This publication proceeds on the assumption of a sort of typical situation. Because, however, no two situations are exactly alike, the answers can be different under specific circumstances. The lawyer involved in a transaction can incorporate additional arrangements between the parties into the contract and advise on a specific situation. If you have any queries with regard to real estate law in The Netherlands, please feel free to contact us.

What are the usual steps to buy real estate property in the Netherlands?

Buying real estate property in the Netherlands is an option that is open to all, which means that there are no restrictions on expats or foreign visitors who want to buy a property. Ownership of a real estate property is transferred to the buyer when the parties have agreed the essential purchase terms, mainly the identification of the property and price. This is usually achieved in two steps. First, the parties sign a private contract agreeing on the main purchase terms and conditions and exchange 10% of the price as down payment. Second, they appear in front of a Public Notary in order to sign the purchase deed, pay the price in full and hand over the keys of the property to the buyer. Consequently, the notary registers the property transfer at the land registry office, hereby completing the process.

In business to business transactions a written contract is not required. In case one of the parties is a consumer it is essential to have a written agreement.

What legal checks should be done before buying a property?

The seller has a duty to disclose and the buyer has an obligation to investigate. Therefore, it is recommended that the buyer conduct a due diligence so that certain risks have been identified for a sale and can be overcome in the purchase agreement.

There are various aspects that can be researched by different parties.  Before passing the deed, the notary will verify the title and ownership of the seller and will examine all information about the property and whether there are obligations attached to the new property.

Furthermore it is recommended that the buyer engages a lawyer or another advisor to carry out due diligence in order to confirm that:

  • the property complies with the urban planning regulations of the area;
  • the property is in good conditions; (an architectural report is recommended).


Buying through a company.

Using a company as a vehicle to buy property instead of a private transaction, is entered by the differences in taxation.

Buying property as a private investment, and makes your investment part tax level “box 3”. The advantage is that the rental income and any sales profit are untaxed.

Buying property as a business, makes your investment part of tax level “box 1”.  In that case you pay tax on the value increase of the property.

However, a real estate investment portfolio can also be a part of box 1. For example, this is the case if your activity grows to be a company. The tax authorities can state that the income (rent and sales revenue) is part of box 1. In that case it could be more advantageous to use a company as a vehicle to buy property, because of the lower taxation systems.

Due to the forthcoming amendment of the law of 2022, taxation increases both in case of buying trough a company as in private.  What will be most favourable, depends on your personal situation.

Prevention of money laundering.

In compliance with the Dutch Anti-Money Laundering and Anti-Terrorist Financing Act, lawyers, estate agents, banks and notaries dealing with a real estate transaction are obliged to investigate the origin of funds to be invested in the purchase of the property. Failure to do so when money laundering is involved exposes these professionals to very serious penalties, both criminal and economic.

Most law firms follow a protocol which involves at least signing a form and providing documentary evidence of the clients’ address, proof of funds in bank account, tax declarations, etc. Should the lawyer detect that there could be money laundering involved, he is obliged to stop advising the client and report the case to the Financial Intelligence Unit of the Netherlands (“FIU-Nederland”).

What are the purchase costs and taxes?

The fees regarding the purchase are normally charged to the buyer. They will usually include:

  1. Transfer tax currently set at 2 percent for private dwellings and 6 percent for all other real estate, such as business premises;
  2. If the property is newly constructed (or less than two years old) the transfer tax is replaced with the 21 percent VAT.
  3. Notary fees, around 1.0 – 1.5 percent;
  4. Registration fees, typically 1.0 – 1.5 percent;
  5. Estate agent’s fees 1 – 2 percent.

In addition, it is possible for a private buyer to take out a National Mortgage Guarantee to be covered in the event that the buyer is unable to make repayments, which will cost 0,9% of the mortgage value up to a value of EUR 290,000.

Tip: don’t forget to claim your tax back!

Homeowners in the Netherlands are able to claim a tax refund on mortgage interest payments – even as an expat –  provided the mortgage is a capital repayment mortgage and the property in question is your main residence. Valuation fees, mortgage broker’s fees and notary fees are usually also tax deductible.

What documentation must the buyer have in place before buying a property?

In order to purchase real estate it is necessary to have proper identification, such as a valid passport or ID-card. In case a mortgage is involved, the bank will ask for further documentation regarding your financial status. This may vary per bank. The notary will also require several ID-checks. When purchasing from abroad, it is necessary to have legalized authorization.

What precautions have to be taken regarding off-plan purchases?

Buying a property off-plan means buying it before it’s been built. The buyer signs a combined sales and building contract with the developer. It is convenient to verify the developer gives the buyer a bank guarantee assuring the refund of the money as purchase price. Such a guarantee can be executed in the event the building works don’t start or are not completed on the date promised by the developer. Also make sure payments to the developer are done via bank transfer to a special account opened by the developer for this purpose which is controlled by the bank.

Tips for clients looking to build their own property in the Netherlands

A party who is looking to build a house on their own property must always have the proper permit before starting the building works. He will first need to engage an architect who will draft a project to be submitted and approved by concerned authority, in many cases the municipality. Furthermore, it is convenient to find a reputable builder and formalize with him a proper contract in written form.

Once the house if finished, a deed must be signed by the owner in front of a public notary describing the house built and attaching the compulsory documentation.

Other costs ten taxes are transfer tax, notary fees and registration fees.

Annual running costs.

Regarding the annual costs to consider when buying property, the following taxes can be considered yearly:

  1. Immovable property tax: The level of taxation depends mostly on two factors. First of all it depends on the percentages of taxes you paid and secondly it depends on the value under the Valuation of Immovable Property Act (WOZ).
  2. municipal taxes: this refers to sewerage and waste collection levies as well as water rates. It is a flat rate irrespective of the room sizes.
  3. Income tax: The tax on the (notional) investment value of owner-occupied property is paid due the income tax. The level of taxation also depends of the value under the Valuation of Immovable Property Act (WOZ).

Other costs are community fees. If the house belongs to a community of owners, it shall contribute to the community budget approved at the AGM as per the share assigned to the property by the developer.

What minimum legal checks should be done when selling a property?

The vendor must assure he can deliver the property in the conditions agreed in the contract. The vendor is obliged to deliver the property free of all special charges and restrictions, with the exception of those that the buyer has accepted in the contract.

Furthermore the vendor is obliged to deliver the property with all accessories, to be described properly in the deed of purchase. Accessories include the known title certificates and documents.

It is therefore important to describe the property accurately as possible. In case of a hidden defect showing up after completion (regardless of the vendor being aware of it or not) the buyer can claim damages and, in case of serious defects, the termination of the contract.

The price must be paid in full at completion. This is usually done simultaneously with the signing of the purchase deed in front of the notary.

The vendor must also inform the community of owners of the new owner’s details, otherwise the vendor might be found liable for future community debts.

Selling costs and taxes.

All additional costs are usually paid by the buyer, see point 5.

If there is a mortgage on the property, it is important that the seller has the mortgage cancelled at the Land Registry. Only then the transfer can be completed.The costs for cancelling the mortgage depend on the rate of the notary. The notary charges a fee, the costs for the Land Registry, investigation costs and VAT. How much a notary charges for this varies from around € 90 to € 500.