Which costs are deductible if I buy a house in the Netherlands?

Article Number: 25 | Rating: 5/5 from 1 votes | Last Updated: Fri, Jan 13, 2012 at 6:50 PM

If you own a property in the Netherlands and you use it as your main residence then you may be able to claim some tax deductions. These deductions can be claimed in your tax return. Deductible are costs related to the mortgage.

You can also claim a provisional monthly refund. This has to be done every year again. See also our website if you need help filing the right request.

The costs can be divided in one time only costs and annual costs.

One time only costs

Notary costs and 'kadastrale rechten' for the mortgage deed
Valuation costs in order to get a mortgage
Bank commission called 'afsluitprovisie' in Dutch. This is normally 1% of the mortgage but can vary between 0% and 1.5%
Costs related to the National Mortgage Guarantee
Fine which has to be paid because of early repayment of the old mortgage (when you decided to change mortgage provider)

Annual costs

Interest paid on a mortgage for a maximum of 30 year
So called 'erfpacht' payments
Interest paid on other loans used for the main residence

Not deductible (costs related to the property itself)

costs of the purchase deed
notary costs for the delivery of the property
the transfer tax
repayments of the mortgage
costs of maintenance and renovation
interest on (part of) the mortgage if it's not used for the property but just to 'consume'

You can find more information about mortgages on our website.

Expatax can assist you with arranging a mortgage and also with filing your tax return.

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Comments (2)

Comment by arjan enneman on Sat, Dec 3rd, 2011 at 11:03 AM

The actual tax refund indeed depends on the applicable tax bracket. If your income falls in the 42% tax bracket you will indeed get back 42% of the interest you have paid. Additional comments: - if your taxable income falls into a lower bracket due to the deduction of course a lower percentage will be applicable (for that part of the income/deduction). For example if you have an income of € 60,000 which falls into the 52% tax bracket and you paid mortgage interest of € 10,000 your taxable income drops to € 50,000 which falls into the 42% tax bracket. So in this example part of the interest leads to a refund of 52% and the other part of 42% (the 52% tax bracket starts at around € 56,000) - Also keep in mind that the mortgage interest will be deducted from the fictitious income taken from the so called woz value of the property (see other article about woz). This income is a flat rate assessment. I will write a separate article about this calculation.

Comment by k bouss on Sat, Dec 3rd, 2011 at 7:08 AM

I believe that you get back 42% for each euro that you pay in interest. If I pay 10k for interest to the bank each year of 6%, then you will get back about 4200 euros it like having interest of r*6%= 3.12%