If you are staying in the Netherlands for an extended period of at least 5 years you may want to consider buying your own property.
Monthly payments can be lower than renting, especially if you take into account mortgage tax relief. There are generally no limitations to foreigners owning property in the country.
In this article we look at the 3 things expats need to consider when purchasing property in the Amsterdam area. These are (1) the location of the property, (2) the price/budget/property type and (3) the process of buying.
An initial question to ask is which district or neighbourhood in Amsterdam would you prefer to live in? Would you be happy living in the city centre? Or in one of the outer suburbs? How would you feel about living in a multicultural community or in a town outside of Amsterdam? Let's look at some options:
City Centre - the heart of the action and busy with tourists/visitors although you can find many quiet back streets. Premium properties such as 17th century canal houses are very expensive and many are used as commercial offices rather than residential buildings. The Jordaan district (just west of the centre) is a popular choice for appartments with picturesque canals, independent shops and a communal atmosphere.
Inner Neighbourhoods - Prime areas to live in are Oud West and Oud Zuid (including the chic Museum Quarter), the multicultural, working class De Pijp and the classy Rivierenbuurt in the south. The new developments on the IJ waterfront from the Westerpark area to the eastern islands should also be seriously considered.
Amsterdam Oost (east) and the adjacent Indischebuurt have some renovation and developments going on - though they are poorer areas with predominantly social housing.
Outer Suburbs - Cheaper places for appartments further out include Osdorp and Slotervaart which are accessible to the centre by public transport. Some expats may want to avoid Amsterdam Zuidoost (south-east) which has had its share of social problems - however appartment prices are a lot cheaper than central Amsterdam. Amsterdam Noord (north of the IJ) can feel a little detached from the city and is more Dutch-centric than international.
Other Towns/Cities - For larger families looking for a house then consider Amstelveen. This is quite a popular location for expats given its proximity to Amsterdam Zuidas business district and Schiphol airport. Note, some areas of Amstelveen are under the flight path of aircraft during the day, but the airport is closed at night.
Amstelveen has a wide range of property available from appartments to detached houses. Public transport connections (tram, metro, bus) are convenient and there are also plenty of free parking spaces for residents - unlike Amsterdam centre where you need to pay the council for an expensive parking permit.
Other options for expats are Haarlem, Zaandam or Hilversum. Haarlem is only a 15 minute train ride from Amsterdam central. With a wide range of affordable property, a lively and historic centre and a short hop to Zandvoort beach, it is a serious alternative.
We would also recommend taking a look at the Leidsche Rijn area in Utrecht, 30 minutes south of Amsterdam. This is an ongoing new development which will eventually have 30,000 properties housing some 80,000 people - it's currently about half complete. This area is great for families with parks, modern facilities and reasonable house prices.
Price / Property Type
Since the financial crisis hit, property prices in the Netherlands have decreased by around 25% from the peak. The housing market has been stagnant although there are signs of a slight pick-up. Some homeowners remain trapped in negative equity, meaning their mortgage is greater than the value of their house.
So as a potential buyer, what can you expect? Obviously price depends on the size of the property and the location - you may need to compromise in order to get the right balance.
At the bottom end of the market a small appartment in the outer suburbs will start from about €100,000. A 30m2 studio in Amsterdam will be priced at around €125,000 - you could probably get a larger 3 room appartment for the same price further out.
A 2 room appartment (say 60m2) in a decent location in Amsterdam can go for €200,000-€250,000, whilst 3 room appartments (up to 120m2) could set you back anything between €300,000 and €450,000 depending on location.
A large house in the centre of Amsterdam will go for €1 million with prime canal-belt addresses fetching up to €5 million.
In Amstelveen you can find smaller houses on sale for under €300,000, with the bigger houses around the €500,000 mark. Prices in Haarlem are a bit lower than Amstelveen.
A 3 bedroom house in Utrecht Leidsche Rijn starts from about €220,000.
Buying Process in the Netherlands
Have a good look around the area you are interested in living. Think about transport links, parking, shopping/entertainment facilities, schools and healthcare.
If you need a mortgage then go to a major Dutch bank (for example ABN Amro or ING) or visit a mortgage specialist (Hypotheek Shop) to see how much you can borrow. You will need to be in full-time in employment and have a valid residence permit.
A typical Dutch mortgage runs for a 30 year period and you can borrow up to 5 times salary. You would normally put down at least a 10% deposit. As always with complex financial products you should do your homework or seek expert advice.
Interest payments on mortgages are tax deductible as long as the property is your main residence. Note that the future of mortgage tax relief in the long term is being questioned.
Once you have a budget then start your property search - funda.nl (in Dutch and English) is the largest property search website in the country. Alternatively go to see an estate agent (makelaar) - they will either charge a fixed fee or 1-2% of the sale price, depending on how much work they do on your behalf. Note that 'for sale' is te koop in Dutch.
View a number of properties to get a feel for value in the area. Be aware if a property is either freehold (vrij leen) or more commonly in Amsterdam, leasehold (erfpacht) where annual ground rent is payable to the council, typically €1,000. Check the date of lease expiry - this is when ground rents are recalculated.
For appartments also consider any fees to housing associations for the general maintenance of the building.
When you find a flat / house you like make a suitable offer and negotiate from there. An experienced agent can prove useful during this process. Alternatively the seller may ask for sealed bids (inschrijfaanbod).
If the seller accepts your offer a temporary contract is signed - either party can cancel this within 3 days. The 10% deposit must be paid via a bank within 3 weeks. You will lose this if you pull your offer after the 3 day "cooling off" period, such as not being able to raise the full finance.
You should then get a detailed inspection of the property done by an independent surveyor. If all is well then the final purchase transfer contract (akte van levering) can be signed on exchange day at a notary office. The Dutch Land Registry (Kadaster) will be notified of your purchase. Expect to get the keys and be able to move in within about 8 to 12 weeks.
In total allow for 6-10% of the property value to be swallowed up in agent fees, notary fees, surveyors and taxes.
You should insure your property against fire, flood and damage and get contents insurance for any valuable items.
Note that as a property owner you will be liable to pay annual property taxes (OZB Onroerende ZaakBelastingen) to the local municipality. This is based on the deemed value of the 'immovable property' (known as WOZ Wet waardering Onroerende Zaken).
There are no capital gains taxes in the Netherlands.
If you need to furnish the property then there is an IKEA in south-east Amsterdam (metro station Bullewijk or come by car via the A9). Also in the area (next to the Amsterdam ArenA, station: Bijlmer ArenA) is the Woonmall Villa Arena, a shopping centre dedicated to house and homeware - from furniture to flooring, bathrooms to kitchens, anything you might need will be here.
If you are on a shorter-term stay check out renting a flat in Amsterdam