UK Mortgages for Expats & Foreign Nationals Living in the Netherlands
There’s no denying that UK expats who live in the Netherlands sometimes find it hard to get mortgages on properties located back home. However, you certainly shouldn’t shelve your plans if this is something you’re interested in doing. Although hurdles like lender regulations, currency exchanges and profit verification challenges can make things tough, it’s far from impossible to buy a UK property from Holland – even if you have been turned down by the big-name British banks.
One of the best ways to make your plans a reality is to get in touch with an expat mortgage broker. These brokers specialise in helping people in your situation and are here to bring your vision to life.
Who Can Apply for Expat Mortgages in the Netherlands?
You may have a great chance of getting a UK expat mortgage if you’re from the United Kingdom but are now based in Holland. In fact, you could even get a mortgage on a UK property if you’re not a UK citizen but want to buy a property there.
One thing that can really help you get a UK property mortgage in the Netherlands is being a salaried individual. You may get the assistance that you need whether you work for a company directly or if you’re self-employed. There are brokers waiting to assist you if your money comes from Holland, the UK or anywhere else.
How Large Does My Deposit Need to Be to Buy UK Property in Holland?
If you want to buy a UK property whilst on Dutch soil, you’ll usually need to pay around 25-50% of the property value as a deposit. There are various things which can influence the deposit size, and these include the specific requirements of your lender as well as your current financial profile.
I Have a Poor Credit Rating, Will This Be a Problem?
Things can be tougher if you have a low credit score, but you may be surprised to learn just how many lenders work with people who don’t have great credit. Expat Mortgages UK is a great example of a broker who can put you in touch with lenders who don’t expect you to have a fantastic credit score.
What Mortgage Options are Available for UK Expats in the Netherlands?
One option that could be available to you is a buy-to-let mortgage. This is ideal if you want to generate rental income from your property. Lenders look at potential income from rent when deciding whether to approve you for these mortgages. The income from rent should exceed your costs by 125 – 145%. You’ll need to get a property management company or letting agent to look after the property and deal with tenants if you’re staying in the Netherlands.
You may also be able to get an expat residential mortgage. This could be suitable if you plan on returning to the UK regularly or moving back further down the line. You won’t be able to get this kind of mortgage if you’ll be renting the property out to tenants.
A residential mortgage could also be a good option if the lender is happy with your plans for the property. For instance, you might intend to move into it later or renovate it. You’ll need to convince your lender that you’ll comfortably be able to pay the mortgage as well as your Netherlands living expenses if you want a residential mortgage.
Remortgaging could be an option if you’re already the owner of a property in the UK. This is a popular option as it can mean getting superior terms and rates than your current ones. It also lets you release equity from the property.
Before you apply for any kind of mortgage, make sure you’ve carefully thought about all the costs. Thankfully, specialist mortgage brokers can show you the full picture and let you know about clauses like Early Repayment Charges (ERCs). These could become payable once your current mortgage comes to an end.
Challenges Expats in the Netherlands Face and How We Can Assist You
There are quite a few challenges you could come up against when you’re planning on buying UK property from the Netherlands. Some of the biggest ones can include stringent lending rules, currency exchange fluctuations, income verification and less access to mainstream UK lenders than you might expect.
We can help you overcome all these hurdles by connecting you with flexible specialist lenders. We treat every case individually, giving you bespoke advice that’s always based on your specific situation. Another way we help you is by reducing your admin workload. This means we collaborate with you to gather and upload all the documents that estate agents, lenders and solicitors need to get things moving. We also update you whenever there are new developments to tell you about.
When you work with us, you’ll also get unrestricted access to your very own Dedicated Case Manager. You can reach them through email or the phone, and access to our innovative client portal will also be available. This means you’ll be able to login to get a summary of the current situation at any time, day or night.
UK Expats in the Netherlands: How the Mortgage Application Process Works
We’ll get the wheels in motion with your initial consultation, during which we’ll examine your situation closely. This means looking at your available deposit, income, employment status, financial obligations and credit reports. We’ll also need to see your residency documents, ID and payslips.
Once they have the information they need, your advisor will use it to search across the whole market for the most suitable lenders and mortgage options. If you have a UK credit report, this will be very helpful, but we can use a Dutch one if necessary. We’ll work with you to fill in and submit the application form to the lender, ensuring it’s in the exact style and format they require. A valuation of the property you want to buy will also be carried out before approval. If the lender is satisfied with the valuation and condition of the property, a formal mortgage will be issued to you.
After a few further steps are completed, the contracts will be signed and exchanged. The funds will then be released and completion will occur, with you becoming the official owner of your new UK home!
Why Choose Us?
There are many benefits to look forward to when you choose us. As well as whole-of-market lender access that gets you the finest terms and rates, we offer personalised services, an innovative client portal and vast experience in helping UK expats living in Holland secure a UK Mortgage.
Interested in finding out monthly mortgage costs and deposit needed? Try our Expat Mortgage Calculator UK today.
Tax Considerations of a UK Mortgage When Living in the Netherlands
If you are a UK expat or foreign national living in the Netherlands with a mortgage on a UK property, it is crucial to understand the tax implications of holding assets across borders. The Netherlands has a well-developed personal income tax regime, however, the UK holds taxing rights over income and gains sourced in the UK, particularly rental income and capital gains from UK property.
