For anyone that has been living in the Netherlands, for even a moment, the word Funda has become rather commonplace. Which makes sense, it is an amazing tool to begin your search for your new home. It gets better, Funda can also provide insights into how your future home can impact your financial capacity.

You can read here to find out the must knows when looking at Funda, and become a financial Funda guru.

1. The House / Your Goal

There are some important physical features of the home that we look at (not only because we are curious to see what you are purchasing 😉). Is it ready to live in? Or does it need some extra nurturing and attention? In other words, what is the plan and what is important to achieve this. For example, if the home is a bit of a fixer-upper the banks will require some essentials, such as a kitchen and a bathroom. It is also nice to know that banks can facilitate renovations, keep in mind that usually it’s not the full amount.

2. Energy Label

In essence, the energy label strongly influences your borrowing capacity. As you may know, sustainability is playing a larger role every year, including the housing market. To encourage people to invest in sustainability most lenders are allowed to enlarge your mortgage capacity and give you a favourable interest rate. We have written more about sustainability here.  

3. Amsterdam Homes

For Amsterdam homes specifically, there are three scenarios you can face regarding the ownership of the land. The first, the home is on its own ground, great news. The second, the home is on leased land which has been paid off until a distant date in the future, also good news (however, make sure you check the specific conditions). The third, the home is on leased land where you are required to pay a sum to use the land on a monthly or annual basis, less good news. It is important to know that the ground lease repayments will harm your maximum borrowing capacity.

4. Market Value (Marktwaarde)

Although it can’t be found on funda.nl, we wanted to mention the importance of the market value to you. On Funda, you will see the asking price, which does not translate to the value of the property, this needs to be done by an independent valuator. Important, because that opinion affects your borrowing capacity. Your best friend to know about the value of the home, before doing the independent valuation, is your real estate agent. Real estate agents’ speciality involves knowing what a reasonable bid is (which can be higher than the asking price), and what a reasonable market value will be.

5. Homeowners Association ( VvE – Vereniging van Eigenaren)

This one is only applicable to apartments. When purchasing an apartment you automatically join the VvE  (or homeowners association), to handle the maintenance of the building. It is important to check, not only for you but also for the lender, that the VvE runs professionally. They need to be registered at the KvK, have a yearly meeting, save money in a reserve fund, provide building insurance, and have a maintenance plan. This is all visible on Funda, under the VvE list.

6. Home Maintanence / Picture Perfect

Those gorgeous home photos you see online, are not always representative of the home (remember, it is someone’s specialty to make it as glamorous as possible). Therefore, we recommend a building inspection, with this inspection you can avoid nasty surprises by having a complete assessment of the condition of your home. Something good to keep in the back of your mind, since it is not mandatory to have.

This brings us to the end of the list. While you dream about the perfect kitchen and envision your  ideal bathroom, it’s essential to consider the financial ‘funda’mentals. Have you started your househunt, or perhaps already found a home and have some questions, then please feel free to reach out to us.

We look forward to meeting you!

Optimism is not often the initial feeling that comes when you hear the words ‘’Tax Return’, usually you may think of stress or anxiety. Lucky for you, one (of many) advantages of living in the Netherlands is its favourable tax framework, which can turn your frown upside down. And by favourable tax framework, we don’t just mean the 30% tax ruling, there is more than that available for you. Curious, well read on, we promise this article won’t be taxing 😉

The Dutch Tax Authorities support home ownership. So they created several benefits when you take out a residential mortgage.

1. Tax deductible costs related to getting a mortgage

First up: you can subtract the mortgage costs from your taxable income. Great news, because this lowers your tax amount.

These costs are:

• Fee for the valuation of your current home and your new home.
• Fee for the mortgage advice from the broker.
• (Part) of the fee from the notary.
• Cadastral costs regarding the mortgage deed.
• Costs for a mortgage including NHG (if applicable).

