Buying a house or apartment
If you’re intending to stay in The Hague for a longer period of time, you may be thinking about buying a home. To help you learn about the local property market and the various requirements for purchasing a home in the Netherlands, there are many agents and organisations that you can approach to help you learn about the local property market, regulations, and requirements. International buyers are usually able to arrange a mortgage if they require one. There are dedicated expat mortgage advisors at banks and several independent brokers that specialise in this market.
Where to Find Houses for Sale
It’s a good idea to speak to a mortgage advisor and a real-estate agent once you decide to begin your house search and research apartments or houses for sale in The Hague. This gives you access to professional advice on your budget, what to look out for, help with the bidding process, and information on your rights. Most real-estate agents in The Hague are very familiar with internationals looking for a place to live. The NVM (Netherlands Association of Estate Agents) is the largest association of housing agents in the Netherlands. About 75% of all Dutch house sales take place through an NVM agent, and so they can usually be relied upon to have expert knowledge. An agent will negotiate on your behalf to find a home that meets your needs, which saves you a lot of time and effort. As they work on commission, always check their fees beforehand.
When you’re ready to start searching, try independent websites such as Funda, which have a selection of apartments and houses for sale in the Netherlands. You can filter these by location and budget.
Know What You’re Buying: Freehold or Leasehold
Properties in the Netherlands are sold as either freehold (eigen grond) or leasehold (erfpacht). With freehold properties, you also become the owner of the land your property is built on. Leasehold properties incur extra yearly costs because you’re required to pay taxes to the municipality (or leaseholder) for owning the property.
When properties are bought and sold in the Netherlands, a survey is undertaken by two professional surveyors: one representing the buying party and one representing the selling party. For more insights on the process, consult IamExpat’s property buying checklist.
Arranging a Mortgage
Buying a home usually begins with arranging a Dutch mortgage (hypotheek). Eligibility and the amount that you can borrow is calculated based on your income, savings, and the property you have in mind. Mortgages usually run for a 20- or 30-year term, but you can discuss a shorter period with your mortgage adviser. In the Netherlands, the interest paid on your mortgage is partially tax-deductible, so many internationals find buying a home to be a cost-efficient option.
Types of Mortgages
The wide variety of options in the Dutch mortgage market can at first appear overwhelming to those who are unfamiliar with the possibilities. Ask a trusted mortgage adviser to explain the details and recommend the best solution for you.
Annuities mortgage (annuïteitenhypotheek)
In the early years of paying for your mortgage, an annuities plan often requires low monthly payments. Mostly, you will be paying the interest but also a small portion of the actual loan. This means that your interest rate will go down as you pay off more over time. Towards the end of the mortgage period, this balance reverses, meaning you will pay lower interest payments and higher loan repayments. Your net housing costs will increase slightly since only the interest on the loan is tax deductible.
Linear mortgage (lineaire hypotheek)
Unlike the annuities mortgage, the linear mortgage is a fixed amount per month by which you will repay the initial loan. You will pay interest on top of this, but these payments will reduce over time as you are paying off the initial loan, which eventually leads to decreased interest payments. This is ideal if you want to repay your mortgage as soon as possible, or if you are expecting a reduced income over time. Be aware that initial repayments will be relatively high and you will not take full advantage of the tax-deductible mortgage interest.
Other Repayment Models
Most alternative Dutch mortgage models will be variations on annuities and linear mortgages. Choosing one of these models may mean you are ineligible for mortgage tax relief. Consult a financial adviser for details.
- Credit mortgage (krediethypotheek)
This mortgage is like a flexible loan: you can deposit and withdraw money, like a bank account. You pay monthly interest on the money that you borrow, which will depend on the value of the property you have bought.
- Interest-only mortgage (aflossingsvrije hypotheek)
Under certain circumstances, the bank will allow you to only pay interest on a monthly basis and to repay the capital at a later date from savings or investment accounts.
- Investment account mortgage (beleggingshypotheek)
You invest a premium into a stock market account through an investment account mortgage. This can be done with a one-time, monthly or annual payment.
- Hybrid mortgage (hybride hypotheek)
A combined interest-only and life insurance mortgage. You are able to switch from a mutual fund with investment risk to a guaranteed return on your money.
- Life insurance mortgage (levenhypotheek)
You will pay a monthly or annual premium, which can include a life insurance. Under certain circumstances, this policy may be tax-free.
- Savings account mortgage (spaarhypotheek)
By linking a savings account to your mortgage, you pay monthly interest and deposit money in your savings account with a fixed interest rate. Since this interest rate is equal to your mortgage interest, you can repay the mortgage fully from your savings account at the end of the mortgage term.
Now that you’re prepared to buy a home in the Hague, explore local neighbourhoods, and learn about other cities in The Hague region. You can also find information on moving and purchasing furniture and arranging home insurance, along with other essential steps.