the Netherlands

[Aard-Jan Gaag]

Hi All,

I was wondering if here are any Dutch people around who are willing to meet me and talk about how to start in the Netherlands. I think it is a different game here than it is in the US and I was wondering if someone with experience can teach me some where to start and how all the different loans etc works here.

Im still new in the game but willing to go all-in.

[Dennis Cosgrave]

For those readers who are unfamiliar with the Dutch housing market, there are significant differences when compared to the US market. First, the tax system is very different. There is no such thing as capital gains tax in the Netherlands. All income is added up and taxed at the marginal rate. The only exception is corporate dividends. Secondly, the tax treatment of income property is also very different. For example, you purchase a SFH and rent it out for $1,000 per month which adds up to $12,000 per year. That income is not added to your personal income. Likewise, none of the expenses can be deducted. The only tax you pay is a "wealth tax" on the equity in the property. Let's say the purchase price is $250,000 and you have a mortgage of $190,000. You will pay a 1.4% tax on the $60,000 in equity. Out of that $12,000 gross income, you pay the operating expenses, property taxes (which are far lower than in the US), and the mortgage. The net income is not taxed. Should you decide to sell the property in a few years, whatever profit you earn is added to your income and taxed at the marginal rate. There is no such thing as a 1031 exchange mechanism.