The BEST way for expats to buy a house in the Netherlands

Are you thinking about buying a house in the Netherlands? Lots of expats do at some point during their stay. With the sky-high rental prices in most of the bigger Dutch cities, who can blame them? Especially due to the incredibly low interest rates on mortgages, the tax rebate on your interest payments and that you can sell your house again at any time and don’t need to pay a penalty for cancelling the mortgage. Or some expats even switch their residential mortgage to a buy-to-let mortgage as an investment when they move abroad again.

The process to buy a house in the Netherlands can be confusing though. Trust us, it’s confusing for everyone, not just for expats. It’s not like this is something you will often do. How many houses have you bought in your life?

Hiring an independent mortgage consultant is the easiest way to buy a house. And if you hire us, don’t worry about the fees. We’re licensed in the Netherlands to set up your mortgage and offer complete packages and transparent fees. And our fee is even tax deductible. It’s a win-win situation.

We know that you’re probably thinking: what’s the catch? But seriously, you can’t lose here. You get all the advice and help you need through one of our mortgage consultants that are specialized in working with expats and will guide you through the process till you get the keys to your new home.

Here’s how the process of buying a house works in the Netherlands – that is if you let us help you.

Step 1: Find out how much money you can borrow

Most people will need a mortgage to finance a home. So before placing a bid, it is smart to check how much you can spend. An online quick scan on your maximum mortgage capacity can give you an indication but not nearly as accurate as checking with our mortgage advisors. Some common misconceptions are that buyers think allowances such as a mobility allowance can be included or that a 30% ruling makes a big impact on how much you can borrow. Also, quick scans are mostly based on a standard mortgage set up with the interest fixed for 10 years whilst in fact your advisor will know some alternative set ups on which you can borrow more. You can book an intake with us to hear more about your possibilities.

Step 2: House hunting

Once your mortgage is calculated, you can start house hunting within your price range. Since 2018, you can only finance up to 100% of the property value. You can’t use your mortgage to buy furniture or pay for advisory, notary, or valuation costs. However, these costs are tax deductible if they are directly related to the mortgage application.

More important than ever, get yourself an agent. In the current market, sellers will always prefer an offer coming through an agent rather than yourself. They have a good network and it also shows you are taking it serious and willing to pay for it. We think this is even more a necessity for expats that are more inexperienced to the customs of the Dutch housing market. We can refer you to our network of agents that work in big cities like Amsterdam, Eindhoven, Rotterdam, Utrecht and Den Haag.

If you do decide to search for a house on your own that is possible as well. The website with the best selection in the Netherlands is Funda (www.funda.nl). Through that website, you can call the selling realtor and make an appointment to see the house. We also offer purchase guidance services for clients who are buying without an agent but do need some guidance in the process (such as going through the purchase agreement with you).

Step 3: Sign a provisional purchase agreement

Once you found a house and agreed on a price and conditions with the current homeowners, you can sign a provisional purchase agreement. Don’t let the word provisional confuse you, this is actually a binding contract. After signing the agreement, you have 3 days to change your mind. If you change your mind after those 3 days, you’ll have to pay a fine up to 10% of the agreed purchase price.

You can, however, put limiting conditions in the purchase agreement. Those conditions help dissolve the contract without having to pay the fine. One of the conditions often included is the financial clauses for your mortgage to be approved. It is also a good idea to include a condition for a technical inspection so you can make sure that the house doesn’t have any defects that can cost you a lot of money. If a major defect is found, the condition in your contract allows you to renegotiate the price or cancel the deal.

Next stop: back to your financial advisor to complete your mortgage application.

Step 4: Obtaining a mortgage for your new home

We collect and check all the documents required for your mortgage application. Throughout this entire process, you won’t ever be directly in touch with the mortgage provider. We do that for you. Once your mortgage has been is approved we will go through the mortgage offer with you so you understand exactly what you will be signing. When the mortgage provider finished processing your application, they send the file and instructions to pay out the money to the notary that you selected.

Step 5: Get the keys to your new home

The last step in the process is to go to the notary to sign a transfer deed (between your and the sellers) and mortgage deed (between you and the mortgage provider). At this appointment you meet the current homeowners and the notary will go through the deeds with you. The notary has also collected all the invoices and is in charge of collecting money or paying out to the involved parties. You will then receive the keys and the notary will register the deeds with the Dutch registrar Kadaster.

