Specific expertise test replaced by salary norm 

The salary norm that replaces the ‘specific expertise’ test will be EUR 50,000. When the full 30%-reimbursement is provided the actual gross salary (excluding the 30%-reimbursement) should thus amount to at least EUR 35,000. For PhD-students the salary norm will be EUR 38,007. When the full 30%-reimbursement is provided the actual gross salary (excluding the 30%-reimbursement) should thus amount to at least EUR 26,605.

The salary norms will be subject annually indexation. The condition that the specific expertise should be hard to find on the Dutch labour market remains in force.

Cross-border workers

The definition of foreign employee will be adjusted in such way that employees who reside within a radius of 150 kilometers
from the Dutch borders are not eligible for the 30%-ruling. An employee will however remain eligible for the 30%-ruling in case in
the 24 months preceeding the commencement of the Dutch employment he has lived more than 150 kilometers for the Dutch borders for at least 2/3 of the time.

Continious interim test 

Already granted 30%-rulings will remain effective, although the interim test may prevent further continuation of the 30%-ruling at a certain stage:

• Employees who on 1 January 2012 have benefitted from the 30%-ruling for 60 months or more can continue the benefit of the 30%-ruling without any further interim test;
• Employees who on or after 1 January 2012 have benefitted from the 30%-ruling for less than 60 months will be confronted with the interim test based on the adjusted conditions mentioned above;
• Employees who will benefit from the 30%-ruling as of 1 January 2012 will be confronted with a continious interim test.

For the interim test it is of importance how long the employee has already benefitted from the 30%-ruling in total and not how long the employee benefits from the 30%-ruling at the current employer.

Duration

The maximum duration of the 30%-ruling will be reduced from 10 years to 8 years for employees who will benefit from the 30%-ruling as of 1 January 2012. For employees who already benefit from the 30%-ruling on 1 January 2012 the maximum duration will remain 10 years.

The 30%-ruling will at least end when the employment in the Netherlands is terminated. As a result the 30%-ruling can no longer be applied to backpayments resulting from the Dutch employment, with the exception of payments that are already known and set on the date of termination.

Reduction rule 

The look-back period in the reduction rule is extended to all periods of previous stay that ended in the last 25 years prior to the start of the employment in the Netherlands, meaning that Dutch nationals have to reside outside the Netherlands for at least 25 years in order to become eligible for the 30%-ruling upon return. Currently this is only 10 years or 15 years in specific situations.

Change of employer

When the employee changes employer the 30%-ruling can be ‘transferred’ to the new employer, provided that between the agreement on the new employment and the termination of the previous employment no more than 3 months have passed. This changes is only a codification of already existing case law.

Closing 

The adjustments will have impacts for several groups of employees. It is advisable to investigate the consequences for your
organisation in order to undertake action in a timely manner.

Questions that need to be answered are for example: can future assignments be accelerated in order to safeguard application of the 30%-ruling under the current rules? Do you know how long your employees already benefit from the 30%-ruling, taking into account also previous employments with other employers in which the 30%-ruling was applicable? Which employees will be confronted with loss of the 30%-ruling during an interim test, as result of non-compliance to the salary norm or the fact that they resided within 150 kilometers from the Dutch borders at the start of their employment? And: what measures can you take in order to safeguard the 30%-ruling on backpayments after the termination of employment?

Source: www.exterus.nl

In case you would like to have more information on how the above influences you or your employees or in case you would like to have assistance with the inventarisation of the consequences, feel free to contact Exterus at: 070-3223136.

Living in a new country can be overwhelming at times. With so many things to arrange and new systems to figure out, the task can be daunting. Let our partners offer you a helping hand!

Getting down to business

From finding a job to buying a home and sorting out legal matters, we’ve got specialists on hand to help you. On Wednesday, 16 November, the Expatcenter will host an informative event for expats to help them get settled and reach their potential in Amsterdam. As well as providing an opportunity to network with other expats, the evening will include presentations and mini workshops by Expatcenter partners specialising in recruitment, legal matters and financial services.

Topics will include:

• How to find a job in the Netherlands
• Tips and tricks to improve your Dutch CV
• Sorting out your financial matters as an expat
• Important legal issues for international assignments

The event will be hosted by the Expatcenter in collaboration with several of the Expatcenter’s partners (see below):

• De Boer Financial Consultants
• Adams Multilingual Recruitment
• Pallas Attorneys at Law

Join in

The free event will be held at the World Trade Center in Amsterdam. We ask that all attendees register by completing the the form below. The schedule will be as follows:

• ·    17:30 – 18:00: Doors open
• ·    18:00: Welcome & introduction by the Expatcenter
• ·    18:30 – 19:30: Mini workshops (20 minutes each)
• ·    19:30 – 20:00: Drinks and networking
  ­
  ­World Trade Center Amsterdam­
  D-Tower, 12th Floor
  Strawinskylaan 1257
  1077 XX Amsterdam

The basis for the calculation of the tax to be paid is the purchase price of the property. This summer the Dutch Government decided to reduce the transfer tax from 6% to 2% for houses and apartments. This is a temporary measure extending until 1^st July of 2012. Home buyers can thus benefit from this tax reduction if property completion takes place at a Civil Law Notary’s office before this date.

