Buying a home in the Netherlands? Don't forget these one-off costs

Buying a home in the Netherlands? Don't forget these one-off costs

Buying a house is one of the most significant financial investments in a lifetime; you will have to deal with one-off costs such as an appraisal report and expenses for the buyer. There is uncertainty about the one-off costs you incur as a buyer. To help you take the first step in house hunting, we have listed all the one-off costs you incur when buying a house.

Here's an overview of the costs you must consider when buying a house.

Costs of buying a house:

  1. Costs Buyer (Kosten Koper)
    a. Notary fees mortgage
    b. Transfer tax
  2. Broker Fees: Walter
  3. Advice and mortgage costs
  4. Appraisals Report
  5. Bank Guarantee
  6. Optional: National Mortgage Guarantee (NHG)
  7. Technical Inspection
  8. Optional: Interest and Costs Bridging Loan

1. Costs Buyer (Kosten Koper)

When you look at a house, you often see 'kk' at the asking price; this stands for 'buyer's costs. What does buyer cost mean? Buyer costs are the additional legal costs you must pay as a home buyer. The buyer's costs consist of transfer tax and notary fees.

How much are the buyer's costs? People often think the buyer costs alone are 10% of the house's value, but the costs are much lower. For the buyer's expenses, you should expect an amount of about 2.5% to 3% of the purchase price. The most significant part of this is the transfer tax.

Costs Purchaser's new home

When you buy a new-build home, there are no buyer costs. You often see 'von' at the asking price. Von stands for 'free in the name' and means no transfer tax and notary costs associated with buying the house. The same applies when buying a houseboat. However, there may be other costs associated with purchasing a houseboat.

Mortgage notary fees

To take out a mortgage in full, you must visit a notary. The civil law notary registers your mortgage, links it to your home, ensures that the purchase price reaches the seller, and registers you with the Land Registry.

You pay the civil-law notary per deed drawn up. These are the hours needed to check your data and register with the Land Registry. These costs differ per notary. On average, the notary costs are € 1,100 when buying a house.

Transfer tax

You pay this tax if you become an existing house owner at the transfer time. This tax is included on the notarial invoice, the final statement you receive from the notary. This is because the civil law notary takes care of the financial settlement and reports the transfer tax on your behalf.

The transfer tax is 2% for a house and 6% for all other immovable property, such as business premises. Whether you buy or receive the property, no distinction is made for the transfer tax.

There are a few exceptions. You can be exempt from transfer tax if, for example, you pay sales tax or buy an estate. You also do not pay when you become the property owner because you marry or inherit immovable property.

2. Broker Fees

You can choose to outsource some things when you buy a house. For example, a purchase broker can help you find a home, accompany you to the viewings and even guide you with the key transfer at the notary.

A broker charges a commission or compensation for their work to earn money with this. In the Netherlands, brokers are allowed to determine how much they ask. Although you can negotiate, it is usually 1.5% of the purchase price. This should always include VAT, but pay attention to this. The commission does not include start-up costs. These are usually between € 300 and € 500.

Whether or not you use a real estate agent when buying a house is entirely up to you. There are advantages and disadvantages to both options.

Buying a house without a digital real estate agent

Do you want to buy your dream home without high broker fees? Then go for Walter, your digital buying agent. Instead of the broker's commission, which is - to put it mildly - relatively unstable, you pay a one-time fixed amount of € 3,950. We will assign you to a Walter expert, who will calculate the house's value for you and determine how much the house will be sold for. We will also discuss the correct conditions of the offer with you. No matter how often you want to place a bid or how long your search takes, there are no additional costs.

3. Advice and mortgage costs

Most people can still use some help when taking out a mortgage. You can enlist the help of a mortgage advisor for this.

You usually discuss an amount in advance with your chosen advisor about what the advice will cost. This amount differs per organization. The costs for mortgage advice vary considerably depending on the company.

In terms of time, there is a difference if you buy a house for the first time or if you move on. It often takes the adviser a little more time if you already have a mortgage. Sometimes you can include the costs in your mortgage amount; ask your mortgage advisor about this.

4. Appraisal Report

When buying a house, the bank wants an official appraisal report. This report gives them an official document of the value of the collateral of your mortgage.

