What is the true cost of buying a house in the Netherlands?
As a first-time buyer, you can cut costs by using a flat fee service such as myDutchMortgage.online to sort out your mortgage.
It might work out less expensive than renting, but buying a house in the Netherlands is not cheap - and that is not just due to the soaring property prices. Here are eight additional expenses you will probably have to face.
Real estate agent
Often in the Netherlands, a house sale will involve two estate agents: one acting on behalf of the seller and one acting on behalf of the buyer. If you used an estate agent to negotiate the sale on your behalf - and you probably should, given the pressure in the Dutch housing market at the moment - you will have to pay a fee for their services. The amount is usually open to negotiation but will probably be between 0,85 and 1,25 percent of the purchase price.
This means that all the costs involved in buying a house - transferring ownership in the land registry, notarial costs for drawing up the contract, and the property transfer tax, if applicable to you - are to be paid by the buyer. This usually adds up to around 5 percent of the value of the property.
A notary is a civil lawyer specialised in family and private law who will execute the formal documents involved in buying a home. You cannot buy a home without the involvement of a notary. Generally, they will charge you a fee of roughly between 800 euros and 1.900 euros, but you can deduct this cost from tax.
Overdrachtsbelasting, or property transfer tax, amounts to 2 percent of the price of the property for most people, however, in 2021 it was cut to zero for first-time buyers under the age of 35 as long as the property does not cost more than 400.000 euros. It’s worth pointing out here that the average price buyers paid for a property in the first quarter of 2021 was 410.000 euros.
A taxation report is a formal report valuing the property by a licenced valuation company. Your mortgage provider will want to know if the property you are buying is worth the money. Count on this costing about 500 euros if the valuation is straightforward, but you can find them cheaper if you shop around.
Homeowners’ association (VVE)
If you buy a property in an apartment complex, under Dutch law you will have to become a member of the Vereniging van Eigenaren (VVE). The VVE ensures the property is well maintained and insured and deals with communal expenses. There are no hard and fast rules about how much you will pay but count on at least 100 euros a month for a modest apartment in a small block, more if your apartment is in a listed building or has additional facilities.
Official property valuation (WOZ)
The Wet Waardering Onroerende Zaken or WOZ is the official value of your property, determined by your local authority. The WOZ value is adjusted once a year based on price movements in your neighbourhood, and is used to calculate the amount of local council taxes (OZB) that homeowners pay. If you buy a house in Amsterdam, for example, in 2021, you will pay 0,0428 percent of the value of your property in local tax, while in The Hague you will pay 0,0516 percent.
Deemed rental value (Eigenwoningforfait)
Eigenwoningforfait is basically a small percentage of the official value of your property which is added to your income and taxed. In 2021, this is 0,5 percent for properties valued at under 1.100.000 euros. Often, this can be offset against your mortgage interest payments.
Some good news
Of course, there is some good news. The Netherlands is one of the few countries in Europe with such a generous tax break or hypotheekaftrek on homeownership. This means that you can offset the cost of your interest payments against tax for a maximum of 30 years. In 2021, the rate of deduction is 43 percent, but this is gradually being reduced by the government.
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