2. Interest deduction (read: pay less income tax)

Secondly: after taking out a mortgage on your residential home, you’ll of course pay a monthly fee. When you have a mortgage on a linear or annuity basis, this interest will be partially tax deductible. So this means that owning a residential home charged with a mortgage will make you pay less income tax. (See also: Provisional Tax Refund).

3. No property tax on the profit on the sale of your current home

Compared to other countries, the Netherlands don’t charge any property tax when you make a profit from the sale of your home. On the other hand, a profit on the sale of your former home can limit your mortgage interest deduction on the new home (the ‘bijleenregeling’). But overall, this is less drastic than paying a big amount of property tax.

This refund is often considered to be a perfect way to lower your monthly cash flow. By paying mortgage interest (and /or paying costs related to taking on a mortgage), you are eligible for a tax refund. You can claim this through your annual income tax return, or, you have the option to claim this refund monthly instead of per year. We call this the ‘voorlopige teruggave’ (provisional tax refund), coincidentally this is also something we can help you with 😊; Click here for more info.

With the provisional tax refund you calculate the expected outcome of the annual tax return in the coming year. This estimated yearly refund can be paid per month upfront. When the year is finished (and your annual income tax return is done) the results of your final income tax return and the provisional income tax return of the same year will be settled.

Are you under 35? Then you don’t have to pay transfer tax (which is 2% over the purchase price) if you buy a residential home below € 510,000. Of course, you can use this only one time. But this is great news, because you can save a lot of money (maximum benefit € 10,200).

Do you have questions about mortgages and taxes in the Netherlands? What the best mortgage structure is for you? Or how to claim the tax advantages? Feel free to contact us. We are here to help.

There is a somewhat humorous, and cynical, Dutch saying about two unavoidable facts in life:

• The first: there is a time in everyone’s life that they will pass away;
• The second: until that time comes, you will have to do your annual tax.

At Klår we wish everyone good health and a long life 😊, other than that there is not much we can do to help with the first fact. However, when it comes to tax, we would love to guide you in gaining clarity.

We understand that the Dutch tax system can be complex. There are constant changes to the regulations from the government which leads to overkill of information to process. To provide you with peace of mind we created Klår Tax Services in 2023.

1. Annual Tax Return 2023

As is common practice in most countries, the residents in the Netherlands are also subject to some form of taxation. This includes, and is not limited, to income, wealth, and property ownership.

But there is some good news! As an expat, there are possibilities for tax benefits and allowances. These possibilities are dependent on individualistic circumstances such as what residency status you have, your total income, and the nature of your work. It is important to know what benefits are eligible for you, and that you finalize the application correctly and stick to the timelines.

Speaking of timelines, the final deadline to complete your annual tax return is officially the 1st of May. However, as always the quicker the better, as the earlier you submit your application the sooner you receive your feedback from the tax authority.

Not to worry if you do not make the 1st of May deadline it is not the end of the world, when you lodge your tax return with us we are able to extend the deadline 😊. For any questions you can always have a look at our website or reach out to us (info@klarfinance.nl).

2. Provisional Tax Refund 2024

In the Netherlands there is the option to claim you tax refund per month instead of per year. In Dutch we call this the ‘voorlopige teruggave’, and it’s a great way to optimize you monthly cashflow.

How it works, with the provisional tax refund a calculation of the expected outcome of the tax return is made based on the coming year (2024), and from this calculation, the yearly refund can be paid per month upfront. Then, when the year is finished, the results of your definitive tax return and the provisional tax assessment will be settled.

1. 2% Transfer Tax Exemption

If you meet a few simple requirements you may be exempt from paying the 2% transfer tax when you buy a home. This is very positive news as it can save you a pretty penny. The criteria are:

• Under the age of 35
• Purchasing a residential home below € 510,000 kk
• Haven’t made use of this incentive before

2. No Capital Gains Tax If You Have Made A Profit On Your Home

Although other countries might, the Netherlands doesn’t charge any property tax when you make a profit from the sale of your home.

Need guidance on the annual tax return or the provisional refund?

