Taxes and mortgage deductions in the Netherlands

Buying a home in the Netherlands also means understanding the tax impact. We explain how mortgage interest deduction, property taxes and deductible costs work, so you know what to expect and how they affect your monthly and long-term costs.

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How mortgage interest deduction works

Mortgage interest deduction (hypotheekrenteaftrek)

Homeowners in the Netherlands may be eligible for mortgage interest deduction. This allows part of the interest paid on a mortgage for your primary residence to be deducted from your taxable income. To qualify, the mortgage must meet certain conditions:

The property is your primary residence.
For new mortgages taken out from 1 January 2013, the loan must generally be repaid on an annuity or linear basis within 30 years.
Mortgages taken out before 2013 may qualify under transitional rules, even if they do not follow this repayment structure.

Qualifying repayment structures typically include:

The tax benefit is applied through your annual income tax return. The level of tax relief depends on your income and applicable tax rates. In recent years, the maximum deduction rate has gradually been reduced, meaning the overall tax benefit may be lower than in the past.

How property ownership affects your tax position

Owner-occupied property tax (eigenwoningforfait)

Homeowners in the Netherlands must include a notional income in their tax return, known as the eigenwoningforfait. This is calculated as a percentage of the property’s WOZ value (the official value determined annually by the municipality) and added to your taxable income.

The eigenwoningforfait partially offsets the benefit of mortgage interest deduction, meaning the overall tax advantage depends on the balance between the two. Even if you have little or no mortgage debt, you may still be taxed on part of this amount due to changes in tax regulations.

Which costs may be deductible

Tax-deductible mortgage costs

Some costs related to arranging a mortgage may be tax-deductible. These typically include:

Mortgage advice and arrangement fees.
Notary costs for the mortgage deed.
Property valuation costs (if required for the mortgage).
NHG application fee (if applicable).

These costs are usually one-time deductible in the year the mortgage is arranged, provided the loan is used for your primary residence and meets applicable conditions.

Costs related to the purchase itself, such as transfer tax and notary fees for the deed of transfer, are not tax-deductible. Whether specific costs are deductible depends on your personal tax situation and the structure of your mortgage.

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National Mortgage Guarantee

What is the National Mortgage Guarantee (NHG)?

The National Mortgage Guarantee (Nationale Hypotheek Garantie, NHG) is a government-backed scheme that provides additional security for both borrowers and lenders.

If a homeowner is unable to repay the mortgage due to circumstances such as unemployment, divorce or disability, NHG may help limit or even waive any remaining debt after the property is sold, provided certain conditions are met.

To qualify, the property value must be below a government-set limit. Buyers pay a one-time fee for NHG, which is typically tax-deductible. Because NHG reduces the lender’s risk, mortgages with NHG often offer lower interest rates and additional support in case of payment difficulties.

NHG eligibility

When can you qualify for NHG?

Eligibility for NHG depends on several conditions set by the scheme. A key requirement is that the property value remains below the NHG price limit, based on the lower of the purchase price or the appraised market value. To qualify, you must meet conditions such as:

The property is used as your primary residence.
The mortgage meets responsible lending standards.
A one-time NHG fee is paid.

Expats can also qualify for NHG if they have a valid residency permit or are EU citizens, and their income meets Dutch stability and affordability standards. NHG support is subject to specific conditions and is not guaranteed in all situations.

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Mortgage advice for expats and tax considerations

Tax rules and mortgage structures can significantly influence the long-term cost of owning a home in the Netherlands. Understanding how mortgage interest deduction, NHG and other tax-related factors apply to your situation can help you make more informed financial decisions.

FVB de Boer is an independent mortgage advisor specialising in expat mortgages. We help you understand how financing options and tax rules work together in your specific situation.

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Frequently asked questions about

Taxes and mortgage deductions in the Netherlands

Are mortgage costs tax deductible in the Netherlands?

Yes, some costs related to arranging a mortgage for your primary residence may be tax deductible. These can include mortgage advice fees, notary costs for the mortgage deed and property valuation costs, provided the mortgage qualifies for mortgage interest tax relief under Dutch tax rules.

Are there tax benefits when buying a house in the Netherlands?

Yes, if the property is your main residence, you may qualify for tax benefits such as mortgage interest deduction for up to 30 years. For new mortgages taken out since 2013, this generally requires the loan to be repaid on an annuity or linear basis within 30 years.

Periodic ground rent payments on leasehold properties and certain mortgage-related costs may also be tax-deductible. The exact benefits depend on your mortgage, personal circumstances and the applicable Dutch tax rules.

Tax-deductible one-off costs

Some one-off mortgage costs are tax deductible if the loan is used for your main residence. These typically include mortgage advice fees, notary costs for the mortgage deed, valuation costs, NHG fees and certain refinancing costs, while purchase-related costs such as transfer tax and notary fees for the transfer deed are not deductible.

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