Netherlands
Last Updated:
Jun 18, 2010
The Dutch economy continues to recover. House prices and housing sales were higher in April 2010 compared to the same month last year. The average of owner-occupied dwellings increased by 1.5% y-o-y to €241,289, according to data published jointly by the Statistics Netherlands and the Dutch Land Registry Office.
In terms of property types, owner-occupied apartment prices rose much faster than those of single-family homes. The average price of apartments was €189,540 in April 2010, up by 4.9% from a year earlier. On the other hand, the average price of owner-occupied single-family houses rose by only 0.6% to €264,249, over the same period.
It should be noted that when the corresponding price indices are used (instead of the euro-denominated units), property prices in April 2010 will appear to be lower compared to the same month last year. This may be due to the removal of extremely expensive houses in the construction of the index.
The number of housing transactions was also significantly higher in April 2010 compared to the same month last year. A total of 11,069 dwellings were sold, 9.9% higher from a year earlier. Sale of single family homes rose 8.7% to 7,225 units while apartment sales rose 9.8% to 3,482 units.
Data from the Dutch Association of Real Estate Agents (NVM) show a stronger housing market for the first quarter of 2010. The average house price was €232,000, up by 6% from a year earlier and 1.35% from the previous quarter. Their figures also show that 30,500 dwellings were sold, higher by 14.7% compared to the same period last year.
The Dutch economy expanded by 0.2% q-o-q to Q1 2010, the third consecutive quarter of GDP growth. After a 4% contraction in 2009, the economy is expected to grow by 1.3% in 2010 and 2011. Although the unemployment rate rose to 4.1% in April 2010 from 3.2% the year earlier, the Netherlands still has one of the lowest unemployment rates in the entire EU.
In terms of property types, owner-occupied apartment prices rose much faster than those of single-family homes. The average price of apartments was €189,540 in April 2010, up by 4.9% from a year earlier. On the other hand, the average price of owner-occupied single-family houses rose by only 0.6% to €264,249, over the same period.
It should be noted that when the corresponding price indices are used (instead of the euro-denominated units), property prices in April 2010 will appear to be lower compared to the same month last year. This may be due to the removal of extremely expensive houses in the construction of the index.
The number of housing transactions was also significantly higher in April 2010 compared to the same month last year. A total of 11,069 dwellings were sold, 9.9% higher from a year earlier. Sale of single family homes rose 8.7% to 7,225 units while apartment sales rose 9.8% to 3,482 units.
Data from the Dutch Association of Real Estate Agents (NVM) show a stronger housing market for the first quarter of 2010. The average house price was €232,000, up by 6% from a year earlier and 1.35% from the previous quarter. Their figures also show that 30,500 dwellings were sold, higher by 14.7% compared to the same period last year.The Dutch economy expanded by 0.2% q-o-q to Q1 2010, the third consecutive quarter of GDP growth. After a 4% contraction in 2009, the economy is expected to grow by 1.3% in 2010 and 2011. Although the unemployment rate rose to 4.1% in April 2010 from 3.2% the year earlier, the Netherlands still has one of the lowest unemployment rates in the entire EU.
Analysis of Netherlands Residential Property Market »
RENTAL YIELDS
Last Updated: Jul 29, 2009
Rental yields in Amsterdam have decreased in 2009 to 5.71%, down from 7.69% from the previous year. Smaller units of 70 square metres (sq. m.) generate gross yields of around 5.95%.
The average selling price of an Amsterdam apartment is around €4,437 per sq. m.
Apartments in The Hague have a slightly lower average yields at 5.5% for a 120-sq. m apartment, compared to 5.61% in Amsterdam. The Hague’s per sq. m prices are lower at €3,102 per sq. m.
The average selling price of an Amsterdam apartment is around €4,437 per sq. m.
Apartments in The Hague have a slightly lower average yields at 5.5% for a 120-sq. m apartment, compared to 5.61% in Amsterdam. The Hague’s per sq. m prices are lower at €3,102 per sq. m.
TAXES AND COSTS
Last Updated: Nov 19, 2008
Effective Tax Rate on Rental Income |
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| Monthly Income | €1,500 | €6,000 | €12,000 |
| Tax Rate | 15% | 17.3% | 20% |
| Click here to see a worked example | |||
Source:
Disclaimer |
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Rental Income: The income tax on renting residential property is quite high, though the tax is not really an income tax. In reality it is a flat tax, with 30% levied on the assumed rental yield, the basis of assumption being that a rental yield of 4% is made on the assets. In effect, an annual tax of 1.2% is imposed on the value of the assets. If your rental property yields more than 4%, the proportionate tax rate is lower.
Capital Gains: The sale of real estate that was used as part of a rental business enterprise, capital gains are taxed as part of income in Box 3 i.e. 30%.
Inheritance: Wealth acquired by inheritance from an individual who has properties in the Netherlands is subject to inheritance tax. Different rates apply, depending on the relationship between the heir and the testator where there are three categories.
Residents: Residents are taxed on their worldwide income.
Capital Gains: The sale of real estate that was used as part of a rental business enterprise, capital gains are taxed as part of income in Box 3 i.e. 30%.