• For the annual tax return, we need an annual income statement and mortgage statement etc.) from 2023
• For the provisional refund, we need income and mortgage information from 2024;

If you are interested feel free to contact us and we can provide you with an overview of what we need, and based on this we can guide you through a relaxed process.

Feel free to check our fees by clicking here.

For any enquiries, you can also reach out to us and we are more than happy to assist.

So, you’ve fallen in love with the Netherlands, and now you’re eyeing a little piece of it to call your own. But hold on tight, because as we step into 2024, the Dutch mortgage game is changing faster than you can say “stroopwafel.”

Navigating the complexities of real estate and mortgages can be challenging, but fear not – we’ve got your back. Whether you’re a first-time buyer or a seasoned investor, our team is here to guide you through the process, ensuring a smooth and informed journey towards making your Dutch dream home a reality.

2023 has been less turbulent than the preceding years. Interest rates have been quite consistent, and there have been no spikes in energy prices. But, that isn’t to say that there are some changes happening in the coming year that could benefit you.

If we take the perspective of the government, there are two important factors about their incoming regulations:

• Making houses more affordable, especially for starters
• A large focus on sustainability also reflected in the bank guidelines

1. The Transfer Tax discount will increase

People under the age of 35 do not have to pay transfer tax if they purchase a house below € 510,000. This only counts if you haven’t made use of this advantage in the past. This is positive news because in 2023 the purchase price was limited to houses below the value of € 440,000.

2. The National Mortgage Guarantee limit will increase

If you buy a house with a purchase price or value below € 435,000 you can claim a mortgage with the NHG (in 2023 the limit was € 405,000). This is positive news because the NHG gives you the option to claim better mortgage conditions.

3. Single home purchasers are able to borrow more

Individuals wishing to purchase a home on their own are able to borrow € 16,000 more in 2024 (based on an income of at least € 28,000). This is a new initiative with the reasoning that single person households have lower costs than other households.

4. The one-time gift limit will be abolished

In 2023 parents were allowed to gift their children € 27,231 (tax free) for the purchase of a property. In 2024 the government has removed this initiative. It is possible to make use of the one-time € 31,813 tax-free gift option (for the incentive, the funds have to come from your parents, and have to be under 39 years of age)

Sustainability has become a larger focus than ever, and this is also seen in how the government handles mortgages on new, and existing homes. Two important details to know going forward are:

1. Buying a new home: Depending on the energy label of the home you wish to purchase, there is potential to borrow an additional € 5,000 (label C, or D), to a maximum of € 50,000 (label A++++ with a 10-year energy performance guarantee), on top of your maximum borrowing capacity.
2. Renovating your existing home: Depending on your current energy level, you may be able to borrow up to €20,000 more if you are renovating your home with sustainable initiatives.

Having a favourable energy will not only save you energy costs, but additionally, lenders also provide a favourable interest rate to houses with higher energy labels, lowering your monthly costs.

Ready to make a plan? Give us a call! Let’s plot the course together – we’ve got the roadmap to make your plan a reality.

Are you an expat considering your own home sweet Holland? Scratching your head on how to begin and own the process? We get it. That’s why, we are here to provide you with invaluable insights to make your journey to get a mortgage as smooth as butter.

Providing You Comfort

When it comes to a residential mortgage the government’s role is to protect you from financial risk. They take this job seriously – as they should because your mortgage will probably be the biggest debt you will ever have. The highlights:

• Every financial institution you are dealing with is under strict supervision from the government
• As a consumer, you are mandatory to have mortgage advice from an expert upfront. With this, they guarantee that you will have a mortgage structure fitted for you
• Regulation shows strict guidelines for every mortgage provider and advisor to determine your borrowing capacity

Time For Action – Mortgage Advice

Knowing that the mortgage process is well organised you can take the first step and delve into the relevant information. For official mortgage advice you can go to a bank directly (some banks – not all – offer this service) or you can go to an independent mortgage advisor (like Klår) who has access to all parties available.

