Should you buy or rent real estate in the Netherlands?: Dutch house prices are high and can add to the additional cost of buying a home in the Netherlands. Despite this – and renting is common – the owner of a home in the Netherlands usually has good financial sense over the long term.
Tax benefits for homeowners mean that mortgage costs are often less than rent. However, you will need to assess the market on a region-by-region basis and decide if it is prudent to buy now – as transaction costs and high prices in major cities can tip the balance.
On the other hand, there are benefits of renting. If you plan to go again, you will have more freedom, less responsibility in terms of maintenance costs, and of course, lower upfront costs which can be risky. Additionally, being a resident of the Netherlands, there are some restrictions on homeowners, which can be difficult to purchase.
Can foreigners buy property in the Netherlands?
The short answer is yes. The Netherlands does not place any limitations on the purchase of property by foreigners, whether resident or non-resident. However, to get a mortgage you must survive and be registered in the Netherlands.
If you are from the EU, EEA, or any country in Switzerland, you do not need a visa to live or work in the Netherlands. Nevertheless, you will have to apply for a residence permit and national identification number.
Be aware that after five years in the country, you can only apply for permanent residence in the Netherlands and some banks may not offer mortgages covering the highest percentage of the purchase price to non-permanent residents.
With Dutch citizens, some additional costs related to buying a home in the Netherlands are tax-deductible, provided that it is your primary residence. On the other hand, the value of your home affects the tax rate you pay.
Cost of buying a property in the Netherlands
As well as the price of the property, there are other factors to consider when working on the cost of buying a home in the Netherlands. Some of these are mandatory and others are recommended.
In general, fees for various services are calculated about VAT in addition to the value of the property and must be paid before any exchange takes place. The major upfront cost to consider, which you will have to pay if you return out of the contract without a valid reason, is a 10% pre-sale deposit. Upon completion of this amount, the house is subtracted from the price.
Additional costs include:
- Transfer tax – 2% of the purchase price;
- Contract price – 0.3% of the purchase price;
- Mortgage arrangement – 1% of the mortgage or 1.2% of the purchase price;
- Mortgage contract – 0.15% of the purchase price, tax-deductible;
- Estate Agent Fee – 2% of the purchase price;
- Valuation – 0.2% of the purchase price, tax-deductible;
- Other fixed costs include notary and land registration fees.
In addition, the value of the rental value – the value of the rental value of 0% to 0.7% – will be determined by the government and added to your income.
Overall, these additional costs add up to about 5-7% of the purchase price, assuming that a mortgage is required. To put these costs into perspective, a house bought for € 200,000 will end up at a cost of around € 212,000. It does not take into account any renovation or maintenance costs that you would like to consider.
Step-by-step process of buying a property in the Netherlands
Making an offer
Once you find a suitable property, the conversation can begin. Typically, an agent will negotiate with only one seller at a time, making an offer to buyers.
If you are interested but are not able to make an offer, you may be able to arrange a first refusal on the property, which will give you a few days in which others cannot make an offer. This gives you time to find out how much you can borrow or do a building survey. However, sellers are not always ready to refuse first.
While it may initially seem sensible to offer less than the asking price, the reality is that with a housing shortage, many buyers will offer more than the asking price even with the first offer. Check the registry of land for house prices in the area. An estate agent can help you negotiate the best option.
Arranging evaluation and survey
Although not required when purchasing a home in the Netherlands, you will need an appraisal report to obtain a mortgage. This evaluation is done by an evaluator. For this, you have to pay.
A structural survey as part of the contract is also a good idea. An independent specialist will identify any potential problems and give you an estimate of repair costs. This allows you to negotiate a lower purchase price.
Negotiations also include aspects of the closing date you are prepared to buy and other conditions for the seller.
Important contingencies to take into account include:
- A financing clause will allow you to withdraw if you cannot raise the required mortgage;
- National Mortgage Guarantee;
Once you agree to the terms, they will be set in the contingency purchase contract. Even if this organ is preliminary, the contract means that you are committed to the purchase, until the terms of both parties are met.
When buying a home in the Netherlands there is a 72-hour cooling-off period. This means that after you sign a pre-sale contract you can change your mind within this period without being fined.
An initial purchase contract usually involves transferring 10% of the purchase price to you or your mortgage provider as a deposit to the seller or notary. If you return out of the contract without a valid reason, this deposit will be transferred to the seller. Remember that if the bank has paid the deposit, then you will have to transfer this amount to them. You will also have to pay for the bank guarantee, which depends on the deposit amount.
Hire a notary
Buying a house in the Netherlands is protected by legal procedures. A notary acts as a legal intermediary between the seller and the buyer, working to sign. Notaries are required for the sale of homes in the Netherlands. They will investigate whether the property can be sold by the seller, registration in the Land Registry, and other legal requirements.
When purchasing a property in the Netherlands you select your notary. At notaristarieven.nl and notaris.nl you can find more information about what Notary does and compare prices for different services. You can also ask your estate agent to advise you.
Your property agent can also support you. During this trip, you should see that the house has been left as agreed. It will also include gas and electricity meter readings. If everything is in order, you will sign transfer deeds with the seller in a notary, making you the legal owner. Here you will also sign hostage deeds.
If you are walking around with your partner, you want to make a cohabitation agreement while you are in the notary. Since non-married or non-registered partners have little legal protection in the Netherlands, it is important to organize the main issues themselves, such as financial contributions or ownership of the property.
Selling homes without floors is common in the Netherlands, although this depends on the agreement on moving goods. This means that you may need to do some renovation or DIY before running properly.
Home buying tips in the Netherlands
- Know Your Budget: Make an appointment with a mortgage advisor. A mortgage calculator can be an easy appraisal tool, but the rules for ex-pats may vary. Ensure that it is no surprise to use the advisor and estimate realistic value.
- Do your research: In popular places like Amsterdam, houses can look like gold dust but don’t panic. Seems like a good idea which could be a bad investment in the future.
- Hire a purchasing agent: This is a seller who has house prices. The agents’ access to the properties is not yet listed on the websites and you can get a big profit by getting a new home.
- Keep an eye on detail: Make sure you look at previous superficial things such as devices as these will probably not be included. Instead, check the faucet and light switch, and watch for signs of mold or humidity.
- Get the house surveyed: Things like asbestos and structural damage can be difficult to spot. A surveyor can save you huge costs in the future.
- Familiarize yourself with local keywords: An agent can help translate contracts and legal terms.