Times are changing! Where expats used to be doubtful on purchasing a house shortly after arrival and prefered renting, buying property is now seen as a solid investment. A decade ago house purchasing in the Netherlands was considered a risk, but in 2022 it is common belief that buying is more profitable than renting. And rightly so.
A combination of developments has flipped the market upside down. Allow us to explain:
- The mortgage interest rates have gone down
- companies gain less benefits for renting apartments
- The value of property has been on the rise since 2013
The latter has to be explained, as the first thought you have as a reader must be: what goes up for almost ten years must come down sooner or later. There are trends in the Netherlands however that would contradict this assumption. First of all there is a shortage of almost 300.000 houses, secondly the government opened up the Dutch housing market for foreign investing and finally the Netherlands has difficulty building new property due to its environmental goals and size.
There is no sign of the market cooling down, so this is a perfect moment to purchase a house in the Netherlands if you can afford it and if you plan to stay longer than three years. If you plan to stay a shorter period of time, renting might still be the best solution for you as purchasing a house costs at least 6 percent of the purchase price.
Are there restrictions to purchasing a house as an expat?
No. That is to say, there are no restrictions on foreigners purchasing houses in the Netherlands. That said, there are certain requirements for obtaining mortgages. It is important that you are well informed of these requirements before starting a purchase process. Feel free to contact us for advice on procedures and location. Especially when you are a non-EU citizen, as different rules apply to you. Or when you are completely new to living in the Netherlands and want to learn about the environment, neighborhoods and prospects.
Also when you do not fall into these two categories, it is useful to learn about Dutch specificalities such as owner’s associations, the (partial) ownership of the ground on which your property stands and tax returns on your mortgage interest.
For these reasons, more than 80% of the Dutch citizens work with a representative agent that guides them through the purchasing process, the legal registration process and applying for a mortgage. We4Expats have specific knowledge on representing expats in purchasing a house in the Netherlands. Let us be your translator, both literally and metaphorically.
Costs structure property transaction
The seller will be responsible for the cost of their real estate agent, most other fees however are handled by the buyer. As said above, you have to count on 6% incidental costs when purchasing a house in the Netherlands. These costs are build up as followed:
- Transition tax: 2% of the sales price
- Notary fees: about €1500 on average
- Mortgage fees: about €1000, depending on the sum of the transaction
- Representing agent fees: inform with us
- Appraisal fee: about €300
- Technical inspection of the property: €350
These costs are not including any costs for decorating, painting or renovating. The technical inspection of the property is optional, but is recommended as it will inform you timely on any flaws the house might have (to avoid future costs).
With We4Expats as your representative, you are guaranteed a thorough inspection of the property value.
Renting or buying?
There is no straight answer to this question that applies to all. Both renting and buying have their benefits and risks. It is important that you get yourself well informed on the pros and cons of both. In general, we would say that short stay lends itself better for renting. Also people that are new to the Netherlands and have yet to discover cities, culture and lifestyle could benefit from the flexibility of renting. People that are looking to build their future in the Netherlands however are more suited with purchasing a house.
Since these are generalizations and personal circumstances or preferences are not taken into account, we like to hear your story and wishes so we can give advice that suits your situation best.
The purchasing process
Congratulations! You found a place. Now what happens when you find a suitable house with our help and have come to an agreement with the seller?
We will send the necessary documents to the notary, he or she will make the purchase contract. Only after we ensure that all terms and resolutive conditions are included and we have discussed and reviewed this with you, you will sign the purchase agreement.
After a cooling-off period of three days and the technical inspection of the house was satisfactory, the property will be valued and you can continue for a mortgage application.
Time to celebrate
You will now have four weeks to come to an agreement with a bank about a mortgage. We will of course help you with the necessary documentation when filing an application. Once your financial situation has been reviewed, the bank will make you an offer.
With the sales agreement and mortgage you can finally sign the papers. As these deeds will be in Dutch, we will provide a translator in the requested language. Once you have put down your signature it is time to celebrate!