UK Rental Income: Still Taxable from Abroad
If you live in the Netherlands and are renting out your property in the UK, you are still liable to UK income tax on the rental profits, which is administered via the UK Tax Self-assessment. There will usually be some allowable costs that you can deduct, such as mortgage interest, repairs, letting agent fees and maintenance costs, to help limit your taxable profit.
As a non-resident landlord, you may need to register under the UK’s Non-Resident Landlord Scheme (NRLS), which requires the letting agent or tenant to withhold basic rate income tax at source from the rental income you receive (unless you have been given approval to receive rent gross and submit your own returns).
Taxation in the Netherlands: Box 3 Implications
Dutch residents are not exempt from taxation on worldwide income and assets. Therefore, while it is likely that the UK rental income will not become subject to taxation as income (Box 1) in most situations (though there are exceptions), it is likely that the UK property would normally be treated as falling within Box 3 (taxation of assets). You would be taxed annually on a fictitious return on the net value of your overall assets (i.e. the value of your overseas property, in addition to everything else you own), rather than your income. However, there also may be relief from double taxation, given the applicable UK-Netherlands tax treaty as it relates to your property in the UK.
It is especially important to include the details on your UK property and any outstanding mortgage when it comes time to file your Dutch tax return. Even if you are not being taxed in the Netherlands on the rental income, the value of the asset contributes when you compute your overall taxable base in Box 3.
Mortgage Interest Relief and Deductibility
Mortgage interest tax relief in the UK has been progressively limited in recent years. This has reduced the tax efficiency of property letting for many landlords (especially higher-rate tax payers). You must consider how these changes impact your net rental income and if your investment is still viable based on the current tax situation.
From a Dutch point of view, mortgage interest is generally not deductible for foreign properties that you declare in Box 3, however, the value of any remaining loan can be used to offset net asset values when calculating Box 3.
Capital Gains Tax on UK Property Sales
If you sell your UK property from your residence in the Netherlands, you will still owe UK Capital Gains Tax (CGT) on any profit that was accrued on your sale of that property. Since changes in 2015, and then further changes in 2019, most disposals – whether by non-resident or resident – of UK residential property are broadly covered by UK CGT rules. Exemptions and allowances apply but have narrowed over time, and even if no tax is owed, you must report the disposal to or otherwise notify HMRC.
In the Netherlands, capital gains from physical individuals selling property privately are generally not taxed; however, you need to check whether the gain impacts your Box 3 position or creates any other tax obligations under Dutch national law.
Seek Specialist Tax Advice
Taxation of cross-border property investment can be a complicated matter, and often involves two different tax systems. Given the frequency of changes to UK and Dutch tax laws, and the necessity of considering your particular personal circumstances, you are advised to speak to a Tax Adviser who is familiar with UK and Dutch tax systems. This is particularly important if you are planning on buying or selling UK property, or if you plan on continuing to receive rental income from your investment whilst living in the Netherlands.
FAQs: UK Mortgages for Expats in the Netherlands
What is the minimum deposit required for UK mortgages for expats in The Netherlands?
A minimum deposit of 25% is usually required, although we may be able to negotiate a lower amount.
I earn my money in Euros - can I still get a UK mortgage?
The lenders we work with allow for fluctuations in currencies, which means receiving income in Euros won’t be an issue.
Can I still apply for a mortgage if I have no Dutch income?
A lack of Dutch income doesn’t necessarily mean you can’t get a mortgage on a UK property, as long as you do have money coming in from other sources. The lender will consider all your income when making a decision, so provide as much evidence of it as you can.
How long does it take to get Dutch UK expat mortgages approved?
This can vary. Some buyers only wait two weeks, whilst others get approval after around six. Collecting and submitting documents, the valuation process, waiting for responses and dealing with files can all influence waiting times.
Will my application be approved if I plan on returning to the UK?
Many lenders treat those who wish to return to the UK positively as this shows they have strong long-term ties to the United Kingdom. This means you could boost your chances of approval if you’re planning on returning in the future.
UK Expat Guide to Living in the Netherlands: Best Cities, Regions & Property Hotspots
The Netherlands, or Holland as it is more formally known, has been a popular destination amongst UK expats for many years. It offers a great standard of living, reliable infrastructure and a fantastic way of life.
Amsterdam is the country’s capital and is a world-class business and culture hub. Famous for its cafes, canals and museums, it has attracted professionals from around the world thanks to its cosmopolitan feel, dependable public transport and diverse job opportunities.
Rotterdam could also be a great option if you’re interested in Dutch city living. It’s got an exciting creative scene, stunning modern architecture and a slightly lower cost of living than Amsterdam.
Utrecht and Haarlem are smaller cities with plenty of excellent facilities. Leiden and Delft are historic towns that are ideal for those in need of picturesque surroundings. Eindhoven is in the southern province of North Brabant, which is known for its exciting tech scene, and there are many idyllic green spaces and affordable homes in Friesland and Drenthe.
Another great thing about living in the Netherlands is that you’ll still be within easy reach of the UK, which you can quickly reach via ferry, the Eurostar and air with Amsterdam’s Airport Schiphol being one of Europe’s main hubs.
Talk to Expat Mortgages UK
We’re ready to hear from you if you require a British expatriate mortgage living in the Netherlands. We are passionate about helping our clients make this happen, so connect with us today to find out more.
Why not contact us right now to see for yourself?