An appraisal report is an official valuation of a house, business premises, or other objects. An appraiser visits the house and looks at the pros and cons, such as size, state, and location. The costs of this are determined nationally and vary between € 650 and € 750 per appraisal. At Walter, the valuation is included in our service.

With a mortgage, you can borrow up to 100% of the home's market value. The appraisal report determines the market value and is, therefore, essential for the amount of your mortgage.

A bank guarantee must be transferred to the account of the civil law notary within two weeks after signing the preliminary purchase contract.

5. Bank Guarantee

The home seller naturally wants to ensure that you, the buyer, can pay for the house and will buy it. This is why a deposit must be paid before you go to the notary and pass the house. The seller is entitled to the deposit if the sale suddenly falls through.

This 'down payment is often 10% of the purchase price. Most people don't have this amount of money in their pocket. A bank guarantee offers a solution. A third party will advance the deposit if the sale does not go through. If the deal passes through, the agreement ends.

A bank guarantee usually is 1% of the deposit. The bank pays this amount because it guarantees it. You then have a debt with the bank that is included in your mortgage. In the event of resolutive conditions, the deposit will lapse. A bank guarantee must be transferred to the account of the civil law notary within two weeks after signing the preliminary purchase contract.

6. National Mortgage Guarantee

You are eligible for a mortgage with NHG if you meet certain conditions. The NHG guarantees that your mortgage fits your income with certainty. This way you never borrow too much and you ensure that you have enough left over for other expenses in addition to all monthly housing costs. If you are left with a residual debt after the sale, this will be repaid to the bank by NHG.

You are not always eligible for NHG, the average house price determines this. The cost limit will increase in 2022 from the current €325,000 to €355,000. Therefore, your house can not cost more than this if you want to use a National Mortgage Guarantee.

7. Technical inspection

The building inspection gives you insight into the state of maintenance of a home. A building inspector draws up a report in which findings are noted per part of the house. You also often receive photos showing what and where something is wrong. The costs for a building technical inspection report differ per batch, but you already have one from € 425.

The inspector also estimates costs that entail overdue maintenance or damage. It distinguishes between repair work and what can be taken on in the future.

At Walter, the building inspection is included in our service.

But what exactly does it cost?

It's hard to imagine what all those percentages really mean. We have linked the costs to a typical Dutch house to give you an idea. While the average house price in the Netherlands in 2019 amounts to € 309,000, this house in Ridderkerk is for sale for just a little more, namely € 356,000.

For our calculation, we have used average and market prices.

Cost overview buying a house

Costs Price
1 Costs Buyer (k.k):
1a Notary Fees € 1,100
1b Transfer tax (2%) € 7,120
2 Optional: Purchase broker (1,5%) € 5,340
2 Optional: Walter (on-off) € 3,950
3 Financial Advice and Mediation Costs € 1,700
4 Appraisal report € 650
5 Bank guarantee € 356
7 N/A: NHG -
8 Optional: Technical Inspection € 425
Total with purchase broker € 16,691
**Total with Walter ** € 14,201

Example of the costs for the house in Ridderkerk

Optional: Interest and Costs Bridging Loan

A final thing you should pay attention to when you move from one owner-occupied home to another is the cost of a bridge loan.

A bridge loan is a loan that helps you bridge the period between buying and selling and when you want to take the equity to your new home. You must demonstrate that you can bear the higher costs to get this. The interest you pay on the bridge loan is usually slightly higher than the interest on a mortgage.

What does this mean for you?

If you look at the total amount, this adds up to almost 10% of the purchase price. However, you cannot take out a mortgage that allows you to pay all one-off costs since you can borrow up to 100% of the home value.

What is important to know is that these are the gross costs. You can deduct most of the one-off expenses in your income tax return for the year you bought your house. After taxes, the one-off costs when buying a house amount to 5 to 6% of the purchase price.

Even though you can expect a lot of money back in the year after the purchase, it is still helpful to have a good amount of money ready when you buy a house. The good news is that you can often finance up to 50-60% of the renovation costs as an increase in value.

Now that you know what is involved, you can calculate the one-time costs of buying a house yourself. Good luck!

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