Buying a home in the Netherlands can be overwhelming, especially for first-time buyers. In this blog, we have joined Dutch mortgage experts from Mister Mortgage and compiled answers to 10 frequently asked questions that can help you make informed decisions while purchasing your dream home in the Netherlands.
1. Should I purchase a home now or wait for a decline in interest rates?
When buying a home, the timing cannot be classified as something good or bad. The answer to the question depends on whether you’re ready to have your own place and have the budget to start the journey. Although interest rates have risen in the past year, the current rate remains historically low.
Personal and financial circumstances may hold more weight in the decision-making process of becoming a homeowner.
If you are uncertain about whether it's the appropriate time to purchase, you may want to consider the following topics:
- Benefits of buying or renting
- Effect of economic trends on the housing market
- Your personal financial situation
Read more: Why increasing mortgage interest rates should not scare you.
2. Can I purchase a property and rent it out after a year?
When you purchase a home, you enter into a legally binding agreement with your lender, which typically includes a section known as the "rental clause." This clause specifies that subletting your property to a third party without written consent from your lender is not allowed.
If you want to legally rent your home, you need to refinance your mortgage from a residential to buy to let mortgage.
Read more: Renting a home with a residential mortgage
3. What is the minimum duration of employment required in the Netherlands for mortgage approval?
There is no specific residency requirement for mortgage approval in the Netherlands.
You need a BSN number to apply for a mortgage to get a mortgage approved. To initiate the mortgage application process, you must submit the following documents:
- Proof of income
- Proof of assets
- Proof of debts
- Documents about the property.
4. How do you secure the best mortgage terms - do you have specific bank partnerships or collaborations?
The team at Mister Mortgage works with and compares more than 30 mortgage lenders in order to find the best mortgage conditions for each client. Since Mister Mortgage is an independent mortgage brokerage firm, they don’t get paid commissions by the bank, which ensures that you as a home buyer are getting the best terms for you.
5. What is the maximum amount of money that your parents can give you as a donation? Additionally, is it necessary for me to submit a tax return?
A donation might not be subject to Dutch tax laws if you receive a gift from abroad.
- If the gift is given by a non-resident or a non-Dutch former resident who emigrated from the Netherlands more than a year ago, no gift tax is due.
- If someone transfers a gift that never lived in the Netherlands, there's also no gift tax due.
Regarding filing a tax return, it all depends on:
- Is the donor Dutch? You must file a gift tax return if they relocated overseas less than ten years ago.
- Is the donor not a Dutch citizen? If the donor relocated outside the Netherlands less than a year ago, you must file a tax return.
- Did the donor never live in the Netherlands? Then you don't need to file a tax return.
6. What documents do I need for the buying process?
The documents required for the buying process in the Netherlands can vary depending on the type of property you are purchasing and your personal situation. Typically, you will need a valid passport or ID, proof of income and employment, and a bank statement. Additionally, you may also need to obtain a Dutch social security number (BSN), which can be obtained from the Dutch tax office.
7. How much savings do I need when buying a home in the Netherlands?
In the Netherlands, you are not required to pay a down payment in order to get a mortgage. As such, the only costs you must pay yourself are the purchasing (or closing) costs. These costs include fees such as the notary fee, transfer tax, appraisal and inspection fees, etc. As a general rule, you will need approximately 5% of the value of the house (for the buyer’s costs). You can watch our video How much it costs to buy a home in the Netherlands to get an exact breakdown of various costs.
That said, having additional savings can help to strengthen your personal buyer’s profile when placing bids, as it signals to the seller that you are a reliable buyer. Additional savings will also be necessary if you’re looking to purchase a property with a price that is higher than the amount your mortgage provider is willing to lend.
8. How can I calculate the actual value of a property?
In our opinion, the best way to calculate the value of a property is to consult a home-buying specialist, as experienced agencies (such as ourselves at Expat Housing Network) have built sophisticated models and tools to obtain the best estimates.
That said, you can still estimate the value of a property by conducting some research of your own. In the Netherlands, property sales data is publicly available for a fee on kadaster.nl. By comparing previously sold properties that are similar to the property in which you’d like to buy (i.e. similar size, neighborhood, number of bedrooms, etc.), you can obtain the market value of what your property might have recently sold for. Of course, these properties might’ve been sold months ago, so don’t forget to adjust for inflation and market changes over time (i.e. appreciation, new laws, the rental market, etc.).
9. Is there any difference in the buying process for Non-EU residents living in the Netherlands?
There is no difference in terms of the buying process for EU and non-EU residents. However, non-EU residents may face additional requirements if they are looking to get a mortgage. For example, non-EU residents may need to obtain a BSN or a social security number to buy the property or they may need to demonstrate that they have a certain level of income or assets.
10. How much should you overbid?
Before answering this question, it’s critical to understand the difference between the asking price, the market (true) value of a property, and the purchase price.
The asking price is a relatively arbitrary number provided by the selling agent and is almost always set below the market value of a property. This is because selling agents tend to use a lower asking price to attract buyers, in an attempt to facilitate emotional competition around the property. Whereas the market value of a property is the true value of the property - a value that a professional real estate agent or appraiser can estimate for you. This is also the maximum amount in which a mortgage provider will be willing to lend. Finally, the purchase price is the amount of the winning bid, which is the price that the buyer actually pays.
Now, back to the original question. When considering overbidding, we urge you to make your bid based on the market value, not the asking price. Note that any amount you bid over the market value will need to be paid with your own funds. Once you determine the market value of a property, you can decide whether or not (and by how much) you’d like to bid over that amount. Factors you should consider when making this decision include the popularity of the property, how much you really want the home, how much extra you are able to afford, the number of options you have, how long the property has been on the market, how many properties you’ve already bid on, etc.
And, there you go! We understand that navigating a dynamic housing market can be complicated, especially for expats. However, by being well-prepared and having access to the necessary information, you can make informed housing decisions. We sincerely hope that this blog has provided you with helpful insights and answered some of your questions.
If you’d like to learn more about buying a home in the Netherlands as an expat, we invite you to join our upcoming Buying a Home in the Netherlands webinar with Mister Mortgage.
Prefer to chat one-on-one? Schedule a complimentary consultation with an Expat Buying Specialist. We wish you all the best on your home-buying journey!