Foreigners can freely buy a house in Holland, but it’s important to know the quirks of the Dutch housing market before buying a property in the Netherlands.
Whether you’ve just moved to the Netherlands or are already settled in your new country, you may want to consider the benefits of putting down roots and buying a property in the Netherlands. There are no restrictions on foreigners buying a house in the Netherlands, but you should take time to learn how the Dutch housing market works before rushing in to buy a home.
Along with many other countries, the housing market in the Netherlands spent a long time in flux following the 2008 financial crisis. In 2017 and 2018, however, prices have been rising significantly, with some cities seeing double-digit growth in some cases.
The Netherlands is densely populated with a growing population, so compcaetition for appealing properties in certain areas can be fierce. According to the most recent available data (2015), 69% of Dutch people own their own home – a figure that’s lower than Belgium but higher than France and the United Kingdom.
In this guide, Expat Mortgages, a leading mortgage adviser in the Netherlands, explains how the Dutch property market works and what fees you’ll need to budget for as a buyer.
Expat Mortgages is an independent mortgage broker for expats who want to buy a house in the Netherlands and need a mortgage to realize their homeownership dream. For more than ten years, they have become a specialist in providing expats of all nationalities with home financing solutions, walking them through the entire process from the mortgage application to life insurance and tax advice.
Should you rent or buy in the Netherlands?
The Netherlands has a high proportion of social housing and rent controlled housing, though both are often restricted to low-income renters, which can make finding a property harder.
There are tax benefits for homeowners and mortgage costs are often lower than rent, but you’ll need to assess the market on an area-by-area basis and decide whether it’s prudent to buy now – as transaction costs and high prices in the major cities can represent a big outlay. You can find out more about renting in Expatica’s guide on renting in the Netherlands.
For buyers in some areas, it’s becoming a difficult market. According to data released in July 2018 by Statistics Netherlands and the Land Registry, the prices of existing homes in the Netherlands increased by 8.8% in the second quarter of 2018 alone – with cities leading the charge and apartments increasing in price by 13% year-on-year. This rise in prices has had an impact on transaction levels, too – only 53,000 homes were sold in the second quarter of 2018, that down 9.3% year-on-year.
If you’re considering investing in property, there remains a shortage of affordable rental apartments in the main Dutch cities, especially in Amsterdam where developers are building thousands of micro apartments (around 30m2) to meet demand.
In 2017, the estate agents association NVM reported a shortage of rental accommodation between the range of €710 to €1,000 per month. However, it’s important to note that the Dutch rental sector is restricted by rent controls, which can limit how much a particularly property can be rented for, so buy-to-let investment might not necessarily be a profitable business for everyone.
Are foreigners allowed to buy property?
Yes. The Netherlands does not place any restrictions on the purchase of property by foreigners, whether resident or non-resident. Banks may however not accept to provide non-permanent residents a mortgage covering 100% of the purchase price if it is above the National Mortgage Guarantee (265,000€). See our guide to Dutch mortgages for more information on the home financing process.
Finding a property to buy
As in most countries, you can find property listings online, and in local newspapers and free property papers. Using a real estate agent such as Burgemeester Vastgoed (specialized in helping expats find their dream home) is very common in the Netherlands, and is advisable, particularly for those who are new to the country or are not fluent in Dutch. Dutch estate agents are called makelaar. It’s common to have both a buyer’s agent and a seller’s agent, and each will have different roles in the transaction – and have to be paid separately.
Online property portals
Advantages and disadvantages of using a Dutch estate agent
- You should expect to sign a contract with your agent – these are often exclusive. This means you may be charged the agent’s fee even if you find a property yourself or decide not to buy.
- Fees are typically 1–2% of the property purchase price.
- Agents do the search and initial screening for you.
- The agent should be only working for you, not for the seller.
- Agents may have insider knowledge about the market in a particular area.
- Agents may be able to advise on peripherals, such as neighbourhoods, schools and public transport.
- Agent may be able to translate for you.
- Agents can handle negotiations, notary meetings and arrange the sale contract.
- Agents should perform property checks (not a structural survey) regarding ownership, land registry and apartment cooperative contracts – this is important as it is possible to buy a property without then having the right to live in it.
