TIP: Want to use the forums? Register your account here!
Buying Property
Buying property in The Netherlands is relatively straightforward. Once you have found a house you like you will usually deal with a real estate agent - "makelaar" in Dutch - who will inform you of the rules applicable to viewing, the fee structure and so on. After the real estate agent you will need to see a 'notary public' who will set up all the paperwork and do some research into the legality of the transaction (more details below).
Advertised house prices are usually open to negotiation in Holland, with negotiations taking place via the agents of the buyer and seller. You should note that furniture, fixtures and fittings are not normally include in the listed price, and should also be covered in the negotiations if you wish these to be included in the purchase. Also, whenever you see the letters 'kk' behind a price at an estate agent's it means all cost involved in buying the property is for you rather than the seller. As a general rule this means adding about 10% to the price listed.
Once a verbal agreement has been reached between the buyer and seller, the estate agent will draw up a purchase deed confirming this, and including penalty clauses which will come into effect if either the buyer or seller fails to go ahead with the agreement. The purchase deed should therefore specify any conditions which must be met for you to go ahead with the purchase, such as securing finance. However, there is a three-day cooling-off period after signing the purchase agreement during which the buyer can withdraw without penalty.
The signed purchase deed is sent to a civil-law notary, usually appointed by the buyer, who deals with the conveyancing. A deposit is usually required within a few days of reaching agreement on the purchase, which is most commonly 10% of the purchase price, and this is held by the notary pending completion of the sale. It can usually be substituted by a guarantee issued by a Dutch bank.
The notary will check that there are no existing mortgages or other encumbrances on the property by checking with the Land Registry, and will draw up a deed of transfer which must be signed by the buyer, seller and the notary themselves confirming the transfer of the property. A copy of this will be sent to the buyer for checking several days in advance of the planned date of completion of the transfer, along with a statement of all outstanding payments due. When buying a property in the Netherlands, a total of around 10-12% of the purchase price is usually payable in one-off fees, commissions and taxes. These include estate agent and notary fees, land registry fees and a property transfer tax, set at 6% of the property value.
The seller must vacate the property at least a day in advance of the transfer date. The signing of the deed will then usually take place at the notary's office, and the signed document will be entered in the Land Registry by the notary as official confirmation that the property transfer has been made. A copy of the deed will be made available to the buyer.
There is an obligation on the part of the seller of a property to report any hidden defects, such as a termite or damp problem, at the time of the purchase agreement. If any such defects should emerge after the property transfer these should be reported to the estate agent within six months of the property transfer, and they are obliged to negotiate an arrangement between the seller and the buyer for with the seller about payment for dealing with the problems. There may be a need to go to court if the issues are not resolved through negotiation.
Mortgages are usually arranged for a term of either twenty or thirty years, with a range of different arrangements available. These include mortgages with linear redemption, under which the loan is repaid in equal instalments, with the amount of interest payable being reduced over time; annuity mortgages, in which the earlier payments consist mainly of interest and the later instalments mainly redemption. There are also various forms of endowment mortgages in which interest-only payments are made during the mortgage term, and the mortgage is paid off in a lump sum on maturation of a with-profits endowment policy at the end of the mortgage term, possibly with an additional profit for the policyholder. The choice of mortgage often depends on factors such the length of time that the property owner, if an expat, plans to stay in the Netherlands, and whether they want to benefit from larger amounts of tax relief on the interest in the early years of the mortgage, or spread the tax relief throughout the duration of the mortgage. Endowment mortgages are not usually suitable for people who will only stay in the Netherlands for a few years, since they are unlikely to benefit much from a with-profits endowment policy during this timescale.
It is very common in the Netherlands for people to buy a property and renovate or restructure it to suit their own taste. In doing so, many people use the services of a contractor (aanemer) who will oversee the whole project and take responsibility for appointing and supervising the work of sub-contractors. The contractor will also order building or decorating materials, ensure that the materials and work carried out meet proper standards of quality and safety and deal with administrative or regulatory procedures such as obtaining building permits and checking whether there are any restrictions on making changes to the property, or whether approval has to be obtained from the Department for the Preservation of Monuments and Historic Buildings because it is on the "monumentenlijst".
The customer, however, will normally select household fittings, paints and other materials themselves, perhaps with the assistance of an interior designer (binnenhuisarchitectuur or interieur-antwerpers).
Details of building contractors, who range from independent tradespersons to large construction firms, can be found in the Dutch Yellow Pages. It is best to use one registered with Bouwend Nederland, who are required to meet strict standards of service, and to seek quotes from several contractors before going ahead, as prices vary considerably. Some contractors may offer to carry out the work on a "zwart" (black) basis, in which they offer you a lower price for cash but will not provide a receipt. These tradesmen are evading tax and can carry out the work for a lower price because they do not pay the VAT. For the customer, this is risky as the work is not guaranteed, you will not have any legal right to sue the tradesperson if they fail to complete the work or complete it to an unacceptable standard, and you will have no paperwork required to support any insurance claims which result from damages resulting from the work.
In addition to the property transfer tax that is payable at the time of purchase of a house in the Netherlands, property owners are also required to pay tax on a percentage of the official rental value of the house (eigenwoningforfait), which must be declared on their tax return each year. The value of the property is based on an official assessment by the municipality, which is set for all properties in the Netherlands every four years. Property owners are sent a "woz-beschikking" (woz-decision) at this time, confirming the figure that is applicable to their property (woz value).