You can view the main difference as follows: banks will be able to inform you about their specific products (good – but limited), whereas an independent mortgage advisor can guide you in the marketplace and link you to the best suitable mortgage for you. At Klår we take this service to another level… we even try to make the whole journey a little bit fun!

Let the Math Do The Talking – Guidelines

When it comes to financial risk the government have a set of rules that determine your financial budget:

1. Loan to income: your maximum borrowing capacity is based on your gross yearly income. The rule of thumb is that your annual mortgage costs cannot exceed a specific percentage of your annual gross income (approx. 25% – 30%). Entrepreneurial incomes are also possible (requires a little extra work on our end 😉)
2. Loan to value: the mortgage cannot exceed the worth of the property (unless you are interested in energy related investments)

A Buffet Of Choices

Determining your mortgage capacity is one thing, getting the best fit for you is another. There is a lot to think about, like:

• Which fixed interest period do you prefer?
• Do you need flexibility with your repayments?
• Do you need the 30% ruling taken into consideration?
• Are you buying a new build or a fixer-upper?
• And lots more!

Although a mortgage seems to be a quite ‘standard’ service… there are many small differences within the conditions that different providers offer which can make a huge impact.

The Key To Success

Having a smooth process with a positive result is a lot like having a clear roadmap. With this, you can easily reach your destination without getting lost or encountering barriers that lead to delay, or even worse. To get this clear roadmap a strong inventorization is what you need (your checklist will include: your passport, residency permit, payslip, employer statement, at much more). All information needs to be in order and presented in a way banks can process it efficiently and with comfort.

The Final Piece Of The Puzzle

In The Netherlands, the mortgage application begins after you have closed a purchase deal for a home. On average you have 4 to 6 weeks to arrange your mortgage. Thus, it is crucial to be confident in your budget and have your documentation complete up front and before purchasing. If you are looking for this assurance we are more than happy to be your partner.

First, we start with a personal meeting where we will tell you everything about the Dutch mortgage system. Based on your personal situation we will draft a report including a detailed assessment (exactly like a bank will do) about your borrowing capacity, insights into financial structures and different monthly repayment scenarios. All are personalized to make sure you know exactly what your options are, where you might be stretching your financial capacity and how possible hiccups in a process can be avoided. With this, your chances of success for a new home will increase substantially.

*Probably not your biggest concern, but it is nice for you to know that the “get ready to start” fee is also deducted from your total fee at the end of the process.

Have we piqued your curiosity? Just give us a call!
We will help you gain clarity and get focus.

Returning from a vacation often sparks fresh perspectives and new ambitions. Are you enjoying the Netherlands? Are you here to stay, and dreaming about your own home? This article is a good starting point. We’ll delve into the unique considerations that you should keep in mind when thinking about buying a house. And to continue the holiday theme, we have drawn up some comparisons (your holiday, your home!).

1. Reflecting on your Financial Landscape as an Expat:

After the tranquillity of your holiday, it’s important to reflect on your financial situation. We recommend thoroughly reviewing your financial health or even more specifically how the bank will assess your financial health. As an expat, is it possible to get a mortgage in the Netherlands, however, the options and the process of getting one can be different. Therefore it is crucial to determine your mortgage options and capacity upfront. It is like being at Schiphol Airport; make sure you have upfront all the documents to avoid any hiccups at the gate.

2. Assessing Affordability:

Buying a home is a significant financial commitment. After your holiday, evaluate whether your vacation experiences have shifted your spending priorities. Perhaps you’ve developed a stronger sense of financial discipline that can contribute to a larger down payment or more affordable monthly mortgage payments? Good for you to know is the more savings you can contribute, the better your mortgage conditions will be.

3. Budgeting Beyond the Purchase Price:

While the purchase price of a home is a major consideration, remember that homeownership comes with ongoing costs. Account for property taxes, homeowner’s insurance, maintenance, and potential renovations when crafting your budget. On the other hand, your alternative falls to renting which also has some downsides. If you are interested in what costs are involved in owning a home, and you would like to chat over the pros and cons, we’re here!