Concerns when choosing an apartment in the Netherlands
When you buy an apartment, although you own the flat itself outright, you only own a share or a leasehold in the building and/or the land it stands on. As a result, buying an apartment can be more complex than buying a freehold property.
In the Netherlands, each apartment building is managed by an owner’s association called a Vereniging van Eigenaren (VvE). These are responsible for general repairs and maintenance and may be well or poorly run, or even go into debt. As a member, you will be responsible for your share of that debt, so it is important to check into the status of the VvE before purchase. Further terms and conditions relating to the shared spaces will be laid out in the property division regulations (splitsingsreglement) which should be included with your documentation at the time of transfer.
Buying a property in the Netherlands
Mortgage advisers can help you determine your exact borrowing capacity, but for a quick approximate idea (which can even take your 30% ruling status into account), you can use an online mortgage calculator such as these two tools provided by Expats Amsterdam:
Once you’ve found a property on which you wish to make an offer and that’s within your price range, the next step is to get an appraisal, and, if required, a structural or building survey. Contact the mortgage broker you intend to use to ensure you get an appraisal which is also suitable for your mortgage application. You can also request land registry and property value information through the registry office at Kadaster (Dutch only).
When you have a clear idea of the value of the property, you can make an offer and begin negotiations. This is usually done through the buyer’s and seller’s estate agents. Negotiations are usually only undertaken with one prospective buyer at a time. Because of the current tight market, you may also find yourself in a bidding situation with other avid potential buyers. Be prepared to bid sometimes quite large sums over the asking price.
After the sale price has been agreed, the formal steps towards property transfer take place.
- Buyer and seller sign a pre-sale agreement (koopovereenkomst, koopakte) or provisional (voorlopige) contract.
- A notary (notaris) is selected who holds the signed contract and a 10% deposit paid by the buyer.
- The buyer arranges any mortgage they require.
- Buyer and seller sign a completion contract (akte van levering).
- The notary registers the property transfer at the land registry office (kadaster) completing the process.
Dutch law requires that a notary must perform the property registration process. The costs will vary and may be a percentage of the property price, a per-hour charge or a fixed fee. As the total cost is usually €1,000–3,000, it’s worth shopping around a little. An interpreter (tolk) is also required to attend notary meetings in cases where one or more of the parties is not a Dutch citizen. Accredited translators can be hard to find, so ensure you book in advance, even if your Dutch is excellent. Translator fees are typically around €200-€400.
Funding: Deposits and mortgages
Your mortgage (hypotheek) will be arranged after the provisional sale contract is signed. However, it is possible – and important – to discuss mortgage terms with one or more prospective lenders before you make an offer.
You may also wish to arrange a bridging loan or banker’s guarantee to cover the deposit, for example if your cash is tied up in a property you are selling. This usually costs 1% of the deposit fee (which itself is 10% of the total purchase price.)
Find out more in Expatica’s Guide to Dutch mortgages.
Sale fees and charges
In the Netherlands, it is common to have both a buyer’s agent and a seller’s agent. The seller’s estate agent fees will be paid by the seller, otherwise, all fees are typically handled by the buyer.
Budget approximately 6% of the purchase price for fees and charges. This breaks down to:
- Transfer tax (overdrachtsbelasting) currently at 2% ;
- Legal fees around 1.0–1.5%;
- Registration fees 1.0–1.5%;
- Estate agent’s fees 1-2%.
In any financial transaction, don’t forget to ensure you understand whether the value added tax (BTW) applies, currently at 21%, and if so whether it has been included in the quoted price.
Pre-sale agreements (koopovereenkomst, koopakte) or provisional (voorlopige) contracts should include all the usual essential information, such as property details, liens and encumbrances.
In addition, it is important to ensure that it includes:
- An escape clause, in case you cannot get a mortgage;
- Clear penalty or escape clauses, in case either party decides not to go through with the deal;
- Whether any fixtures or fittings are included (such as carpets, light fittings and appliances).
This will form the basis for the completion contract (akte van levering) so it’s important to make sure it’s correct.
There is a legally mandated 72-hour cooling off period after you sign the pre-sale contract in which you can change your mind without incurring a penalty. After that – congratulations! You’re well on your way to owning your own home in the Netherlands.