Buy to let mortgage in the Netherlands

‍The differences between your own home and a buy-to-let mortgage in the Netherlands

A residential property is based on a mortgage for individuals who are planning to live in the property and don’t have any intentions to rent it out to others. With a residential property you are able to finance up to 100% of the market value.

A buy-to-let mortgage is mainly for individuals that are planning to buy a property for investment purposes. By buying a property for rental purposes, you are be able to generate passive income for yourself and the family. In the Netherlands you are able to finance such a property up to 70%, 80% and even 90% of the market value in a rented state.

Requirements of a buy-to-let mortgage in 2023

In general, and as rule of thumb, the contribution for a buy-to-let mortgage is approximately 30% from your own savings. In addition, you have to pay 10,4% transfer tax in 2023 for a property that you’re buying for investment purposes. You can imagine that the costs will be significant compared to a property that you’re buying to live in. Lastly, you have to be registered in the Netherlands and live and work. Contact us to receive more information about the possibilities.

An example of buy-to-let costs calculation

The numbers below are indications and no rights can be derived from this.

1. Purchase price: € 300.000

2. Transfer tax (10,4% in 2023): € 31.200

3. Appraisal report fee: € 950

4. Real estate agent fee: € 3.000

5. Financing costs via us: € 3.295

6. Notary fees: € 1.600

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Total costs: € 40.045

Market value in a rented state: €210.000 (30% less)

(Always much lower than regular market value)

90% financing option: € 210.000 x 90% = € 189.000 mortgage amount

€ 189.000 - € 300.000 (purchase price) = € 111.000

Total savings needed: € 111.000 + € 40.045 = € 151.045

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How does it work and what are the conditions

The buy-to-let mortgage is mainly suitable for long-term rent and not allowed for short-term rentals such as holiday homes or Airbnb. You are also not able to live in the rental property yourself, as this has tax implications and it won’t make really sense as the benefits are not included.

In order to apply for a buy-to-let mortgage, we need documents and review the possibilities. Our mortgage advisors are certified to inform you about the process and the options. Please contact us to discuss the options. 

Different lenders on the Dutch market

In the Netherlands different lenders have different requirements for investment mortgages. The buy-to-let mortgage market is, however, pretty small in the Netherlands. We have multiple banks/ lenders such as:

1. Dynamic Credit

2. ABN AMRO Bank NV

3. NIBC

4. Domivest

5. RNHB

6. Woonfonds

7. Nationale-Nederlanden

8. Rabobank

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Box 1 and box 3

Home owners with a mortgage are taxed in box 1, meaning that you are living in the property yourself. Property investment mortgages are taxed in box 3, no interest deductibility is allowed for box 3 financing. 

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Refinance your own property to a buy-to-let mortgage in the Netherlands

For many expats that have bought a property, this is could be a great chance to keep their property. If, for example, they have lived for 3 years in the Netherlands and they are planning to leave and rent their property in theNetherlands. You have to keep in mind that some banks/ lenders do not offer investment products or are not able to transfer your regular mortgage into a buy-to-let mortgage. Please make sure to ask for the condition with your current lender/ bank and contact us to discuss further options.