We couldn’t make this any easier

See how easy that was? You can expect us to guide you through every step of buying your new home. We’re all about making your life in the Netherlands as easy and comfortable as possible. That is why we don’t stop at helping you finance your new home. We also can set up your insurances or utilities such as water, electricity, gas, and internet. Or we can refer you to a tax advisor to help you set up the tax rebate. Just like with every other advice we give, we’re unbiased and give you options to choose from.

Imagine yourself sitting in your new living room after you’ve moved in. You are relaxed and your house is fully functional. You think to yourself: “I never moved house this fast and easy!”

Are you ready to get serious about buying a house? Contact us at info@inexpatfin.nl or fill in the contact form below to set up a free mortgage consult by phone, videochat or in person.

Or, read more about mortgages in the Netherlands.

Buying a house vs renting one

Did the Netherlands become your home more than you consider your home country to be? We have some great news for you! Expats are allowed to buy property in the Netherlands. Whether you see yourself live in the Netherlands forever or you think about buying a house for a good investment. Let’s go through all the benefits of buying a house in the Netherlands. 

This is why buying a house financially exceeds renting one by a mile.

How do the monthly mortgage payments and rental expenses stack up? 

Let’s start by comparing monthly expenses. To do this, we will use an example of a typical 75m2 apartment in Amsterdam.

You can expect to pay around €1500 a month when renting an apartment of 75m2 in Amsterdam. If you would buy the exact same apartment you would have to pay about €500.000. You could fully finance this with an annuity mortgage with the interest fixed at 1,75% for 10 years. This would mean your gross monthly expenses are €1667, net €1567 (net = gross – tax rebate). This seems a bit higher than the monthly rent.

However, the monthly mortgage payment consists of two elements, the interest payment and loan repayment. The average gross monthly interest payment over the full course of the mortgage is €279. This amount is the amount you need to pay the bank for closing the loan. Meaning, you will never see this money again. The rest amount, the average loan repayment, is €1388 a month. After paying this month after month, in about 30 years, you will have paid off your full mortgage.

So, at first glance the total mortgage expenses seemed like they were a bit higher than the renting expenses. But if you compare the money that you are throwing away, the interest payment to renting expenses. This makes buying a much better investment than renting. 

Also noted, when renting a property you can expect annual rental price increases due to inflation. Over time, this will make a big difference in the money you will lose. In case of a mortgage, yearly increases don’t exist. So you will never have to worry about inflation adjustments! 

What happens when I move abroad?

Over time you might consider moving abroad after living in the Netherlands for 10 years. Considering the example above for the 75m2 apartment in Amsterdam, your remaining mortgage debt will be €353.670 (started at €500.000).

Disregarding any house price increases or decreases, you will receive €500.000. The remainder of the debt will go to your bank account: €500.000 – €353.670 = €146.300. A nice return. Do you need to pay tax over this? No!

When moving abroad, renting out your apartment is another option. With a normal mortgage, most banks won’t allow this, as it might lower the value and renters can gain certain rights.

In this case, you could switch your mortgage to a buy-to-let mortgage, which is designed for the renting purpose. The interest will be a little bit higher and one of the conditions is that you can only finance up to about 70% of the value. In this scenario, after 10 years, this is the case, so renting out your place could be an interesting investment.

Explore your options with Independent Expat Finance!

If you want to explore your options, you can reach out to our expat mortgages specialists. Just fill in our contact form down below! Read more about expat morgages or expat insurances here! 

I bought a home and was wondering if I can include renovations in the mortgage?

You bought a beautiful home but the bathroom is a bit run down and needs some work. Or you bought a real fixer-upper that completely needs to be re-done. We often get the questions from clients how this works with a Dutch mortgage. It’s not too complicated but understanding how it works can save you a big head-ache later on.

The maximum loan-to-income (LTI) and the loan-to-value (LTV)

When you buy a home and apply for a mortgage banks look at two things: the maximum loan-to-income (LTI) and also the loan-to-value (LTV). You can never finance more than the lowest of the LTI or LTV. Including renovations generally has implications on the LTV, as you can expect that the renovations will increase the value of the property.

How many renovations can i include in my mortgage?

In order to determine how many renovations you can include we need to look at the LTV of the home. The appraiser will ask you to submit a specification of the renovations and how much you estimate it will cost before he or she visits the property. Anything which is attached to the home can be considered renovations, but be aware furniture is not for example. When the appraiser prepares the valuation report they will put two market values in the report rather than one: one value before renovations and one after renovations.

