Are you planning to buy a property in the Netherlands? It is important to have a good overview of the costs in advance. Buying a house brings many expenses. In case you take a loan, you have to pay the mortgage, but there are also costs associated with taking out the mortgage and having the house registered under your name.

The costs for the buyer are around 5-10 percent of the value of the property. It is often thought that the notary fee is the main expense, but that is not true. Most of the buyer costs you pay through the notarial office (notariskantoor), but is not for the notarial office itself.

You can find all these costs reflected on the bill of the civil-law notary. He withholds these expenses as he is responsible to charge levying the costs on behalf of parties such as the tax authorities. Here below, the main expenses are discussed. There may be items that you do not have to pay. This is the case when the buyer and seller agree that the seller will bear certain expenses.

Costs for the Land Registry
You pay the Land Registry to register the deed of transfer (leveringsakte), mortgage deed and inquiries of the notary. This payment is made through the notary because he arranges the registration.

Notary fees
The expense may seem obvious. You pay a notary’s office for all the work they perform for you. It is always wise to ask about the costs in advance not all notarial offices apply fixed rates. If it happens that the notary has to solve certain issues or arrange unforeseen things, there can be out of scope services. In addition, some activities are standard and others are not.

Transfer tax
When you buy an existing property, you pay two percent transfer tax (overdrachtsbelasting). Starters are exempt from transfer tax and professional investors pay eight percent. The filing and payment of the transfer tax to the authorities will be handled by the civil-law notary. Despite the comforting role of the notary, it is wise to consult a Dutch tax advisor when buying a property.

VAT
Are you buying a new-build home? Then you pay VAT instead of transfer tax. The VAT is also transferred by the notary to the selling party.
Real estate agent costs
If you have engaged a real estate agent to provide guidance during the purchase process, you pay a fee that is often a percentage of the value of the property. You can ask the notary to pay the fee to the real estate agent.

Charges and taxes
When charges and taxes are mentioned, you should think of sewerage rights, property tax, water board charges and, for example, ground lease. These are costs that you have to pay from the moment you own the house. It often happens that the seller has already paid for these items for the entire year. In such case, the notary ensures that the seller will get back the charge and taxes that were overpaid by recharging them to the buyer.

Deductibility of costs
Some mortgage costs are a deductible for income tax purposes. On the site of the Dutch tax authorities, which is also available in English, you can see exactly which costs are deductible and how you should arrange this.

When do I have to pay?
On the invoice of the notarial office, you find the amounts you receive and pay. The final amount on the bill can be negative or positive. If you have to pay any amounts above the mortgage amount, it is important to transfer this amount to the notary well before the transfer. If the money is not received on time, the transfer deed will not be executed.
If the final amount is a receivable, the notary will transfer the amount to your bank account after registration with the Land Registry.

Who bears the notary fees?
The buyer and seller agree on who is paying the notarial expenses and record it in the purchase agreement of the property. The buyer usually pays the notary fees associated with the transfer of the property, but it is also possible that the seller pays (part of) these costs. This is in particular common with new-build homes and also seen more and more often with existing homes.

Why would a seller pay the notary?

The party which pays the notary fees for the transfer of the property usually chooses the notary. The seller may like to choose because he or she can then select the notary that helped with the purchase of the house. The notary can in such case arrange possible issues before the actual transfer. Especially if the sale of the property is part of a settlement of an inheritance, it can be convenient if one notary arranges all notarial matters.

What is the reason that a notary is involved in the transfer of Dutch property?
Almost everywhere in Europe, including the Netherlands, a notary takes care of all legal matters concerning the transfer. The notary is also the only one who can do that. This gives all parties certainty. In other countries, such as America, they do not have a notary. Since buyers have to take out expensive insurances to be covered for potential issues. In these countries, a relatively large amount of fraud is committed with transfers of properties, for example by selling the home to several people at the same time or by selling a home without the owner’s knowledge. Buyers and sellers often have their own adviser, which means that the costs increase significantly, but it does not efficiently eliminate the risks. So, it is a good thing that in the Netherlands you can rely on a notary.