Two types of costs
There are two types of cost involved in buying and owning a home: Purchase costs: one-off costs you pay when you buy your home. Regular expenses and maintenance costs: payments you will make every month (or at some other interval) after you’ve bought your home.
Purchase costs include:
- Purchase-related costs
- Professional fees and charges
- The price you pay for the home itself
- You will be able to deduct some of these costs from your income for tax purposes.
If you want to renovate your new home immediately, these costs will of course have to be added. If you want to borrow more money for this purpose, you should discuss it with our advisor.
Regular expenses and maintenance costs
Once you have bought your home, you will have to pay your mortgage every month. You’ll also need insurance against damage by fire or storm, for example. And you will have to pay property tax to the local authority every year. Then there are monthly bills for gas, water and electricity. Naturally, you want to live comfortably once you’ve moved in. And you want your home to retain its value. That will mean doing regular maintenance. How much you need to allow for maintenance depends on the age of the property and its current state of repair and maintenance. If you are buying a flat or apartment, you may be required to pay a monthly amount towards a collective maintenance scheme.
|Property transfer fax
||Advice fee Arrangement fee
||Renovation and maintenance
|Civil-law notary’s fee for property transfer deed
||Civil-law notary’s fee for mortgage deed
||Moving and decorating
|Bank guarantee commission
|Estate agent’s fee (1 to 1,5 %)
||NHG application fee (where applicable)
||Property tax and local authority rates
|Structural survey fee
||Structural survey fee (where applicable)
||Utility and service connection charges
How much you will have to pay
Your monthly mortgage payment depends on:
- How much you borrow
- The repayment method you opt for
- The fixed rate period you choose
- Your insurance.
How much you can borrow depends on your circumstances. Our advisor can give you a figure, which will take into account your income, the value of the home you want to buy, any additional expenses involved and your future outlook. Your chosen method of repaying the loan, also come into play. Fees are payable for mortgage advice and for administration.
National Mortgage Guarantee Scheme
The National Mortgage Guarantee Scheme (NHG) offers secure and affordable home loans. You pay less interest with an NHG mortgage than with other mortgages. The scheme also provides protection under certain circumstances. For example, if – through no fault of your own – you are unable to repay your mortgage and your home is sold for less than what you owe, you will not have to pay back the difference. However, if your mortgage was taken out after 1 January 2013, you may not qualify for tax relief on the interest: only annuity mortgages and linear mortgages qualify. When you take out an NHG mortgage, you pay a fee to buy into the scheme. Admission to the scheme is also subject to certain conditions. There is a limit to how much you can borrow, check www.nhg.nl
Your home and the tax rules
As a homeowner you enjoy a tax advantage. If you use the mortgage loan to purchase, improve or maintain your home, you can deduct certain expenses from your income for tax purposes. The following expenses are deductible: valuation fee, costs for the National Mortgage Guarantee (NHG) and the arrangement fee.
Tax relief for up to 30 years
Mortgage interest is deductible from your income tax for up to thirty years. After that time you can no longer deduct interest, so you will pay more tax.
Keeping your monthly payments as low as possible
You can sort out the tax relief in advance, which means the rebate will be spread over the months of the current tax year. If you opt for this arrangement, you need to apply for a payroll tax reduction notification from the Tax and Customs Administration.
Your home is also a capital asset
That is why you pay tax for owning a home. To determine the value of the property according to the Tax and Customs Administration, the municipality assesses its value under the Valuation of Immovable Property Act (Wet waardering onroerende zaken / WOZ). You must add a percentage of this WOZ value, called the ‘notional rental value for owner-occupiers’, to your income.
On www.belastingdienst.nl you can find further details about the taxes associated with owning a home.