The reason we decided to write this article is based on on the fact that majority of our clients do not have realistic expectations when it comes to the amount they are prepared to spend as out of pocket expenses when buying a property in Amsterdam. This might be related to the fact that until recently you were allowed to borrow 101% of the market value of a property. Please bear in mind that a market value of a property is defined in an appraisal report of an independent real estate agent, and is based on references from the area. It is not necessarily the same amount as your offer on a property.
The Following expenses accrued while buying your new home will be tax deductible:
- mortgage advisor’s costs
- costs of a notary for mortgage-related queries including the VAT
- valuation report necessary for your mortgage application
- costs for an application for a National mortgage guarantee (NHG)
The Following costs are not deductible:
- real estate agent’s fee
- Interpreter costs. If you do not speak Dutch, an interpreter must be present when signing a deed of transfer
- costs of notary related to purchase agreement
- renovation costs
- 2% transfer tax
- costs of a construction survey if necessary
- In case of an apartment, there are usually entry fees to the association of owners (VVE)
- the difference between the amount you offered on a property and the market value in an appraisal report.
An indication of the extra costs of buying a property in the Netherlands
Mike is an American single expat who just bought a property for € 349.000. The appraisal report shows the market value of the apartment is € 340.000. In 2018 you can secure a mortgage on 100% of a market value, in this case, Mike can borrow 340.000 and must pay the remaining € 9.000 from his own savings.
The following is a calculation of all of his expenses that he must cover using his savings on the day of the legal transfer.
- 2% transfer tax over € 349.000 is € 6980 (the actual amount might be a bit lower depending on the amount of € in the VVE reserves)
- the difference between the appraisal market value and the purchase price € 9000
- costs of notary € 1412
- compulsory interpreter during the legal transfer € 260
- mortgage advisor € 3200
- 10% bank guarantee € 500
- appraisal report € 550
- real estate agent € 4000
- construction survey € 425
- prepaid taxes and service costs to be repaid to the seller at the day of legal transfer € 550
- entry fee of the association of owners € 150
In total Mike will pay the amount of € 27.027 on the day of legal transfer. This calculation is an example and the costs will vary depending on the property and the service providers used.
Do you have any questions or comments about this article, feel free to contact us!