2022 was an up and down sort of year. It started out with an annual house price rise of 21% and ended with house prices going down. In fact, according to the national statistics agency CBS, the price of the average house dropped by around €18,000 over the past three months. Interest rates started out at around 1.4% for a 10-year fixed mortgage and this month we are looking at upwards of 4.5%. More properties have come on the market, but fewer people are buying. The number of transactions registered with the Kadaster land registry office actually fell by 17% in the first 10 months of the year. So all in all, there was a lot going on. What are the trends for 2023?
For a start, the government is increasing the transfer tax on buy-to-let properties from 8% to 10.4%, in an effort to dissuade people from buying up homes as an investment – so that may mean more properties become available for first time buyers. Ministers have also decided that first-time buyers up to the age of 35 will not have to pay transfer tax on the first €440,000 of the price of a property – that’s a 10% increase on the situation this year. And if you spot a bargain, you might be able to qualify for the national mortgage guarantee scheme, or NHG, which will now cover properties up to €405,000. You do get a slightly lower interest rate under the NHG guarantee scheme, and if you find yourself in financial difficulty or forced to sell at a loss, you may well be eligible for help.
Don’t forget that you can borrow more than 100% of the value of the property if you plan to invest in boosting its energy efficiency – and who isn’t given current energy prices? You may not realise it, but if you are taking out a new mortgage, you can borrow an extra €9,000 – on top of the maximum 100% loan to value – to make your house greener. You can’t spend it on a new central heating boiler, but you can use it to help pay for double glazing, extra insulation, or a heat pump and solar panels. Even if your new house is well insulated – if it has an energy label B, for example – there is always something you can do to improve it. And the bank will allow you to borrow this extra amount, even if you can’t technically afford it.
The tax deduction on mortgage interest will go down a little, from 40% to 37.05% next year. But the government has agreed that if you are a couple, 100% of your partner’s salary can be added to the total when working out how much you can borrow. This year, the figure is 90%. So that gives you a little more scope to borrow more. What else should you be thinking about?
We keep on saying it, but it still stands: Get prepared. Check out the different Dutch cities where you might like to buy or go wild in the country. The better prepared you are to make a move on that dream home, the more likely it is to become yours. Here’s a handy checklist of things to think about when planning to become a first time buyer. And if you think you have got it all sorted, take our test to find out just how much you really know about the housing market in the Netherlands.