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Should I buy a house in the Netherlands?

Whether you are a local Dutch or an expat, you might wonder if you should buy a house in the Netherlands at some point. The answer to that, of course, depends on individual situations and priorities. How do you know if you should rent or buy? As a group of real estate experts in the Netherlands, we listed some of the important things to consider.

What are your priorities?

Though it sounds vague and somewhat philosophical, it all comes down to what’s most important for you. Consider, for example, how important your mobility, flexibility, your plan and responsibilities are for you.

  • Mobility: Are you a global career whopper always looking for the next opportunity anywhere in the world? If so, owning a property may not be the best thing for you since you may want to move to another country easily on short notice. Or, are you a parent with teenage kids with close local friends? Then, the ability to move elsewhere quickly is unimportant since you intend to stay in the same place for a while.

 

  • Flexibility:  In all kinds of events and circumstances, owning places is often less flexible than renting. Let’s say you have a neighbour who, despite all the friendly reminders about the house rules and everything, is not considerate regarding noise, use of the communal area, or smoking, etc. How would that affect you? Would you be stressed, or would you be able to stay calm and look for solutions? The good thing about renting, in this scenario, is that it is easy to notify the landlord and find another place to live. On the other hand,  it will be time and resource-consuming if you own the home.

 

  • Mid/long-term plan: How long will you stay in the city? Though it may be hard to tell, especially right after moving, after some time, you might think, “Meh, Amsterdam isn’t for me,” or “Utrecht is great! I think I will stay here for some time”. That is one of the indications to decide if you want to rent or buy – if you don’t think you will stay longer than a few years, all the costs to purchase the property, buy furniture and move in and out of apartments may not be worthwhile. On the other hand, if you are likely to settle for a longer period, buying can be a good option, both financially and socially.

 

  • Responsibilities: Buying and owning a property comes with specific responsibilities. When buying a house, you have obligations to your seller, advisors, agents, bank and notary, as stated in the purchase contract. Once you own the property, paying a property tax, being on top of the VVE (owners’ association) meetings, fixes and upkeep of your property, etc., become your responsibilities. 

On top of these factors, financial considerations can also be a big part of decision-making. Is it worthwhile buying, or do your situation and priorities make it not worth it? 

Money matters

Whether you want to (or can) buy a place to live depends largely on financial matters. Here are some of the economic factors to consider. 

  • Long-term financial growth: Despite the risks, such as the real estate market slowdowns and interest rate hikes, owning real estate in the Netherlands is generally beneficial for long-term financial growth. In fact, in the last 30 years, the Netherlands’ residential property value has grown five-fold on average. However, just like any other investment, there’s always a certain level of risk. For instance, we saw the property value stagnate after the financial crisis in 2008.  The recent market slowdown in 2022 is also fresh in our memory. How you feel about these risks and the long-term returns should inform you whether you should rent or buy a home. 
  • Accumulated rent vs. mortgage payment: Most people spend some portion of their income on housing. This is true whether they pay rent or repay the mortgage to the bank. One way to look at this is to calculate what you would pay in the next 3, 5 or 10 years. Take Amsterdam, for example. According to the research in 2023 by HousingAnywhere, a 1-bedroom apartment in Amsterdam, on average, was rented for EUR 2,300 per month. Suppose you rent one of these apartments for 3, 5 or 10 years. In that case, you’ll have spent EUR 82,800, 138,000 or 276,000, respectively, at the end of each period. (Here, we ignore the rent increases corresponding to the inflation to simplify the calculation). Would you find it absurd to have spent so much money over the years and have no assets to show, or would you not mind too much since other factors like flexibility are essential for you?
  • Tax benefits: In the Netherlands, there are some tax benefits if you buy and own a home. For instance, when you buy a house, the cost of home purchase, such as fees you pay to the notary, mortgage advisor, real estate agent, etc., can be tax deductible when you file the tax return for that year. Additionally, if you use a mortgage to buy a house, the interest you pay is also tax deductible. These tax benefits can add up to thousands of euros since the purchase cost and interest payments are often not insignificant. 

So, should you rent or buy?

We explored some factors that may help you decide whether or not to buy a house in the Netherlands. The decision really depends on what’s critical for you and how (and where) you see yourself in the future. While renting gives you more flexibility, mobility and fewer responsibilities, buying a place to live could give you financial advantages. 

 

Are you thinking about buying a home? With years of experience and a track record of great property investments in many cities such as Amsterdam, Amstelveen and Diemen, we are uniquely skilled to help you find and buy a house and apartments in the Netherlands. Contact us for a free initial consultation to learn what LJ Real Estate can offer.