In general, property owners in the Netherlands are entitled to tax relief on their mortgage interest and on a number of the purchase-related costs, such as a proportion of the notary's fees, the fee for the valuation of the property and the commission on closing the deal. However, the mortgage interest that is deductible from tax cannot exceed the amount of the mortgage corresponding with the value of the house; if someone takes out a larger mortgage in order to finance renovations, for example, the interest on the surplus amount is not tax-deductible. The tax deduction can only be claimed by one person, so married couples or other taxpayers sharing a house must decide who will benefit from the tax relief. This person can claim the tax refund in advance of their annual tax bill by apply for a preliminary negative tax bill, and the refund will be paid into their bank account on a monthly basis.
Resident taxpayers qualify for tax relief on their mortgage interest on their main place of residence only, and are charged wealth tax on any additional properties that they own in the Netherlands. Partial non-residents, on the other hand, also qualify for tax relief on the mortgage interest relating to their main residence, and do not have to pay wealth tax on any additional assets.
People who are not living in the Netherlands but who own property there which is not rented out, are required to pay tax on their property in Box 3 (taxable income from savings and investments), at a rate of 30% on a percentage of the official rental value, less any mortgage outstanding. Non-residents do not qualify for tax relief on their mortgage interest.
There is no capital gains tax on primary residences in the Netherlands, so any profits from the sale of a house will be tax free. If these profits are used to purchase another property, however, this may reduce the amount of mortgage interest on which tax relief can be claimed.
There are particular tax implications for expats covered by the 30% ruling, who receive a tax free allowance for "extraterritorial expenses". For those who buy property with a mortgage, there will be a need to consider whether they are better off with or without the tax free allowance, since reducing their overall taxable income might also reduce the amount of tax relief they receive against their mortgage interest. Those covered by the 30% ruling and who rent their accommodation in the Netherlands, on other hand, may be eligible to claim at least part of their rent as a tax-free expense.
Expats not covered by the 30% ruling who have their rent paid by their employer might be required to pay tax on this, depending on whether the rent is paid net or gross of tax by the employer. However, there are exemptions for some non-resident taxpayers if specified conditions are met.
Property owners and tenants in the Netherlands also have to pay various taxes and other regular charges to the local municipality. The Municipal Property Tax (Onroerend Zaak Belasting - OZB) is payable only by property owners, and is based on the woz-value of the property. Other local taxes and charges include waste collection taxes, sewerage charges, water control authority charges and a pollution levy.
Finding a property
Property prices in the Netherlands have risen sharply in recent years, from an average of EUR137,000 in 2002 to around EUR250,000 in 2007, although they have now largely stabilized. Rising property prices have also had an impact on the rental market, with rental accommodation now very expensive especially in the main cities. The monthly rent on a typical one-bedroom apartment in central Amsterdam is likely to be around EUR1200-1500. Nevertheless, housing and rental prices are still lower in Amsterdam and the Netherlands' other main cities than they are other European cities such as London and Paris.
The levelling off of house prices at a high level means that property may not be a good investment for expats moving to the Netherlands for a limited time, since there is no certainty of making a profit on the investment. Moreover, it can often take several years to recover the steep one-off fees associated with the purchase of a property in the Netherlands, which usually amount to around 10% of the purchase price.
However, home owners who are resident or partially-resident taxpayers in the Netherlands can benefit from generous tax deductibles.
In general, older properties in well-established areas are most popular with Dutch buyers, and there is a major shortage of this type of property on the market. There are many new housing developments of single family homes in Amsterdam and the other main cities, and properties on these can sometimes be designed to the specific requirements of the buyer. However, many of these new city properties are sold on a leasehold basis, with the land remaining in the possession of the municipality.
Details of properties available to buy or rent in the Netherlands can be found in the classifieds sections of newspapers such as the Telegraaf, Via Via and De Partikulier, usually on Wednesdays or Thursdays, and on notice boards in places such as supermarkets, libraries, churches and schools. Prospective tenants or house buyers can also drive round the residential area of their choice to look for Te Koop (for sale) boards or Te Huur (for rent) boards, which will provide contact details to arrange a viewing.
Most house buyers in the Netherlands use the services of an estate agent (makelaar) and expatriates in particular are likely to benefit from their expert knowledge of the market and negotiating expertise. All estate agents have access to a computerized listing of currently available properties and many also deal with rental accommodation. Estate agents fees are normally around 2% of the purchase price of the property. It is best to use an agent who belongs to the Dutch Association of Estate Agents (Nederlandse Vereniging voor Makelaars), which has a strict code of ethics for its members.
Useful contacts
Nederlandse Vereniging voor Makelaars (NVM)
Postbus 2222, 3430 DC Nieuwegein
Tel: 030 608 5185
Website (in English): http://www.nvm.nl/nvm/index.jsp?navid=_aboutnvm
Copy and paste the text below to insert the button displayed above on your site. Thanks for your support!
Use of this website signifies your agreement to the Terms of Use/Privacy Policy available here.
DISCLAIMER: Nothing on this web site should be interpreted as legal advice or as a buy, sell, hold or other investment recommendation. Visitors are strongly urged to consult with a qualified legal or financial advisor before making any decisions. Neither Expat Focus nor any person involved with the running of this website can be held responsible for any decisions made by our visitors.
Membership:
Latest: 
New Today: 6
New Yesterday: 17
Overall: 39962
Members: 1
Visitors: 14
Staff: 0
Defend against Malware