4. Consultation with a Mortgage Advisor: Or even better… with Klår 😊

As mortgage advisors, we encourage you to engage in a consultation before diving into the home buying process. We can discuss your financial situation, provide insights into current mortgage rates and important mortgage conditions, and help you understand the mortgage options available to you.

5. Orientation Process:

The orientation process is a crucial step to make sure that you can comfortably bid on a house because you know your budget. At Klår we will prepare a report that you can use as a guide to begin bidding on your (hopefully) new home, literally called the Klår (ready) to start report! It involves a comprehensive review of your financial documents.

6. Evaluating Mortgage Options:

Just as you carefully selected your holiday destination, explore various mortgage options. In general, a mortgage is a quite standard ‘product’, however, there are many (small) differences in conditions between mortgage providers. And those differences can have a large impact on what fits your needs the best. Think about interest payments over time, different durations for an offer and flexibility with early repayments. It is like booking an apartment; is breakfast and dining included? Or is it more basic and do you need to bring your bedding & towels?

7. Embracing Flexibility:

Similar to adapting to unforeseen travel situations, remain flexible throughout the home buying process. Market conditions can change, and being open to adjustments in your plans can lead to a successful outcome. When it comes to flexibility, we think ahead for you, not only now but also for the future!

8. Working with Real Estate Professionals:

Just as you relied on local guides during your vacation, partnering with real estate professionals can be valuable. Especially in the current housing market. Real estate agents can guide you to the right properties and assist in negotiations. Handy, especially because a lot of documentation and communication will be in Dutch.

By combining your vacation-fuelled enthusiasm with practical financial strategies, you can set yourself up for a successful and rewarding journey towards owning your dream home. Remember, just as a memorable holiday requires careful planning, the path to homeownership benefits from thoughtful preparation and expert guidance. It is our goal to provide clarity and focus throughout your entire journey. If you are interested in how we work, you can always feel free to give us a call.

Edward was inspired by New Zealand’s backyard life. “The New Zealand way of outdoor barbequing, being outside, with your kids playing sport. The idea of having cricket on your porch, while your kids are playing cricket” (Edward).

Expanding on this sense of community & kinship, this laid way for the foundation of the Work Islands. Evolving the idea past outdoor kitchens and into garden offices, Edward said that “You don’t buy a kitchen table to put an office chair there. Building extensions don’t fix the problem, you still have the same room. With a Work Island, you feel like you are leaving your home.”

Edward and Co. visit their clients after installation, and here is what he says about the room: “During the day, until 1500 it is my office, however, I notice there are some lego blocks, then there is a tv hung with a PlayStation. When I ask my clients how is it used, they say it is the most popular room in the house. Everyone wants to be here, during the day it is my office, from 3-6 the kids play here, and then we might have a glass of wine here at the end of the day. Have friends over to watch football, and the weekend it becomes an extra room for the family.” In short, a real, multifunctional room.

Edward: “Private & Business. People who have a practice, such as physiotherapists, psychiatrists, or accountants. Also, a lot of people do it for themselves privately, as an investment for their property. The private sector is saying yes I want office space, but I also want a room to put my teenage kids because I want to watch Netflix on my own. Also, think of young families with a kid on the way. What we can provide, is you get that extra room, and expand your house, so you don’t have to move. If you ask us who our typical customer is – someone with a garden” (Edward).

In addition to the opportunity cost savings (think moving, closing costs, office rental savings), there are also sustainability benefits. Firstly, the working island will be the best insulated room in the house, which also means the cheapest to heat. Secondly, there are also green energy options being offered, such as solar panels. “Thanks to modern technology, solar panels have become less of an eyesore, lying flat on your ceiling as opposed to standing tall, blocking the view and the sun.” (Edward)

Edward: “When someone orders, the first process is standing in their garden, giving them a run down and possibilities. After the building plans are drawn (approximately a week), we order the windows (approximately 8 weeks). Then we construct the whole unit (A week and a half). After completion, the unit rolls out the door and is delivered to your home. Then it is plug and play, everything will be useable the same day as the delivery.”

