The main types of property right in the Netherlands are:
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No.
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Yes, certain agricultural tenants (pachters) may have pre-emption rights and local authorities can impose pre-emption rights on a property under the Environment and Planning Act (Omgevingswet). Also, it is possible to agree to create (obligatory) pre-emption rights.
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The legislation that applies to real estate transactions is:
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No, except for residential real estate.
In a consumer sale of residential real estate, it is not allowed to derogate to the detriment of the buyer from articles 7:1-38 of the Civil Code (except for articles 7:12, 7:13 sentences 1 and 2, 7:26 and 7:35 of the Civil Code, as long as these derogations are not stipulated as general conditions), and in such sale there may be no limitations on, or exclusion of, the legal rights and remedies of the buyer for any failure in the performance of the obligations of the seller (article 7:6 Civil Code).
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The purchase agreement forms the basis of the transfer deed. This deed is signed by all parties and executed in a notarial transfer deed by the Dutch civil law notary, who then submits a certified copy to the Land Registry. With the registration of this certified copy the transfer is complete.
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Yes.
In the Netherlands the Land Registry records all important information concerning real estate. All property has its own specific section and number in the Land Registry, which is available online to everyone. It is impossible to transfer property without registration.
No, the registration process offers the buyer an appropriate level of security.
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The normal steps in a real estate transaction are as follows:
Both prior to and after executing the notarial transfer deed the Dutch civil law notary will check:
After executing the transfer deed, the Dutch civil law notary submits a true copy of the deed to the Land Registry, which registration is the actual moment of delivery and transfer of the real estate.
A Dutch civil law notary generally arranges the financial completion of a property transaction.
Because the Dutch civil law notary is at the heart of the financial arrangements, he will not execute any deed before he is certain that the entire purchase price (plus other costs and taxes payable) has been transferred to the notarial trust account. The purchase price (and other amounts to be paid to the seller or the seller’s bank) is not paid to the seller until the Dutch civil law notary has confirmed that the property is not encumbered with any mortgages or enforcement, other than those that were disclosed when the transfer deed was signed.
It is common in larger transactions to agree in a separate 'notary letter' amongst seller, purchaser, lender and notary on the flow of funds.
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The buyer and seller will agree on the scope of the investigations in a letter of intent. The buyer will, in particular, investigate the title of the real estate, lease contracts, zoning and environmental issues, such as asbestos and soil pollution.
Due diligence normally takes several weeks.
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A spouse must give consent in writing for the sale of the marital home.
In addition, depending on the articles of association of a company, the management board of a B.V. (the Dutch equivalent of a private limited company) or an N.V. (the Dutch equivalent of a public limited company) may need the permission of the supervisory board for certain transactions.
Also, permission may be required with respect to some specific categories of real estate, such as hospitals and school buildings.
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The sale and purchase contract relating to real estate must include:
For business real estate transactions, Dutch law gives no further requirements. However, of the buyer is a private individual and the property is a residence, it is required that the SPA be entered in written form.
A typical contract or SPA will include clauses regarding the following:
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Under Dutch law, the seller guarantees that it has valid title to the property, and that the property is free from any mortgages and enforcement. The seller also has an obligation to transfer the property in accordance with the agreement by both parties, as set out in the transfer deed: this usually includes the size and the use of the building.
Other warranties can be negotiated by the parties.
It is generally agreed that complaints about the state of the property must be made within two months and any court proceedings must be instigated within two years of purchase.
In addition, the seller must provide the buyer with an energy certificate or a similar document in accordance with the Dutch Structures Living Environment Decree (Besluit bouwwerken leefomgeving). The energy certificate states the energy consumption of the property being transferred and offers advice on how to reduce this consumption.
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Buyer's remedies against misrepresentation include:
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Under Dutch law, in principle the owner of the title to a real estate asset is responsible for preventing soil pollution and/or contamination and also must implement decontamination measures. Alternatively, should the owner demonstrate that another party is responsible for the pollution, this party may be held liable for remediation costs.
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The buyer should investigate the applicable environmental law decisions, primarily the applicable municipal environmental plan, via a publicly available database. Use can be changed through an exemption (vrijstelling) procedure.
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Yes. Exploitation agreements with municipalities deal with the extent to which municipalities financially and practically enable projects. Such enabling may regard creating access to public services and to roads. Municipalities as private law entities are often restricted by their public law decision making and public tendering procedures. Case law proves exploitation agreement require diligent drafting to put actual obligations on municipalities.
