Planning on buying a house in the Netherlands? Here is a step-by-step guide to get you started!
- Contact a bank or mortgage broker. It is helpful to discuss with them whether you will be able to take out a mortgage, how big it could be and what kind of monthly expenses you can expect. Clarifying these points will allow you to focus on finding the right house, without worrying about encountering any unpleasant surprises.
- Select a real estate agent. Tell them what you are looking for, what you absolutely need and what kind of price range is realistic for you. If you have any special wishes regarding the property, make sure your agent and the real estate agent of the seller, are aware of them. If they are not, and it turns out your home does not satisfy your wishes, you wont be able to hold them accountable.
- When you have found a home you like, be sure to do some research on any external issues that might arise. These could include city council regulations or even soil contamination.
- If you still want the house after your investigation, inform your real estate agent verbally. They will contact the seller and relay your message.
- Have a building inspection carried out. If you fail to do this, and there is a problem, it is likely that you will lose your right to hold the seller accountable.
- Make sure the purchase of the house is contingent upon its passing the building inspection.
Here is what happens next:
PRELIMINARY PURCHASE CONTRACT
The verbal agreement is put in writing in the preliminary purchase contract (voorlopige koopakte). A penalty clause is usually included, incase the seller or the buyer does not meet his obligations. After being signed by all parties, the preliminary purchase contract is sent to the civil law notary. They will deal with the transfer of the title of the house. A three-day ‘cooling-off’ period starts the day after the buyer receives a copy of the signed contract. During these three days the buyer can cancel the deal without any repercussions and without having to state the reason.
The choice of civil law notary is usually the buyer’s. Upon receipt of the preliminary purchase contract, the civil law notary inspects the public registers of the Land Registry regarding mortgages and/or attachments with which the property may be encumbered.
In the Amsterdam area, both parties and their agents often visit the office of the civil law notary together for the signing of the preliminary purchase contract.
TRANSFER OF OWNERSHIP
The transfer of ownership will take place at the civil law notary’s office. A deed of transfer will be drawn up by the civil law notary, and signed by them, the seller and the buyer. The civil law notary will first send you a draft of this deed, together with a statement showing the payment due, in order to complete the purchase. This statement includes everything from the purchase price to the real estate agent’s fees, etc. If there is a mortgage loan, you will receive a draft of the mortgage deed. Your agent will also receive these documents and check them.
Usually, on the day of the transfer, you will visit the house with the agent, to check that it has been vacated and is in the agreed condition. It is the task of the civil law notary to take care of the financial settlement of the transaction, and to ensure that the deed of transfer is entered in the public registers (Land Registry). The transfer then becomes official and the seller turns over the keys of your new house.
Points to Watch for When Buying a House in the Netherlands:
When you decide to buy a house, it is strongly advisable to engage an agent. You can go a long way on your own with the help of the Internet, but buying is far more complicated than renting! You need expert advice on matters such as the fluctuation of prices in certain areas and environmental laws. The construction of a house must be examined and any hidden defects must be found. There are also issues that need to be taken into account when you buy property on leasehold rather than free-hold.
Agents have valuable access to a computerized multiple-listing system. This keeps them up-to-date on properties available in their district. What is more, they are familiar with prices, local contracts and ‘invisible’ obligations. Real estate agents charge a brokerage fee (courtage) for their services. It is negotiable, but tends to be approximately 1 to 2 percent of the purchase price of the house. Some, however, do offer an expat service package.
Fixtures and Fittings
When you start negotiating, you should keep in mind that the purchase price probably excludes the following:
- light fixtures
- sometimes kitchen appliances.
So, try to reach a clear agreement with the seller on which goods are included.
The deposit on the house is generally 10% of the purchase price. It is due approximately five weeks after the deal has been made, and arranged by the mortgage advisor or the bank itself. They do this by means of a bank guarantee issued by a Dutch banking institution. This deposit is to be paid to a civil law notary, and can be part of the financing agreement reached for the purchase of the house.
