Many expats choose to rent a home because buying property is hard and difficult work. However, because of the housing shortage in Amsterdam, renting a home can be very expensive. In Amsterdam rental prices can range from €1,250 to €6,800 so that buying property can be very costsaving.
In general expats can think about buying a property if they plan to stay in Amsterdam for more than 5 years and have to pay over €1200 a month to rent a comparable accommodation.
The proces of buying property
Buying property in Amsterdam is a huge undertaking. Rules in another country can be very different. We have listed the steps you have to take if you want to buy property.
- Search for property
- View the property
- Negotiate about the price
- Valuation of the property (for the mortgage)
- Make an offer
- Sign an agreement of sale. An agreement of sale covers the aspects of the proces and protects both parties throughout the proces.
- Usually a 10% deposit has to be paid through a bank within 2 to 3 weeks.
- Inspect the property
- On the day of delivery you sign the contract at a notary.
When you have seen nice property to buy from a former dweller, you do not need a housing permit
If you plan to buy new property under €158,850
(in 2007), you will need a housing permit.
A housing permit can be obtained at the Dienst Wonen
. The conditions you have to meet to receive a housing permit are:
- You are 18 years or older
- You have a valid residence permit.
- You have ties to the area of Amsterdam or Almere. Those ties can be economic or social in nature.
For example, if your work or study is in Amsterdam you have ties in an economic way. If you have been living in Amsterdam for the past two years, or for six years during the last ten years, you have social ties to the region.
- For properties with an all-inclusive rent up to €394, the income of all the members above 18 years of an household is maximally €35,850.
- The property has to fit your household.
This means for households of maximal 2 persons, the living surface is limited to 59m2. For households consisting of 3 or 4 persons it is 79m2 and for households consisting of more than 4 persons the living surface is unlimited.
Costs to buy property
When buying property, add 10 to 12% to the purchase price to cover for extra costs. These costs are derived from the price of the property. This often is indicated in advertisements by 'Kk' after a price. 'Kk' stands for 'kosten koper
' meaning the buyer has to pay the enumerated costs.
- 6% tax
- notary fees
- estate agent fees
- property registration costs
- mortgage administration fees.
80% of all land in the region of Amsterdam is owned by the municipality. Many property for sale is build on rented land from the municipality. The right to use the land your property is build on is called 'erfpacht
'. When buying property, you buy the rights to lease the land with it. If the property owner dies, the erfpacht rights will transfer to the inheritor(s).
Erfpacht is not a fixed cost. Ground rent contracts run for a specific period of time. Before you buy property you should check the erfpacht contract for its expiring date. When a contract expires, municipality adjusts the rent based on the present value of the land.
Mortgages in the Netherlands are tax-deductible. Although the Dutch government has debated a lot about this subject, it is not likely to change because of the current political coalition. Therefore, taxpayers in the Netherlands still benefit from a 52% tax relief on their mortgage interest.
For EU citizens it is quite easy to get a mortgage similar to those available to Dutch citizens. It is always recommendable to employ the services of an estate agent who understands the nuances of such issues. Dutch law prescribes financial advisers and other types of brokers or intermediaries to be registered with the AFM (Authority for the Financial Markets or Autoriteit Financiele Markten
). The AFM examines everyone who is financially active. Companies offering mortgages are examined by the AFM to verify whether they inform their client properly. Moreover, the AFM checks whether the Financial Information Leaflet
is complete and accurate. On the AFM website
you can find more about mortgages and other financial products.