As a rule of thumb you can count on about 70% of the estimated costs of the renovations to be included in the value after renovations. This means the other 30% need to come from your own savings. So if your own savings are limited, then you can probably not include too much renovations in the mortgage. The money the bank is willing to put up for the renovations (70%) and likewise your part (30%) will be put on a designated bank account. Any receipts or invoices can be submitted after which the bank pays this out to you.

Let us go through a scenario to clarify how it works:

An apartment is listed for 350.000 euro on the market. Based on your income (LTI) the maximum mortgage you can get is 400.000 euro. It is a seller’s market and therefore you place a bid of 375.000 euro. Your bid gets accepted. On top of the one off fees and taxes for buying the home you have a buffer of 15.000 euro. You are contemplating to renovate the apartment and would like to know how much renovations you can include in the mortgage. 

Firstly, to be a bit cautious in our calculation, it is possible the value before renovations will be 5.000 euro less than what you paid for the apartment (as you placed a bid 25.000 eur over the asking price). So let’s put down a value of 370.000 euro before renovations. This means 5.000 is gone from your buffer and you have 10.000 euro left. If we approximately go with the general 70:30 rule on renovations it means that if you can put down 10.000 euro the bank can chip in 20.000 euro for renovations.

So, you can include renovations for about 30.000 euro in your specification that you share with the appraiser. If the value before renovations is like we assumed 370.000 euro then we can expect the value after renovations to be 390.000 euro. This is within your LTI limit of 400.000 euro, so you could get a mortgage for the lowest limit of the two which is 390.000 euro.

So in this case it is possible but you are limited to renovations for about 30.000 euro.

How can we help you with a property which needs some work?

If you are interested to buy a property which needs some work, definitely reach out to us early in the process so that we can run the numbers with you and see what is possible. Or, read more about expat morgages or expat insurances here! 

Moving to the Netherlands as an expat – what to expect?

You’ve decided to take the plunge and are moving to the Netherlands to work here as an expat. You’re excited about this new adventure and you might be wondering what the Dutch are like, what the unwritten rules are, and just generally what you can expect from your soon-to-be home. Whether you come from another European country, the Americas, or Asia, you’re bound to notice some differences about the Dutch culture. We made a list of the five most noticeable things you will find out about the Dutch when you’re moving to the Netherlands.

1. Bikes Everywhere

If you’re moving to the Netherlands and you don’t know how to ride a bike, you better learn quickly. The Dutch ride their bikes pretty much everywhere. If you can reach your destination in biking in under half an hour, the Dutch will go by bike. And it’s not like they don’t have cars. They do, as the traffic jams will prove. They simply have the habit of riding their bikes.

Children learn two things from a very young age: swimming (because there’s water everywhere) and riding a bike. Also, given the parking fees in some cities, the bike is your best option to save money (and boy, the Dutch do not like to spend money on things they find wasteful).

So, start practicing now or take a biking class once you arrive in the Netherlands. And when you do go biking in the Netherlands, please don’t wear a helmet. At least, not if you don’t want to be the laughing stock of your company or neighborhood or frankly, anywhere you go.

Hey, where are you going with that helmet?

2. No privacy

The Dutch are very open people. There aren’t many taboos left in our society and we talk about almost anything. The Dutch lack of privacy is very clear at night when you walk past their houses. You will see families sitting in their living room, watching tv, or having dinner. That’s right, the houses in the Netherlands have big windows that aren’t decorated with drapes or anything to keep glaring eyes out. The Dutch can be very unapologetic: I do whatever I want in my house and I don’t care who sees it or what their opinion is. By the way, it’s totally cool if you look inside. Just nod if someone sees you do it.

Another thing that the Dutch are known for is their directness. You may find yourself being ‘interviewed’ by your colleagues or neighbors. And you might think that the questions are a little too personal, but your Dutch colleague will find his questions perfectly normal. Feel free to interview your colleague back by the way. Go ahead, ask him anything, except don’t ask him how much he earns — that’s a total no-no.

3. Bad customer service

I don’t want to discourage you from moving to the Netherlands, but the one thing expats in the Netherlands complain about is bad customer service. If you’re used to being treated like royalty by customer service in your country, you’re in for a rude awakening.

Expats often feel as if they are treated like a number. You just have to realize that in the Netherlands, everybody has the same rights and duties. Expats are not an exception. Equality in the Netherlands is very important so whether you’re a cleaner or a CEO does not matter how you are treated at places like city hall, the bank, the supermarket, or your phone provider. Also, showing up somewhere doesn’t mean you will be helped. Because when it’s time to go for the customer service agent, it’s time to go. People can come across as uninterested and unwilling to look further than your question and going the extra mile.