The purchase transaction will cost you approximately an additional 6%. This amount represents a government transfer tax of 2%, land registry expenses, the civil law notary’s fees, and the real estate agent’s commission, please see below.
Need to obtain a mortgage to finance your purchase? Ensure that your purchase agreement is made subject to financing. Any other resolutive conditions should be part of the agreement as well. These might include being able to obtain a permit to occupy the real estate, or even having the option to carry out a constructional survey.
You should seek expert advice on the type of mortgage that is suitable in your situation, especially since you might only need one for a limited period of time. Do not forget to inform the bank if you are benefiting from the 30%-ruling. If the mortgage is linked to a capital insurance, you may be faced with additional tax consequences. Due to recent legislation, if you take out a new mortgage, you may only be allowed to deduct your mortgage interest from your taxable income. If you take out a mortgage with straight line redemption and annuity mortgages.
Be sure to get expert advice
Deemed Rental Value and WOZ-Value
Those who own a house and use it as their principal place of residence have to report a certain amount (related to the home ownership) on their income tax return. This amount is a percentage of the value of the house. It is called the eigenwoningforfait (deemed rental value). The eigenwoningforfait is based on the official value of the house, also known as the WOZ-value, which is determined every year by the municipality.
Preliminary Tax Refund
You can receive a tax refund on the mortgage interest deduction every month, by requesting a preliminary negative tax bill from the tax authorities. This is done by filling out a special form. On receiving it, the tax authorities will deposit the refund directly into your bank account.
THE ACTUAL HOUSE-HUNTING
Make sure your agent is well-informed about your specific wishes, prior to the actual house-hunt. This will enable him or her to select a list of properties that meet your requirements. They can also help to acquaint you with the different terms and conditions of contracts and procedures, and check if the specifications you have given are in line with price ranges and the kind of housing available. Based on your personal requirements, a selection from the available market supply will be made. You will tour and inspect these residences until a suitable house is found. It is easier to determine which kind of house suits you best, after you have visited several different properties. Hence, the average search for the right house will usually take a few months, depending on availability, your needs and market circumstances.
Prices and conditions quoted in the listings for sales and rentals are usually negotiable. A negotiation over these will take place between your agent and the agent of the owner. These negotiations often consist of several rounds of verbal bidding and counter-bidding.
As a general rule, the costs of purchasing a house in the Netherlands amount to approximately 6% of the price of the house (this is not the same as the 10% down payment!). The expenses include:
- appraisal fee (expense for having the house officially appraised in order to secure a mortgage)
- notary costs mortgage deed (hypotheekakte)
- cadastral registration fee mortgage deed
- cadastral investigation fee
- administration fee mortgage deed
- structural survey of the house
- bank guarantee fee
- mortgage commission fee (paid either to the bank or the broker)
- National Mortgage Insurance – Nationale Hypotheek Garantie
- transfer tax
- estate agent fee
- notary costs for the transfer deed
- interpreter fees.
For a house worth € 350,000, your approximate additional cost would be an € 21,000.
You may be interested to know that the costs listed below are tax-deductible and can be declared (one-time) on your income tax return:
- notary costs mortgage deed (hypotheekakte) (VAT/BTW)
- mortgage commission fee (paid either to the bank or the broker)
- cadastral registration fee
- cadastral investigation fee
- appraisal (taxatie) fee
- administration fee (afsluitprovisie) mortgage deed
- bank guarantee fee.
You may need the help of an interpreter
If you do not speak much Dutch, you may need an interpreter to help you communicate with the civil law notary. You are legally required to request the assistance of a sworn interpreter to do this. Depending on your language, this could cost you between € 150 and € 500.
Real Estate Agents Portals
www.makelaars.net: real estate brokers portal
www.makelaars-nederland.nl: real estate brokers portal
www.mva.nl: Makelaars Vereniging Amsterdam
www.nvm.nl: Nederlandse Vereniging van Makelaars
Vereniging Eigen Huis (Dutch Housing Association): www.eigenhuis.nl
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