10 things to expect when renting or buying Dutch property
You're a new expat in the Netherlands and now you want to make it your home. Should you buy or rent a property? Find out which is a smarter move with these 10 tips to watch out for.
You have taken a giant leap. You’ve arrived in the Netherlands, eager to start a new life as an expat in this quirky little country. But like many expats before you, you will soon — or already have — encountered one of the biggest challenges during your stay in the Low Lands: housing.
With a growing population of more than 17 million and an area of 41,543 square metres, the Netherlands is one of the most densely populated countries in Europe so competition for attractive properties in popular areas is fierce. Knowing what to expect when renting and buying in the Dutch housing market is essential to successfully finding your first home in the country.
Executive Home Rentals has gathered several useful insider tips that, after 23 years of helping expats with their property search, have been guaranteed to make house-hunting easier.
1. Renting or buying?
Are you pondering whether renting or buying is right for you? Here is something to consider: the Netherlands has been rebounding following the 2008 financial crisis and while the property market is in flux, prices are now steadily increasing. As an expat resident, this means that renting is recommended if you plan to stay in the country for three years or less. However, if you envision yourself staying for longer than that, then buying is more ideal as you can take advantage of existing home owner tax benefits and mortgage costs that are often lower than rent.
Have a good think and know how long you plan to stay in the Netherlands especially if it’s only a year or less as this could be a ticket to finding prime housing at a fraction of regular costs. Temporary accommodations specifically targeting — but are not limited to — short-stay expats like employees of international companies here on short rotations have been popping up all over the country. These short-stay properties are often fully furnished, includes all utility costs and cheaper than long-stay ones. Contracts, however, only typically last up to one year, after which, you have to vacate.
3. Prices and location
Unless you are ready to fork out prime money, look outside of the Ranstad region and find housing in equally appealing cities like Eindhoven, Nijmegen and Maastricht or even nearby towns to major cities. The Randstad, a megalopolis that covers the four large Dutch cities of Amsterdam, The Hague, Rotterdam, Utrecht and its surrounding areas, is very attractive to expats due to its good quality of living, culture, nature, job prospects and the relatively young but highly educated population. But living in property in the region could be pretty pricey.
A one-bedroom property located in the centre of the main cities within the Randstad will easily set you back a couple thousand euros a month. The average rent prices in Amsterdam, for example, stands at around EUR 2,200 per month. So don’t be afraid to look outwards! The Netherlands is undergoing a construction boom and more reasonably priced properties with bigger floor spaces located a little outside main city centres are becoming available in the market. You might have to spend more time on travel but your savings could sometimes be exponential.
When house-hunting, make sure you know what ‘unfurnished’ (kaal) entails in the Netherlands. Unlike what most expats would expect, this could literally mean the house is an empty shell without basic appliances or even light fittings and flooring. Apart from fully furnished (gemeubileerd) or unfurnished, some properties are offered as gestoffeerd or soft furnished. This typically implies that the place is fitted with some appliances, flooring, curtains and lights. To avoid surprises, ask the realtor or seller about what furnishings will be included in your potential new home. In some occasions, it’s possible to rent furnishings at a discount through your property manager or strike a deal with the previous tenants. Don’t hesitate to inquire!
5. Social housing
If you see an apartment that has a price that’s too good to be true then, it probably is. Social housing makes up a huge portion of the rental market in the Netherlands. Partly subsidised by the government, the rent for decent social rentals are capped at EUR 710.68. You must be a Dutch citizen and meet strict criteria like earning less that EUR 35,739 in 2016 to be declared eligible for these rent-controlled properties. The almost three-year long waiting lists make this otherwise attractive opportunity almost impossible for expats but could still be worth a try.