4. Liberalism

The Netherlands is a very liberal place. Besides marijuana and prostitution being (semi)legalized, abortion is legal until 24 weeks, and euthanasia is also legal under very strict law. Also, same-sex marriage is legal and being open about one’s sexuality is something normal in general.

But don’t think that the Dutch are lawless. Although they complain a lot about the many rules in society, they do make sure to follow the rules to a T. There’s also weird schizophrenia in the general culture where they feel like everybody should be themselves and anything should be possible but at the same time believe that you should just act normal. What’s normal? Not standing out too much and living by the (unwritten) rules.

5. Happiest place on earth

And you thought Disneyland is the happiest place on earth. Turns out, the Netherlands is one of the happiest places on earth. What better reason for moving to the Netherlands do you need? Surveys have consistently shown that the Dutch rate their lives in the top 10 of the happiest people on earth (we’re currently at number 6).

It might have something to do with the working hours. Dutch people value their spare time a lot. We generally don’t do overtime, especially not unpaid overtime. We love hanging with our family and friends. Although the Dutch, in general, don’t have really close-knit ties with their extended family, they do value their close family a lot. Parents play a big role in their kids’ lives with moms often working part-time to be with their kids and dad’s having a ‘papa-dag’ (daddy-day) once a week.

The Dutch men and women are emancipated. The sexes are perceived as being equal although the traditional roles haven’t been rearranged in most families yet. Men value taking care of their kids just as much as women do though.

Still planning on moving to the Netherlands?

If you’re moving to the Netherlands, you’re probably going to have a great time! Sure, you will need some time to adjust to the customs and ways of the Dutch, but that’s normal for every country. Don’t be afraid to offend people because we aren’t easily offended.

Welcome to the happiest place on earth!

In need of information about the move to the Netherlands, expat mortgages and / or expat insurances? We are happy to help. Get in touch and fill in the form below!

My company is moving to the Netherlands after Brexit, should I come along?

So, Brexit happened. How about that, right? Since the March 2019, we see companies planning their move out of the United Kingdom to the European Union. Different companies have different reasons to move. A few of those reasons are:

1. Gaming companies (and tech companies in general) need a big talent pool to find programmers to develop their games. Before Brexit, people could freely  move from all over the EU to work in the UK. That might become harder after Brexit.

2. Banks are anticipating a move because they need the regulatory framework  the European Union provides.

3. Companies that have manufacturing factories prefer to be in the EU where  the borders are open and they can freely ship their products.

4. It’s important for companies to have a European presence since the European market is much bigger than the UK market.

You might be thinking: how bad is it really with all of those companies that are supposedly moving to Europe? Well, we’re not sure. But it might be bad.

This article claims that 100.000 jobs might leave the UK:

“It’s very hard to tell how many people will actually move. However, it’s clear that EU operations will need to be proper functioning entities and not just letterboxes.”

If your company is one of those companies moving, you might have a hard time competing with the other 99.999 people that will be looking for a new job in Britain soon.

Luckily, you still have a choice. It makes sense for companies to take their employees with them when they move since it takes a lot of effort to train new people for the jobs that are moving. If your company is moving, they might ask you to come along. So, what is your answer? Will you move across the pond?

Benefits of moving to Europe after Brexit

We can imagine that you wouldn’t want to make such a life-altering decision without thinking it through. And, we can also imagine that you feel a bit taken back by the entire situation. After all, you’ve worked so hard to get to where you are right now career-wise. Still, it’s not easy to choose between your career and your home.

Or, are you excited about this opportunity for adventure? Maybe, you think that moving to Europe with your company will even further advance your career. It will definitely show your employer how much you’re invested in the company. It might even create a situation where your company owes you one. Isn’t that a great position to be in?

Actually, there are plenty of good reasons to move with your company. Granted, you won’t be able to see your family as much. That’s a bummer. Also, there will possibly be some language barriers to overcome. Even worse… you’d have to learn to drive on the other side of the road. But think about how much richer it will make you in life experience. Meeting new people. Getting to explore a new cuisine. Learning about a different country and culture. Getting to know yourself really well. Who wouldn’t want that?

Don’t care about getting richer in life experience? Moving to Europe might also bring you financial benefits. Since we can only speak for moving to the Netherlands after Brexit, that’s what we’ll do.

