The success of the Second Home Expo fair proves it: many elder Dutch people dream of a second home. Your own place in your favourite holiday destination in order to forget the day-to-day worries or to enjoy life after retirement to the fullest. But look before you leap!
“After my retirement as a general practitioner my wife Pamela and I were looking for a house in the Dordogne department, our favourite holiday region,” says Bert Schweitzer (67) from Muiden. “We came across a dilapidated farm that we renovated ourselves, with the support of local workmen. Now, we have a lovely place with a lot of land. In the summer we stay there for at least two months and now and then we go there for a week during the rest of the year. Our personal highlights are the visits of our children and grandchildren.”
It is popular to have a second home. It is not a coincidence that the television show ‘Droomhuis Gezocht’ (‘Wanted: Dream House’) of the broadcasting network MAX was the most watched programme after the news in August. From a survey of fair organisation Second Home International (this year the fair took place from 3 to 5 October in Utrecht) it appears that more than ninety percent of all the second house owners are happy with their purchase and that only seven percent would advise against buying a second residence. The most important advantages that were mentioned are the following: to have a nice place where you can retreat, to feel healthier and to be able to take a trip more often. The extra revenues from renting out the place are considered a plus as well. The most favourite destinations are Spain (there the prices dropped by no less than forty percent), France, the Netherlands, Turkey, Austria and Switzerland.
“Use your common sense,” is the first piece of advice by Rob van Zutphen. The former option specialist bought a house in Spain and renovated it into a luxury dwelling. After some time he sold it and soon this activity became a full-time job. Other countries followed for the rental and, later on, the sale. “I would advise everyone to consult a number of local real estate agents and to opt for the one that seems the most reliable. But always hire a professional as well, a lawyer for example, in order to get advice and information about the local legislation. In Spain this is very tricky for example, whereas in France the buyers are really well protected.”
Those who buy a second home abroad or in the Netherlands are faced with a large amount of rules and laws to comply with. Those who have a house built in Spain always have to demand a bank guarantee from the builder, while in France a completion guarantee is worked with. However, in the latter country you have to pay a significant amount of taxes (15.5 percent) if you sell the house with profit again. It is beyond dispute that knowledge of the rules and laws in the country of your choice is indispensable to avoid nasty surprises. It is also important to get informed about the local law of succession and heritage tax, as you do not want to burden your children with unexpected debts later on.
You can find information about the legislation in the different countries on the websites of all the big banks. Financial aspects play a big role as well. Before you know it, you are faced with a double tax duty, which can be sidestepped quite easily thanks to the Dutch legislation. In the Netherlands a second house is taxed with 1.2 percent of the WOZ assessment in box 3. The mortgage is not tax-deductible. If you also rent out the second home the WOZ assessment decreases and there is no taxation of the revenues. Furthermore, you have to invest a lot of your own money in a second home, as most of the times only up to sixty percent of the market value is financed.
Never take a decision on the basis of emotions, e.g. the fact that you had a couple of nice holidays at a certain destination. Try to spend a somewhat longer time in the region where you are looking for a house. Sometimes hire purchase is possible; in that way you can first rent the house that you want and then later on buy it after deducting the costs that were already made. Learn the language and get to know the customs and traditions of the local people. Consult experts beforehand and talk to second house owners about their own personal experiences. This might all sound obvious, but there are a lot of Dutch people that throw themselves into an adventure abroad without really knowing the country or speaking and writing the language. Make sure that you are well prepared. In this way you can avoid a lot of disappointment and you can really enjoy your second home.
Reasons for buying a second home
• Getting some rest
• Getting away from the drag of daily life
• Alternative after selling the own home that has become too big and purchase of a pied-à-terre
• Nice place to receive family and friends
• Extensive offer at low prices
• Good investment instead of putting the money on a savings account
• Living healthier in a favourable climate
Having a second home in your own country is an ideal to many Dutch people. However, you have to make sure that you get informed about the local rules and regulations, as they might vary significantly. Although in principle holiday homes may not be used to reside in permanently, a lot of municipalities apply a policy of tolerance in this respect. Of course, it is not a complete certainty. Many Dutchmen buy a second home in a holiday park in order to go there on a regular basis and enjoy the extra income from renting it out. Furthermore, you can get back the VAT of 21 percent on the purchase price and the park often offers a guarantee with regard to the rental income. This is all very nice, but you do have to pay a bonus to this end, next to the costs for the maintenance, levies and provisions. And of course your house can suffer from the mismanagement of sometimes careless tenants. A real profit is often only attained after selling it, but you do have to bear in mind that the price for holiday homes does not increase at the same pace as the price of normal houses.
You can do it a bit differently as well. Ine and Reint Kuiper, both 60 years old and from ‘t Gooi, are passionate about sailing and used to go to Texel every holiday. After their three children had left the house, the couple bought a Lemsteraak boat of more than eleven metres. They spend all of their weekends on it. “Once Reint is retired, we will be taking long trips with our boat,” Ine says. “We will then sell our house and spend most of our time on our ship. And in the winter months, when we have to maintain the boat, we will be living in a small house in Friesland.” The couple has already settled upon their first trip: they will be sailing along the Scandinavian countries on the Baltic Sea for five months.
The Schilder family from Randstad had another objective when they bought an apartment in Callantsoog four years ago. “I am originally from this region and bought the house as an investment,” Cees says. “We do not go there on holiday with the children. We always opt for Germany. We rent out our home via an agency that takes care of most matters and gets a fee in return. The return that you get for renting out your house for about four months per year is a lot higher than when you put your money on a savings account. We place advertisements on a housing website in Germany, with a lot of success. Of course owning and renting a second home comes with a lot of red tape. I often give the house a complete check-up myself, I clean and replace worn-out furniture or linen. If you outsource that to the agency as well, then your return decreases drastically of course.”
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