Buying a second home: Housing Costs

A second home comes with expenses, such as maintenance costs and furnishings. You will also pay double living expenses (gas, water, electricity, municipal taxes). You can rent out your home to reduce these costs. You do not pay taxes on rental income. Note that this only applies if you yourself also live in the house occasionally. If you only rent it out, you may be considered an entrepreneur and then you have to pay VAT.

If you get a second mortgage loan from the bank for your vacation home, keep in mind that it is not deductible. It is better to use your equity to purchase a second home.

Taxes on a second home

Since 2017, the exempt capital is €25,000. If your equity through your second home exceeds the 25,000 €, you will pay taxes on this. If you live more than 3 months a year in your second home, you pay commuter taxes. The amount depends on the WOZ value of the house or is determined by the municipality.

Buying a second home? But where…

If you are going to buy a second home then location is important. Do you buy in the Netherlands or abroad. Are you buying a house in a vacation park? Then pay close attention to the additional costs. Think of costs you pay to the park, maintenance costs… In some parks you help pay for the renovation of the swimming pool. It is important to inform yourself well in advance.

Do you have your eye on a property abroad? Then be well informed about the specific rules of the country or region. Also remember that there are costs involved in buying a second home. Think of garden and pool maintenance, but also general maintenance on the house. Renting out your home is interesting way to make a return on your investment. If you are going to invest in real estate to make a return, it is good to think about the type of house you are buying and also the location. These factors affect your return.

Many people make the mistake of not informing themselves properly about local regulations. Get advice from someone who knows the country and region well. For example, in some countries you pay a local tax on the book profit when you sell a house. If you have not taken this into account, it is an unpleasant surprise.