Inheritance: Wealth acquired by inheritance from an individual who has properties in the Netherlands is subject to inheritance tax. Different rates apply, depending on the relationship between the heir and the testator where there are three categories.
Residents: Residents are taxed on their worldwide income.
BUYING GUIDE
Last Updated: Nov 08, 2006
Total transaction costs are between 10.5% and 13.74% of the total dwelling price for existing houses, which is moderate by international standards. The bulk of these costs are paid by the buyer, including the Transfer Tax (6%), legal fees and registration fees. Real estate agent’s commission at 2% to 4% (plus 19% VAT) is shared between buyer and seller.
If the property is newly constructed (or less than two years old) the Transfer tax is replaced with the 19% VAT.
If the property is newly constructed (or less than two years old) the Transfer tax is replaced with the 19% VAT.
LANDLORD AND TENANT
Last Updated: May 22, 2008
Dutch rental market practices are pro-tenant.
Rent: Landlords can set the rent freely and adjust the rent, for properties above the ‘liberalization rent limit’ of €604.72 per month. A deposit of two to three months is customary.
Tenant Security: The most dangerous aspect for a landlord in the Netherlands is that once a property has been rented, tenants are almost impossible to evict. The basic Dutch rental contract is one of unlimited duration. Landlords can only give notice in strictly defined cases, and it is extremely difficult for owners to evict tenants once they are established.
Rent: Landlords can set the rent freely and adjust the rent, for properties above the ‘liberalization rent limit’ of €604.72 per month. A deposit of two to three months is customary.Tenant Security: The most dangerous aspect for a landlord in the Netherlands is that once a property has been rented, tenants are almost impossible to evict. The basic Dutch rental contract is one of unlimited duration. Landlords can only give notice in strictly defined cases, and it is extremely difficult for owners to evict tenants once they are established.
ECONOMIC GROWTH
Last Updated: Jun 18, 2010
Export contraction lead to recession
The Netherlands, with a population of 16.5 million, is one of the most densely populated countries in the world, with GDP per capita of US$52,000 in 2008. The Dutch are strong advocates of free trade, it is a founding member of EU, OECD and WTO.
During the previous decade, policymaking by consensus between the government, unions and employers kept wages low, which led to an unprecedented economic boom in the latter half of the 1990s, with virtually no unemployment, thriving growth, low inflation and strong exports.
Real private sector wages rose by an average of 3.6% annually between 1996 and 2001; while average inflation was only 2.7%.
The Dutch economy was in the doldrums from 2001 to 2003 due to the global economic slowdown combined with political uncertainty, annual GDP growth slowed to an average of 0.8%. The political and economic situation stabilised in 2003 with the Dutch economy eventually recovering. GDP grew by an average of 2.8% annually from 2004 to 2007.
In 2008, the economy was affected by the global financial meltdown and economic slowdown, with GDP growing by 2%. In Q1 and Q2 2009, Economic malaise continued with GDP contracting by 4.5% and 5.4% y-o-y, respectively. Projections on the economy see a sharp fall in GDP for the entire 2009, with estimates ranging from 4.5% to 6%.
The Dutch economy relies heavily on foreign trade (contributing around two-thirds of GDP), and the fall in net exports is the main cause of the recession. The volume of exports of goods and services dropped 10.9% y-o-y to Q2 2009, while imports fell 10%.
For the entire 2009, the volume of exports and imports are anticipated to fall by 17.25% and 14%, respectively.
The unemployment rate is expected to rise to 6% in 2009 and 9.5% in 2010 from 4% in 2008. In a survey by Rabobank earlier this year, around 60% of the respondents said that they are not planning to move. Uncertainty about employment and income was cited by 40% of those not planning to move as a major factor for their decision.
During the previous decade, policymaking by consensus between the government, unions and employers kept wages low, which led to an unprecedented economic boom in the latter half of the 1990s, with virtually no unemployment, thriving growth, low inflation and strong exports.
Real private sector wages rose by an average of 3.6% annually between 1996 and 2001; while average inflation was only 2.7%.
The Dutch economy was in the doldrums from 2001 to 2003 due to the global economic slowdown combined with political uncertainty, annual GDP growth slowed to an average of 0.8%. The political and economic situation stabilised in 2003 with the Dutch economy eventually recovering. GDP grew by an average of 2.8% annually from 2004 to 2007.
In 2008, the economy was affected by the global financial meltdown and economic slowdown, with GDP growing by 2%. In Q1 and Q2 2009, Economic malaise continued with GDP contracting by 4.5% and 5.4% y-o-y, respectively. Projections on the economy see a sharp fall in GDP for the entire 2009, with estimates ranging from 4.5% to 6%.
The Dutch economy relies heavily on foreign trade (contributing around two-thirds of GDP), and the fall in net exports is the main cause of the recession. The volume of exports of goods and services dropped 10.9% y-o-y to Q2 2009, while imports fell 10%.
For the entire 2009, the volume of exports and imports are anticipated to fall by 17.25% and 14%, respectively.
The unemployment rate is expected to rise to 6% in 2009 and 9.5% in 2010 from 4% in 2008. In a survey by Rabobank earlier this year, around 60% of the respondents said that they are not planning to move. Uncertainty about employment and income was cited by 40% of those not planning to move as a major factor for their decision.
