What to consider when buying a property together?
If you buy a property together, you must also both be the applicants for the mortgage. Whether you buy together with your partner, a friend or other family member, it’s not mandatory for the mortgage acceptance for both of you to agree on a certain type of registered union, but it would be advisable to have something in place that you agree on jointly. Here, we’ll explain the key things you need to consider.
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Buying a house together
Are you looking for a mortgage that can be repaid using a single income? Or, are you perhaps opting for a maximum mortgage based on 2 incomes? Or, something in between that would also allow some room financially for other things? It is wise to jointly discuss how much you would like to spend on monthly mortgage repayments. By using our calculation tool, you can find out how much you will be able to borrow.
You can register a property you buy jointly with your partner
Have you not got any type of registered union in place at the moment? You can choose from approximately 3 different forms: marriage, civil partnership (geregistreerd partnerschap) or a cohabitation agreement (samenlevingscontract). You can get in touch with a notary for further information and advice on which form is most suitable for you.
Married status and civil partnership
Was your marriage or civil partnership concluded before 1 January 2018, and have you not drawn up any additional conditions? If so, that means that all existing and future assets and debts of you and your partner are jointly shared; this also includes your owner-occupied home.
On 1 January 2018, the Wet Beperkte Gemeenschap van Goederen (Limited Joint Property Act) was implemented. This means that you when you marry, there is no longer an automatic joint ownership of property. Your own possessions and debts, such as a house or mortgage, will remain yours. If this is something you do not want, you can arrange that in a prenuptial agreement through a notary. The same applies to civil partnerships.
Cohabitation agreement
Within a cohabitation agreement, a registration will be made that you are joint homeowners, and therefore also jointly responsible for any mortgage debt. Even with a cohabitation contract, it is wise to take out life insurance. You can also choose to open a retention clause (verblijvingsbeding). It states that all joint ownership in the event of your death will be bequeathed to the person who you are living together with. And would you like your partner to receive any accrued dependent’s pension (nabestaandenpensioen)? If so, please contact your pension fund.
Good to know: within a cohabitation agreement you can only incorporate joint assets and not personal assets such as your savings. That is why it may also be wise to have a will drawn up by a notary.
Buying a house together in 1 name
It is possible to buy a property together on the basis of one single income, and to take out a mortgage. It doesn’t matter who invests what sum, as long as the amount is enough to finance the desired mortgage. As a couple, you are simply registered together on the property purchase agreement and the mortgage deed, even if you have a mortgage based on one single income.
The situation if one of you has previously owned a home
Have you or your partner previously owned your own home? And, are you buying a home together for the first time? If so, keep in mind that the law states that you then share the homeowner’s history with your partner in a tax/fiscal sense. This will impact your mortgage interest deduction. Ask your mortgage advisor about it, or find out more about the personal burden commitment agreement (draagplichtovereenkomst) in which partners may draw up joint agreements about the ratio/percentage of property debt.
Buying together with the help of your parents
More and more first-time buyers need help from their parents when buying a home. Parents can support you financially in a number of ways when buying a house, for example, by donating or lending a certain amount.
Life insurance
In the event that one of you should die, the other party is automatically responsible for the entire mortgage debt; applicable to many of the various forms of cohabitation and agreements as mentioned above. This is the reason why we recommend taking out life insurance, as this prevents you from no longer being able to live in the house if a death occurs, because the mortgage costs have become too high.
Seek solid advice
To determine which form suits you best, you can obtain further advice from your notary, after which we can help you find the most suitable joint mortgage. If you don’t have a notary yet, then we can also help you with that. Simply set up a no-obligation call appointment to discuss your situation with one of our mortgage advisors.
Download white paper ‘Buying a home in The Netherlands’
Do you want to go on a home hunt well prepared? You will find all the information in this white paper.