Of course, there are a lot of benefits to buying a house. Apart from the fact that you own real estate of which the price may increase again, there is the advantage of a tax relief on the mortgage interest – it is tax-deductible if the house is your principal place of residence. In addition, a number of the costs related to the financing of the house are also tax-deductible. These are both issues that this article goes into.
Although at first sight it might seem an attractive option to buy a house, it is a decision that needs serious and careful consideration. A disadvantage when buying real estate in the Netherlands is that you have to pay approximately 6% of the purchase price as one-time buyers’ expenses. In addition to this, homeowners must add the so-called deemed rental value (you can read more about this in the article) to their taxable income and pay taxes over this.
As a result, the break-even point between rent or buy usually occurs after a few years, assuming that housing prices remain constant. Bearing in mind that expatriates usually stay in the Netherlands for a relatively short period, this is an important issue to keep in mind. This risk makes buying a medium to long-term decision (five years).
Of course, if you rent a house, you circumvent a lot of the problems and risks, but you also miss out on the possible benefits.