In the Netherlands, expats are eligible for the 30% tax ruling. That means that you’re not paying any taxes on the first 30% of your annual salary. If you buy a house in the Netherlands, you get even more tax benefits. The interest you pay on your mortgage is deducted from your taxes. Even when you rent a house, you still save money since the cost of living in Amsterdam is 18% cheaper than in London.

Think about what you could do with all that extra money you’re saving because of the 30% ruling and the cheaper living costs in the Netherlands… Do you buy that Tesla model S you’ve been dreaming about? Or, do you go on that once in a lifetime luxurious holiday to the Maldives – every year?

What will you need to do to move to Europe after Brexit?

Under the European Union’s right of free movement, it was very easy for Brits to work anywhere in the European Union. EU citizens don’t need a work permit or a residence permit to be able to work and live anywhere in the EU. After Brexit, these rules will most probably change.

Now, there are also 3 million EU nationals living in the UK. If you’re one of them, you’ll still fall under the same EU rule of free movement. You can move back to Europe with your company without needing a permit.

We can’t say anything for sure at this point about what the requirements will be to move to Europe after Brexit. That will depend on the negotiations between the European Union and the United Kingdom. What we can say is that, if you move to Europe before the 2019 Brexit deadline, you’ll probably be allowed to stay after. That’s because there are agreements within the European Union that dictate that withdrawal of a treaty affects the future only.

Don’t let it bring you down

As if kind of being forced to move to another country by forces that are greater than you isn’t enough, you also have to take care of so many things for your move to go well. Most companies that hire expats, help with their relocation. Hopefully, your company will too so that you’ll have one thing less to stress about. There are so many other things however that you need to take care of when you move to another country. You need a bank account, you need housing, you need health insurance and other insurances. And while we can’t help you find a school for your kids or help you adjust to driving on the wrong – kidding, the right – side of the road. We can help you by relieving you from taking care of your personal finances. We’re just saying, don’t write off moving with your company because the thought of everything you need to arrange makes you anxious. We’ve got your back. Because, unlike with ex-spouses of many failed marriages, we still love you…

Is your company moving to the Netherlands after Brexit and you already know you’re going with them? Check out our blog posts on What to expect when you’re moving to the Netherlands and What expats need to know about personal finances in the Netherlands.

Need us to help you moving to the Netherlands after Brexit? Check out all information about expat mortgages and expat insurances.

What insurances do expats in the Netherlands need?

The point of covering risks with insurance is to not fall into a situation where you need to pay extensive bills if something unexpected happens. Most people don’t have a gigantic savings account which they can use when – God forbid – they had a fire in their house or to pay for the funeral of a loved one.

The hardest thing about getting insured in the Netherlands is to find out which insurance you need. To actually get insured is easy, it’s all done online and there are a gazillion insurers that can help you. A quick Google search can get you a long way but we can imagine that choosing the insurer that’s right for you can seem like a daunting task. How do you find out which insurer is reliable and which exact insurances you need?

There are plenty of intermediary websites where you can fill in your details and get a list of insurances that are best suited for you. These websites only tell you about the particular insurance you specified but don’t help you find out which insurances you need for your particular situation.

Popular Insurances

If you accidentally bump into a parked car while riding your bike, the damage to that car can be covered by a liability insurance. This insurance is the reason that a falling out over damaged things won’t happen often between the Dutch.

Legal insurance

Suing in the Netherlands isn’t a common thing at all so you don’t have to get legal insurance for that reason – We see you, American readers, sighing in relief… – Don’t forgo on the legal insurance however as there are other cases in which you could need legal insurance. One of our clients bought a house which he could move into two months after the deed on his rental house expired. He asked his landlord if he could stay two more months in his rental place. The landlord refused because he couldn’t wait for our client to move out. In the current housing market, the landlord can easily ask for a much higher rent than our client was paying. In such cases, it’s nice to have legal insurance to help you.

Travel insurance

Travel insurance can help you when your luggage gets stolen while traveling abroad. It can also help you in case you have an accident or are sick to get you back to the Netherlands. You can choose to include cancellation insurance in your travel insurance. This ensures you that you can cancel or reschedule your trip when something unexpected happens. Without losing your money.

Repatriation insurance

Nobody wants to think about it but if you were to die while living in the Netherlands, where would you want to have your memorial service? With this insurance, your body is repatriated to your home country.

Need help to decide which insurance you need?

The Dutch sure love their insurances. A problem Dutch people have is that they are over-insured as opposed to under-insured. In reality, these are two similar problems with very real consequences. Either way, you’re losing money. Your goal should be to have just the right amount of insurances. Learn everything about expat insurances in the Netherlands.