6. House search by yourself or with an agent
In the beginning of your property search, one of the first questions you should ask is whether or not you should employ the help of a real estate or rental agent. Using brokers, or makelaar as they’re called in Dutch, is common in the Netherlands and could be especially advantageous for freshly arrived expats or anyone not fluent in the local language. A good makelaar will have extensive inside knowledge about the housing and rental market in a particular area that could help them as they do the initial property search and screening for you. Rental makelaars would have a wide roster of rental properties to choose from. They could also translate for you and give good advice on peripherals, such as neighbourhoods, schools, parks and public transport. Agents could also take over negotiations, notary meetings and arrange the contract after, if you’re purchasing a property, performing checks on its property’s ownership, land registry and apartment cooperative contracts.
But while there are many pros, there are also some cons like having to sign an exclusive contract with a makelaar, often entitling them to an agent’s fee — typically amounting to 1–2 percent of the property purchase — even if you find a property yourself or decide not to sign. You also have to ensure that the estate agent is only working or you and not for the seller or landlord to prevent any bias. Figure out what you’re comfortable with and if you decide to proceed without a makelaar, remember that there are tons of free Dutch property portals online like funda, Perfect Housing, Pararius and Direct Wonen that could still aid you in your search.
7. Financial tax advantages
Don’t forget to familiarise yourself with the financial tax advantages that buying housing or renting will give you as this might greatly impact what you choose as a new home. The Dutch economy has been in constant flux since the 2008 financial crisis with property prices getting higher. To cushion the blow, the government offers buyers tax benefits and lower mortgage costs than renting while expenses related to the mortgages are tax-deductible. Your tax will also be levied on the ‘deemed rental value' of the notary. However, in the event that you leave the country and keep your house in Holland, the interest tax deductions disappear as they are based on residency and living in the house. Make sure you understand all these concepts before you make a decision as this could affect your decision greatly and could be the key to making some great savings.
8. Rental law
Rental contracts in the Netherlands are very pro-tenant but watch out, breaking any rule on the contract carries tough penalties. Both you and your landlord are required by law to honour all agreements and if one party fails, matters could be taken to court. Once you’ve been handed the contract for your ideal home, ensure that it has the necessary information such as monthly rent, extra costs, whether insurance for the property is required, house rules, landlord’s duties, rent increase warnings and the notice period for terminating the contract, which ranges from one to six months. Take care to read it several times and if needed, have a native Dutch speaker explain every item to you to avoid any complications. The Dutch government has a uniform rental agreement contract for all tenants that your landlord can add additional stipulations to like ask for clarifications if there are any. Interest payments on mortgages are tax deductible if your property is used as the primary residence and you are registered as a resident taxpayer.
9. Housing insurance
Whether you’re renting or buying, remember that you must take out a housing insurance or woonverzekering for certain properties. After reading your contract, you will know whether you’re required by law to avail of this. The insurance costs around EUR 11 and higher per month and covers any damages from burglaries, unforeseen natural disasters and water damage.
If you’re renting, look into also getting insurance for the furniture and any other fittings that come with your place. This can usually be added at a low cost on your woonverzekering and prevent you from getting any unwanted surprises that might severely decrease the amount of deposit you receive once you decide to leave your current home.
10. Forget your wish list
The Dutch rental market is extremely tight so it might be good to either chuck your wish list or be prepared to make some concessions to avoid disappointments or even frustration. It’s tempting to fantasise about living in one of the postcard-perfect houses beside Amsterdam’s famous canals. Built tall and narrow, these traditional houses have an average of five floors each. The slender houses come with steep stairs, which are meant to keep your valuables safe in case of flooding. Each of them also have protruding beams with hooks to hoist furniture up and through the wide windows.
These quirky historic houses, however, easily come with a price tag of a few thousand euros. So if you want to save money yet still have the comfort you desire, look outside the centre of popular areas like Amsterdam, The Hague and Rotterdam and find something historic-looking in less popular — but equally gezellig — areas.
Executive Home Rentals / Expatica
Photo Credits: Mark Moz (thumbnail).
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