There are four Work Islands to choose from Kapiti Standard, Kapiti Compact, Waiheke, and Matakana, ranging in different sizes, and features. For more detailed information click here.

Planning on investing in your own Work Island, this is where we come in. There are several financing options available, based on factors that include but are not limited to: the amount you wish to borrow, the sustainability impact, and for example your current mortgage agreement. We can help you plan out what options you have available in a relaxed, and hassle free way.

Can you picture a working island addition to your home? Did we spark some new questions? Reach out to us! We would love to hear from you and we love sharing our insights.

This is probably the most asked question we could possibly think of, and a very valid question too. In most cases the answer is yes, however, there are some things you should be thinking about. So, what is the best way to tackle this question? It would be to start by asking more questions. As we are told, humans are storytelling beings, therefore, each answer to the main question will differ. So let’s begin!

1. What are your plans?
Start by thinking about your future. Buying a house and taking out a mortgage is a commitment, therefore we always say take your time. On the other hand, have you been living here for a while and know that this is it, but you have that voice in the back of your head that maybe you want to go back to your home country, or move somewhere else (although unlikely, we think 😉)? Well, we know that these are all worries that you might come across, and we are happy to tell you that there are solutions for your home if you wish to move back abroad. What we say, as a rule of thumb, is if you live in a home for over three years, you have already set yourself up in a good position.

2. Is the house for you, or is it an investment?
An important factor to know. Why? The housing market for residential property is different compared to buy-to-let mortgages, mostly because of the possible impact of government regulations. Lenders have to abide by these regulations which further impacts their options when providing you with a residential mortgage, or a buy-to-let mortgage.

Long story short, we do believe this is a great time to buy for a residential property (please see more below). On the other hand, we are more reluctant when it comes to buying a property for investment purposes.

Upsides to buying

Interest rates have risen over the past year, and a consequence of that is that the market has cooled down, a lot. Since there is still uncertainty about the housing market, there is good ‘momentum’ to get a good deal. This momentum will likely carry on until the market gets used to the fact that interest rates of this level are likely here to stay, and then demand for property will rise again.

Downsides to buying

As you probably know, interest rates have a positive correlation with monthly repayments. Therefore, higher interest rates, higher repayments. Another point to keep in mind, with a higher interest rate, banks will allow you to borrow less money (continue reading to know more!).

Here is some insider knowledge when it comes to mortgage calculation. As you know, your maximum borrowing capacity is based on your total gross annual income. But, what you might not know, is that the government has a substantial influence in determining your borrowing capacity. Long story short, every year the government decides how much of your income as a percentage can be spent on your mortgage. And taking inflation into account, we wouldn’t be surprised if that percentage drops when other expenses will increase. What does this mean for you, in the coming years there is a possibility that there is a reduction in your borrowing capacity.

Supply and demand. It is well known that there is a housing shortage in the Netherlands, with the larger cities being impacted the most. This is also one of the driving forces of rising house prices. The king announced that there will be 900,000 new homes being built between his announcement date (‘Prinsjesdag’ 2022), and 2030. This is a great initiative to combat the lack of supply plaquing the Netherlands, hopefully providing a more level playing field for first time home buyers. However, what we see in the market is that it will be a great challenge (and we think it will be unlikely) to achieve this goal.

Inflation. You’ve probably noticed the increase in costs when it comes to your grocery bills, gas & electricity, hopefully your payslip, and most considerably, your rent. This last one is especially interesting. Rent is adjusted yearly depending on inflation. If you own your property, this will not be the case. With a mortgage you can fix your interest for an extended period, giving you more certainty.

Are you still doubting whether to jump into buying your home? Or did we incite more questions? Then Call us! We love to talk, and we are ready and willing to spar with any ideas you may have.