We know that you most likely don’t want to think about all the horrible stuff that can happen in life. So depressing, right? But sometimes, you need to take charge now to be safe in the future. We can help you get the right insurances in one appointment of an hour. That beats surfing the internet for days, trying to find out what you need and how to get it, right?

Contact us at +31 (0)23-3030110 or send us an email at info@inexpatfin.nl and we’ll set up a free, non-binding appointment. We can also help you switch to another health insurer.

What you need to know about moving to the Netherlands as an expat (even if you already have a relocator)

Getting settled into a new country can be a stressful experience. Luckily there are relocators who can help you make the experience less of a confusing process. Most expats who are moving to the Netherlands will work for a large company. Those companies usually set you up with a relocator who helps all expats of that company with moving to the Netherlands.

Some expats, however, will work for a smaller company and will have to find a relocator on their own. The same goes for all the expat entrepreneurs out there.

Whatever your situation, it’s good to know what to expect of your move to the Netherlands. That way you’ll feel more in control. Which can help you reduce your stress even more.

So, without further ado, these are the steps you need to take to become an expat in the Netherlands:

VISA and Residence Permit

If you’re not a citizen of the European Union, your very first step to moving to the Netherlands is to apply for a VISA. When your VISA request is accepted, you can apply for a residence permit. To apply for a residence permit, the company you’re going to work for needs to be registered as a recognized sponsor at the IND. For your application to be accepted, your salary needs to be sufficient, independent and long-term. The cost to apply for a residence permit is currently €938 and is usually paid for by your employer. To find more information and to apply for the permit, visit the website of the IND.

Get Registered

After getting your residence permit, you’re good to go! As soon as you arrive in the Netherlands, you’ll need to register yourself as a resident. Every city has a different process so you should find out how to register in the city where you’re going to live. Some cities require you to register at city hall, others require you to register at a special expat center. You do need a Dutch address to be able to register in the Netherlands. If you don’t have an address yet, you need to register as soon as you sign a rental lease. Or, if the city where you’re going to live allows it, you can register at the business address of your employer.

The Social Security Number (BSN)

Once you’re registered as a resident, a social security number (BSN) will automatically be assigned to you. Without your BSN, you won’t be able to work in the Netherlands.  Plus you need your BSN to do a number of other things such as to open a Dutch bank account, to apply for health insurance and to apply for the 30% ruling.

Without registering in the Netherlands and without your BSN, you won’t be able to start your life as an expat in the Netherlands. You’ll kind of remain a tourist. If you’re still not registered after 4 months, you become an illegal alien in the Netherlands. If you’ve been working all this time, your employer is in violation of the law and will have to pay a large fine to the Dutch government.

Keep in mind that, if your family is coming to the Netherlands with you, they each need their own BSN. Even the littlest one. Kids, for example, need a BSN to be able to go to school.

Health Insurance

You’re required to take out health insurance within 4 months after your arrival in the Netherlands. There are plenty of health insurance providers in the Netherlands. To find out more about health insurance, read our blogs https://www.inexpatfin.nl/news/31/what-expats-need-to-know-about-personal-finances-when-moving-to-the-netherlands”>here and here.

Driver’s License

Upon arriving in the Netherlands, find out how long you’re allowed to drive with the driver’s license from your country of origin. Driver’s licenses issued in some countries are only valid for 6 months after your arrival in the Netherlands. It’s probably a good idea to find out if and when you need to convert your foreign driver’s license to a Dutch driver’s license. You can find more information here.

The role of your relocator

Now that the most important things you need to do once you arrive in the Netherlands are clear, you might wonder what role your relocator has in all of this.

Well, the relocator guides you through every step of the way. He’s also there to translate anything for you. Your relocator can help you to apply for your residence permit. He can help with shipping your stuff from your current country of residence to the Netherlands. He can find houses for you and make appointments so you can go see those houses as soon as you arrive in the Netherlands. Once you arrive to the Netherlands, your relocator can pick you up from the airport and go to the previously arranged house viewings with you. After you’ve signed your rental lease, your relocator will go with you to city hall to register you. He will help you open a bank account, apply for the 30% ruling, and direct you in how to convert your driver’s license. The relocator can also help you find a general practitioner and a dentist. Furthermore, he can help you find a good school for your kids and just, in general, provide you with all the information that you need about the Netherlands.