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Yes, Dutch law provides specific public law authorities with the authority to seek to expropriate property if this is in the public interest. Strict criteria must be met before this can be done.
Once the environmental plan has been finalized (and no further appeals are possible) expropriation begins with an administrative law procedure under which objections and appeals in relation to the private interests of the landowners are possible. This is followed by a civil law procedure where experts are appointed to determine the damages suffered by the owners, tenants and others whose property has been subject to expropriation (based on the 'full compensation' principle).
Also, many leasehold conditions contain a clause stating that the right of leasehold may be terminated on grounds of public interest. Such clauses will often seek to provide for a similar process to public law expropriation proceedings including compensation for damages for the expropriated leaseholder. A recent Supreme Court ruling has stated that these clauses are legally valid.
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A transfer tax at 10.4% applies, unless residential property is involved. For residential properties, a transfer tax rate of 2% is applicable (only) in case the new owner will use the property for its own occupation. There is an exemption for transfer tax in case the value of the newly acquired property is under EUR510,000, the buyers are between 18 and 35 years old and the buyers have not taken advantage of this exemption before.
Real estate transfer tax (RETT) is based on the higher of the fair market value of the relevant property or the purchase price paid for the property. RETT is payable on the acquisition of the legal and/or beneficial ownership of real property (and in some circumstances, qualified shares or membership rights).
The Dutch civil law notary must receive the purchase price (including costs and RETT) payable by the buyer prior to the execution of the transfer deed. The notary is jointly and severally liable for the RETT, and will not execute any deeds before the transfer tax has been transferred to the notarial trust account. To comply with notarial professional rules, the purchase price (including costs and RETT) must be paid to the notarial trust account by the buying entity. If any entity other than the buyer pays the purchase price, the notary must obtain clarification with respect to the source of the funds used in the transfer in question.
Notwithstanding this, it is possible for a buyer to pay the purchase price directly to the seller (through an escrow account if desired). This will be reflected in the wording of the deed of transfer.
In the case of newly built (and in some cases thoroughly renovated) real estate, the transfer may instead be subject to turnover tax (VAT) at 21%.
Normally the buyer will pay most of the costs. However, in the case of newly built property, costs are normally paid by the seller.
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Real estate transfer tax can be payable in relation to both asset deals and share deals. Real estate share deals are situations where the company being acquired qualifies as a 'real estate company' ie, if at least 50% of its assets consist of real estate (either in the Netherlands or abroad) and that real estate is mainly (70% or more) instrumental in the trading of and/or development of real estate, and at least 30% of those assets are located in the Netherlands. The rate of the real estate transfer tax is 10.4%.
The real estate transfer tax is usually paid by the buyer. An exemption from real estate transfer tax can sometimes be obtained.
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Which taxes are relevant/which transaction costs will be incurred when buying real estate as an asset (asset deal) and how are the transaction costs shared between the buyer and seller?
A transfer tax at 10.4% applies, unless residential property is involved. For residential properties, a transfer tax rate of 2% is applicable (only) in case the new owner will use the property for its own occupation. There is an exemption for transfer tax in case the value of the newly acquired property is under EUR510,000, the buyers are between 18 and 35 years old and the buyers have not taken advantage of this exemption before.
Real estate transfer tax (RETT) is based on the higher of the fair market value of the relevant property or the purchase price paid for the property. RETT is payable on the acquisition of the legal and/or beneficial ownership of real property (and in some circumstances, qualified shares or membership rights).
The Dutch civil law notary must receive the purchase price (including costs and RETT) payable by the buyer prior to the execution of the transfer deed. The notary is jointly and severally liable for the RETT, and will not execute any deeds before the transfer tax has been transferred to the notarial trust account. To comply with notarial professional rules, the purchase price (including costs and RETT) must be paid to the notarial trust account by the buying entity. If any entity other than the buyer pays the purchase price, the notary must obtain clarification with respect to the source of the funds used in the transfer in question.
Notwithstanding this, it is possible for a buyer to pay the purchase price directly to the seller (through an escrow account if desired). This will be reflected in the wording of the deed of transfer.
In the case of newly built (and in some cases thoroughly renovated) real estate, the transfer may instead be subject to turnover tax (VAT) at 21%.
Normally the buyer will pay most of the costs. However, in the case of newly built property, costs are normally paid by the seller.
Last modified 22 Mar 2024