Property taxes in the Netherlands: is it expensive to buy property?

While the upfront costs are often lower than in some other European countries, the tiered system of transfer taxes and recurring municipal fees can impact your long-term budget.

In 2025, you can typically expect total purchase costs, including taxes and fees, to range between 4% and 6% of the property price if you are buying a main residence. However, this can jump significantly for investors.

Use Wise to save money on your property purchase

Buying a property abroad is a big step and involves important financial decisions. Wise, an international money transfer company, provides specialist support to help you navigate large international transfers and save on exchange fees. Fill out Wise’s online form today to find out how they can assist you.

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What are the main property taxes in the Netherlands?

The Dutch property tax system is structured around both one-off payments and recurring annual costs. The main types you will encounter include:

• Property Transfer Tax (Overdrachtsbelasting): A one-time tax paid by the buyer upon purchase.
• Municipal Property Tax (Onroerendezaakbelasting or OZB): An annual tax paid to your local municipality.
• Deemed Rental Value Tax (Eigenwoningforfait): A percentage of your property’s value added to your taxable income in Box 1.
• Wealth Tax (Box 3): An annual tax on the value of secondary properties or investment real estate.

Who is subject to these taxes?

Most people who acquire or own Dutch real estate must pay these taxes, regardless of their residency status.

• Residents: Pay OZB and deemed rental value on their main home.
• Non-residents: Subject to transfer tax and wealth tax on Dutch-sourced real estate assets.
• Corporations: Pay higher rates of transfer tax and are subject to corporate income tax on rental earnings.

Taxes on buyers

When you buy a house in the Netherlands, the most significant tax is the transfer tax (overdrachtsbelasting).

• Standard Rate for Main Residences: If you buy a home that will be your primary residence, the tax rate is 2% of the purchase price.
• Investment and Second Home Rate: Investors or those buying a non-primary residence (like a holiday home) pay a much higher rate of 10.4%.
• VAT (BTW): Value-added tax (typically 21%) is generally applied to newly built properties instead of transfer tax.

Exemptions:

• Starter Exemption: Buyers aged 18 to 35 purchasing their first home to live in are exempt from transfer tax if the purchase price is €525,000 or less (in 2025).
• Age and Price Limits: If you are over 35 or the price exceeds the threshold, the full 2% applies to the entire amount.

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Taxes on sellers

In the Netherlands, selling a property is relatively tax-efficient compared to many other countries.

• Capital Gains: There is no capital gains tax on the profit made from selling your primary residence.
• Investment Property: If the property was an investment, it would have already been subject to annual wealth tax in Box 3, so there is still no specific “exit” tax on the profit at the time of sale.

Taxes on homeowners: recurring payments

Ownership comes with annual obligations that vary depending on where you live.

• Municipal Property Tax (OZB): Calculated as a small percentage (usually around 0.1%) of your property’s WOZ value (Wet waardering onroerende zaken), which is the assessed market value determined by the municipality each year.
• Sewage and Waste Collection Charges: Annual fees for municipal services like trash collection and sewage maintenance.
• Water Authority Charges: Separate fees paid to regional water boards for water management and flood protection.

Exemptions:

• Low Income: Some municipalities offer partial or full waivers for OZB and waste charges for low-income households with minimal assets.

Is rental income taxed?

The taxation of rental income depends on how the property is classified.

• Primary Residence: If you temporarily rent out your main home (e.g., while working abroad), 70% of the rental income is taxed as income in Box 1.
• Secondary Property: Rental income from investment properties is usually not taxed directly. Instead, the property’s value is taxed as an asset in Box 3 (Wealth Tax).

Exemptions:

• Room Rental Exemption (Kamervrijstelling): If you rent out a small part of your home (like a spare room) while living there, the income may be tax-free if it falls below a certain annual threshold.

First vs second home: tax implications

The Dutch government uses tax policy to prioritize homeowners over investors.

• Transfer Tax: 2% for first-time or moving homeowners vs. 10.4% for those buying second homes or investments.
• Mortgage Interest Deduction: Only available for your primary residence (Box 1). You cannot deduct mortgage interest for investment properties.
• Wealth Tax: Your primary home is excluded from Box 3 calculations, whereas a second home is fully taxable as an asset.

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Wealth taxes in the Netherlands

The Netherlands does not have a “property wealth tax” in the traditional sense, but property is a key component of the general wealth tax known as Box 3.

• Taxable Assets: Savings, stocks, and secondary real estate are grouped here.
• Deemed Returns: You are taxed on a “deemed” or “fictitious” return on these assets rather than actual income.
• Actual Return Statement: Following recent court rulings, you can now use an “Actual Return Statement” if your real earnings were lower than the government’s assumed rate.

How to save money on your property purchase

Purchasing property involves moving significant sums of money, often across borders. You can often save on the hidden fees that banks charge by using specialist online providers.

• Use Wise to pay the seller: You can use Wise to pay the seller or notary directly, often securing the mid-market exchange rate with transparent fees.
• Move money between accounts: If you have already opened a Dutch bank account, you can use Wise to transfer your funds from your home country to your local Dutch account to cover taxes and notary fees without the typical bank markups.

Fill out Wise’s online form today to find out how they can assist you.

How to pay your taxes

The national tax authority in the Netherlands is the Belastingdienst.

• Property Transfer Tax: Usually handled and paid on your behalf by the notary during the transfer of the deed.
• Annual Municipal Taxes: Invoiced directly by your local municipality, usually between January and March.
• Box 1 and Box 3: Reported in your annual income tax return, which must be filed by May 1st each year.

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When to speak to a tax professional

Buying real estate is likely one of the biggest financial decisions you will make. It is often a good idea to speak with a tax professional, especially if:

• You have assets in multiple countries.
• You are buying a property as an investment or buy-to-let.
• You qualify for the 30% ruling, which can impact how your global assets (like foreign property) are taxed in the Netherlands.

Useful resources

Belastingdienst – The official website of the Dutch Tax and Customs Administration for information on national taxes.

Government.nl – The central government’s guide to housing and property transfer tax rates.

Waarderingskamer – Information on how WOZ values are determined and how to object to your assessment.

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