Some relocators have preferred companies they work with to take care of certain things for you. However, you’re still the boss of your own relocation. So should you want to use another vendor, perhaps a certain financial intermediary to help you open your bank account or to take out your health insurance with, you’re free to do so! You just have to tell your relocator to contact us at +31 (0)23-3030110 or info@inexpatfin.nl, or you can contact us yourself. Good luck with moving and see you soon in the land of the tulips!

How do taxes for expatriate homeowners work in the Netherlands?

When you buy a home in the Netherlands, you’ll soon be confronted with taxes concerning that new house. Aside from the taxes involved with buying a house, which are usually one-off taxes, there are also a bunch of recurring taxes. Most of the taxes that concern your home are collected by the municipality you live in. A few other taxes are collected by the tax authorities, and a government body called the Waterschap collects one particular kind of tax.

Almost all of the taxes you have to pay for your home are calculated based on the WOZ-Waarde of your house. The WOZ value is calculated every year by your municipality and doesn’t necessarily have to be the same value an appraiser would give your home.

You might have already heard about the possibility to deduct your mortgage interest with the hypotheekrenteaftrek. But unfortunately, when it comes to owning a home, you don’t just get money back from the tax authorities. There are also some taxes that you need to pay. These are the overdrachtsbelasting and the eigenwoningforfait.

Overdrachtsbelasting

When you buy an existing house as opposed to a newly build house, you need to pay overdrachtsbelasting. This is a one-off fee and is 2% of the price of your house. When you buy your home, the notary that also passes the contract handles the declaration of the overdrachtsbelasting. The notary will also pay for the overdrachtsbelasting in your name.

The eigenwoningforfait is a recurring tax collected by the tax authorities from homeowners. Your house is seen as income in kind by the tax authorities. Instead of paying a certain amount of tax for your home, the eigenwoningforfait is added up to your income and you pay for it through your regular income tax filing. It’s calculated based on a percentage of the WOZ-Waarde of your house, and the higher the value of your home, the higher the rate you have to pay.

The eigenwoningforfait is paid through your income taxes every year. Say your house’s WOZ value is €500.000 that means that the eigenwoningforfait is 0,75% of €500.000 is €3750. That amount is added up to the rest of your income. On the other side, however, your hypotheekrenteaftrek is deducted from your income. So, the amount of income tax you’re paying is calculated like this:

yearly salary – hypotheekrenteaftrek + eigenwoningforfait = taxable income

Municipality

Besides the taxes you’re paying to the tax authorities, there are also other taxes that are paid directly to your district. There are the onroerendezaakbelasting, rioolheffing, reinigings- and afvalstoffenheffing.

Onroerendezaakbelasting (OZB)

Your municipality uses this tax for miscellaneous things. The person that owns a house on the 1st of January is paying for the OZB. Even if you’re moving on the 2nd of January, you’re paying the tax for the entire year. The amount of tax you need to pay is a percentage of the WOZ-Waarde. Every municipality, however, decides what the percentage is that you’re paying. To give you an idea of the percentages of the OZB, the lowest rate in 2018 is 0,04139% of the WOZ-Waarde. Surprisingly, it’s the city of Amsterdam that has the lowest OZB percentage in the Netherlands. The highest rate is collected in Nijmegen, and that rate is 0,2612%.

Rioolheffing

You pay this tax for the right to use the sewer. With the charge, your municipality makes sure that the water you use in your home is drained. The city also uses the charge to drain and save rainwater, to keep groundwater in check, and to maintain the sewer system. Again, every municipality decides on the tax amount, but they aren’t allowed to tax their citizens more than what they need to finance the tasks as mentioned earlier.

Reinigings- en afvalstoffenheffing

By paying this tax, your municipality can collect and clean up your garbage disposal. Again, the city decides on the amount you’re paying for this tax, but they’re not allowed to ask for more than they need to perform their task.

Waterschap

The Dutch are known to be masters of water. That’s why they are asked to give their expertise on water all over the world. Historically, the Dutch had to learn to manage the water surrounding the Netherlands. To handle that water an individual government body called the Waterschap was created.

The Waterschap is responsible for managing the water in a designated area. It’s their duty to make sure you receive clean water in your home and to protect you from the water surrounding the Netherlands. To fund the responsibilities of the Waterschap, everyone has to pay waterschapsbelasting.

Taxes for the waterschap responsible for your municipality are paid directly to them. They send you an invoice for the charge once a year, or you can agree with them to pay in installments. The amount of the tax depends on where you live and can be anywhere between €150 and €300 a year. The waterschap is a non-profit organization, so they too won’t ask for more tax than they need.

