Dutch mortgages

When an expat wants to apply for a mortgage in the Netherlands, he/she faces several challenges. Examples are:

• the residence status
• the employment contract and
• the possible maximum mortgage amount.

On the other hand, having a Dutch mortgage creates tax advantages as well. These challenges and advantages for expats concerning Dutch mortgages will be explained below.

The residence status
European Union expats don’t need a residence permit for staying and working in the Netherlands. For non-EU expatriates a residence permit is required to work in the Netherlands or stay for more than 90 days. There are two kinds of residence permit. A temporary residence permit (Document I) and a permanent residence permit (Document II). In both cases it is possible to apply for a mortgage although the treatment of the application might be different.
In case an expatriate is highly qualified, he/she can also apply for the highly skilled migrant status. This status only takes a short time to finalise. An extra advantage of this status is that an expat with this status can apply for the 30% facility.

The employment contract
A second requirement for mortgages in the Netherlands is an indefinite employment contract. A temporary contract with a letter of intent will be satisfactory as well. For all other types of contract (e.g. a contractor) there might also be possibilities to apply for a mortgage.

The maximum mortgage amount
The maximum mortgage amount is based on the gross salary of the applicant and the value of the property. An expat has to be aware of the fact that, for instance, bonuses will be treated separately.

Other requirements
There are a some other requirements that might affect the best mortgage solution for expats.

• Split salary - Some expatriates have income in several countries
• Savings - This will directly influence the maximum mortgage amount.
• Assets in other countries -These assets might create an extra income for the expatriate.
• 30% facility - Sometimes the 30% facility is misinterpreted by mortgage providers. The 30% facility is a tax advantage, which means that the taxable, not the actual, income is reduced by 30%.

Tax advantages.
When an expat has a mortgage in the Netherlands there are several tax advantages:

• Monthly interest payments for residential properties are tax deductible.
• Notary costs for registering the mortgage are deductible in the year the property is bought
• The closing fee the bank counts for your mortgage is tax deductible up to a maximum of € 3,630 a year.
• The costs of the valuation of the property are tax deductible.

Expat mortgage advice.
H&N Associates can provide expatriates with professional mortgage advice. H&N Associates aims to find the best tailor made mortgage solution for expatriates. On this website you can read more about the types of mortgages and the options expats have in choosing their mortgage.