present. They will also be present at this appointment if a translator is required. This ensures you are aware of all aspects of the paperwork and transfer process. The notary will register the transfer of ownership at the Land Registry (Kadaster). You can also engage a lawyer to review the paperwork for an additional fee, but this is usually unnecessary.
Jangle Those Keys!
After signing the deed, you’ll receive the keys and officially own the property! Make sure you have all of the necessary keys, along with any copies. Phew. Time for a quick celebratory drink before rounding up some friends to help you move in?
Further Considerations When Buying a House in the Netherlands
Residency Status
Ensure you have a valid residence permit or visa. If not, this will be a major stumbling block!
Understand Leasehold
While uncommon, in some areas of the Netherlands, it’s possible to purchase a house but not own the ground beneath it. This is a leasehold. The municipality or a private entity commonly owns this. In this case, you must pay a set fee per year. This fee can and will increase every 49 – 99 years.
Get Insured!
Make sure you select home insurance that is appropriate for you and your home. Some policies cover contents outside of your home, such as valuables and electronics. The key to insurance is to be protected if the worst should happen. Think of things like theft, fire, or water damage. You can often say insurance monthly or annually.
Understand What is Tax-Deductible
As mentioned before, some of your costs are tax-deductible. This means you can receive a tax break, usually in the form of a reimbursement of taxes related to these costs. This usually occurs the following year. They include:
- Notary Costs
- Broker Costs Related to Mortgage Advice
- Fees Associated with Valuations and Registration
- Mortgage Application Costs
It’s best to work with a financial expert to ensure that you correctly submit these costs and receive the correct amounts.
Currently, homeowners can also take out loans and receive other tax breaks for installing sustainable materials and energy in their homes. This includes things such as heat pumps, insulation and energy-efficient glass. This is subject to change and is government-led. They also have limits on who can apply. For instance, those with savings over a certain amount will not qualify.
Financial Requirements
Many mortgage providers now offer mortgages for freelancers and those with temporary contracts. However, you should ensure a stable income and savings for additional costs.
Understand the Language Barrier
While many Dutch professionals speak English, all legal documents will be in Dutch. A translator will be required (and it is recommended!)
Utility costs and taxes
Consider the costs of things like water and sewage and council taxes. These are billed either annually or bi-annually. You need to make sure these are transferred into your name. If your house is overvalued, you can apply for a re-evaluation at your local council (gemeente). This will ensure you pay an appropriate amount of tax per year.
Select an Expat-Friendly Mortgage Provider
Some banks and mortgage advisors are more accustomed to working with expats. Look for those offering special mortgage products for non-Dutch residents. Also, expat-focused services such as those provided by Welocate should be considered. They can help set you up with advice, solutions and experts who can talk you through the purchasing process. They also offer broader support for moving to and around the Netherlands.
Research the Market
Real estate markets vary by region. Amsterdam, for instance, is more competitive and expensive than smaller cities.
Know Your Area
Before deciding on a house, research the neighborhood for amenities. Also, check out schools, transportation links, and community services. Make sure it fits you, your family, and your future!
You’ll soon be well on your way to financial stability, success, and peace of mind!
Special thanks to Welocate for their invaluable insight into this article