So, those are all the taxes involved in owning a house. Some of which by the way, are also imposed on renters.

If you’re thinking about buying a house in the Netherlands, why not find out how much you can take out in a mortgage? That way, you can start looking at homes that you know are a right fit for you financially speaking. Contact us at +31 (0)23-3030110 or info@inexpatfin.nl to set up a free and non-binding appointment where we can discuss your options.

Expats: Protect yourself from the costs of conflict and liability in the Netherlands

To live in a society means you have to coexist with different people who have their own opinions and perspectives on life. All those differing opinions and views can cause conflicts. Of course, you don’t mean to get into disagreements or to do anyone harm, but these things can happen to anyone. And when it does, you could be hit with huge legal bills or claims.

Luckily, legal conflicts and liability for damages or harm caused to others can be covered by legal insurance and liability insurance. In this blog, we explain the advantages of taking out those specific insurances

Legal Insurance

Hiring a lawyer can be very expensive. With legal insurance, you can make sure that you’re always represented when problems arise. The disputes that people most often get into are traffic related cases, consumer disputes, and conflicts with employers. But those aren’t the only cases covered by legal insurance. You can get legal assistance in many different situations such as:

• when you get into a conflict at work, for example, to dispute your dismissal
• when you buy a house, and it turns out it has hidden defects
• when a contractor doesn’t perform as expected
• when your holiday reservations aren’t executed as agreed upon
• when you get into a conflict with your neighbors over the borders of your property
• when you get into a car accident

The premium you’re paying for legal insurance is around €150 a year, depending on your exact coverage and the insurance company. Most lawyers charge between €225 and €300 an hour, according to the website advocaatkostenvergelijken.nl. As you can see the yearly premium for legal insurance is cheaper than a single hour of legal counsel. So, taking out legal insurance can really save you a lot of money in case you get into a legal conflict, especially since solving most conflicts takes more than one hour.

Waiting period

Most insurers have a waiting period to prevent that people quickly take out legal insurance the moment they get into a legal conflict. The waiting period is usually six weeks to three months and specifically prevents you from using your insurance for disputes you already had, or disputes that you knew were coming. However, when you get into a totally unexpected conflict such as a traffic accident, you’ll still be covered by your legal insurance.

Added benefits of taking out legal insurance

To be fair, you’re probably not getting into legal conflicts left and right. Nevertheless, there are a few added benefits of taking out legal insurance for those few times you do get into a conflict. These are:

• It gives you immediate and easy access to legal advice and assistance of specialists
• Even if you don’t get into a conflict for many years and keep your legal insurance all that time, you’re still saving money on legal costs because lawyers are expensive
• Your insurer can save you a lot of work when a conflict takes you to court

When you harm someone or cause damage to someone’s property, you’re probably not covered by legal insurance. In those cases you usually need liability insurance.

Liability insurance

Offcourse you will never harm or cause damage to anyone else on purpose. But you could do just that by accident. Even if your actions don’t cause any accidents, you might still be liable for damages to someone else’s property. For example, when you install a new faucet in your bathroom and it causes a leak that seeps through to your neighbors home. You’re liable for the water damage that your neighbor suffers from that leak. And as you probably know, water damage can be costly. The same goes for something that’s entirely out of your control such as a broken water pipe that causes damage in your neighbors home.

Liability insurance covers these types of risks. Even though the liability insurance isn’t mandatory in the Netherlands, the consumers union strongly recommends everyone to take out liability insurance. They advise you to:

• Make sure your own risk is €0
• Thoroughly check what’s covered by each liability insurance before you take one out
• Cover yourself for €1,25 million or more
• Consider including a sports clause if you play a sport that can cause harm to others

Most liability insurances cover every family member living with you as well as visitors staying in your home and employees working in your home. If your pet causes damage to someone, your liability insurance covers it as well. Lastly, when you borrow someone else’s things and accidentally break it, liability insurance also includes the costs of repairing or replacing it.

Taking out the most suitable legal and liability insurance

There are a lot of different options and possibilities within the legal and liability insurances. Some insurers work with modules where you can only take coverage for modules that apply to your specific situation. Being as precise as possible in what to cover and what not to cover can make sure that you’re not over-insured and will save you a lot of money.

At Independent Expat Finance we help you to find the best insurance for you. We aren’t related to any insurer but work solely for you to get you what you need. If you’re interested in taking out legal or liability insurance, contact us at +31 (0)23-3030110 or info@inexpatfin.nl for a free and non-binding appointment.