Consumer confidence is currently low and people’s faith in the housing market and the economy may be even lower. A lot of people are worried about losing their jobs and this is delaying their decision concerning whether and/or when to buy a new house. Their understandable anxiety is that it might be difficult to sell their old house. This has meant that the train of buying and selling has gradually ground to a halt. The Government now wants to give the housing market a boost, since a stalled housing market has a disastrous effect on both employment and on the economy generally. Many people earn their daily living in the real estate market: real estate agents, mortgage brokers and bankers, builders, moving companies, painters, kitchen and bathroom manufacturers etc. So a boost to the housing market means a boost for the entire Dutch economy.

Although the housing market figures for this year are not yet known, banks and real estate agents are reporting an increase in sales following the reduction in transfer tax, which is good news. So has the Dutch housing market yet reached bottom and so can only move up? We have no way of knowing for sure, but if you are renting at the moment, this may be a great time to buy. The housing market seems to be recovering, interest rates are still attractively low and many sellers are highly motivated to sell at the moment.

If, as a seller, you need to move house (perhaps because of job imperatives), and are concerned about the possible difficulties in selling, you could choose to rent out your current home whilst waiting for the property market to improve (though you would need permission from your mortgage bank to do this). Clearly the last thing you want to face right now is an empty property and so having to pay two mortgages.

 But back to the transfer tax. Will it actually go back up to 6% next summer? Your guess is as good as mine…..

De Boer Financial Consultants will be present in the main hall on stand 38.

Don’t miss expatica.com’s “i am not a tourist” Expat Fair on Sunday 23 October. It’s all an expat needs to make the most of life in the Netherlands, and it’s free to join!

Whether you have lived here for days, months or years, make sure you keep Sunday, 23 October free on your calendars for this once-a-year opportunity.

“i am not a tourist” 2011 will be an interactive extravaganza of experts and companies specialising in expatriate life, workshops, networking and entertainment.

Over 100 exhibitors will be present to offer you a helping hand

Have a chat with a recruitment agent, get a word of advice on house hunting or banking, compare universities for your master’s degree, join a group or club, or just take the chance to mix with thousands of like-minded internationals.

Get invaluable information about surviving abroad

Attend seminars on landing that perfect job, taxation, setting up a business, acclimatising to a new culture or even stress resilience, and enjoy superb entertainment and networking opportunities. The programme includes workshops on writing, genever tasting and chocolate making, as well as on-stage performances and a SpeedDate. And don’t hesitate to bring your family along, as we have a dedicated kid’s corner, managed by the professional staff of GlobalParentz!

Get your FREE tickets now at: www.expatica.com/iamnotatourist.

Significant savings

Prospective homeowners had a pleasant surprise when on 1st July the transfer tax (“Stamp Duty” in the UK) on property was reduced from 6% to 2%. This reduction – a temporary measure to give the Dutch housing market a boost – is valid from 15^th June 2011, retroactively, until 1st July 2012.

This considerably cuts additional costs when buying a home so if you were to buy a property costing €250,000, you save €10,000. And if you have already bought a property recently, but the transfer is still to take place, you can use this additional money to either reduce your mortgage or to make additional improvements to the house. This was the good news, but home buyers should be aware of some other significant changes.

Changing the rules for mortgages

The not-so-good news is that per 1st August there is a new “code of conduct” for mortgages. All new mortgages will be limited to 106% of the purchase price. The buyer’s costs can still be financed and it is still possible to buy a property without any down payment. However, it is no longer possible to clear any outstanding debts (such as credit cards) with the new mortgage.

Secondly, the new mortgage code permits the bank to lend you no more than 104% of the increase in value that renovations (like a new kitchen or bathroom) bring about. The 104% doesn’t sound too bad but the following example illustrates the effects:

Property purchase price € 250,000

Buyers’ costs, 6% € 15,000

Maximum mortgage € 265,000

So far so good, no cash down payment needed. But suppose you wish to have an additional €20,000 for renovations, bringing your total need up to: €265,00 + €20,000 = €285,000 in all.

The maximum finance for the renovation is 104% of the increase in value of the property. Let’s say you get a valuation report that assesses the value of the property after renovation to be €264,000 (so an increase in value of €14,000). This brings the maximum mortgage under the new code to:

€ 250,000 x 106% = € 265,000

€   14,000 x 104% = € 14,560

Total max mortgage loan € 279,560

But the amount needed was € 285,000. The difference of  € 5,440 must therefore be paid from your own savings!

A word of advice

For homeowners who have a property to sell, note that a house that is already renovated will be easier to sell in the future due to the new mortgage code. If your prospective buyer has a choice between a fully renovated house or one that still needs a lot of work, the new rules and regulations will make the renovated house the more attractive option in many cases.

Click on the title for full article.

The advantage of renting is obviously the flexibility. How long will you stay? Do you expect to be employed in the Netherlands for a long or short period? Then, there is location to consider. It is a good idea to take some time to find out which area of the city you would prefer to live in. The locals will always know which are the better areas, but for the newcomer these are often hard to judge. Being close to schools may be an important criterion, but is this an area where you would feel at home? And if the house needs repairs or maintenance, all you need to do is phone your landlord to have the problem solved. However, there are also good reasons to consider perhaps buying your own house or apartment. When you are renting, you are effectively paying or subsidizing someone else’s mortgage. When you buy your own home, you can build up equity in it. For those who are tax payers in the Netherlands, the Dutch Fiscal Authorities contribute towards the interest payments by way of deduction allowances for mortgage interest. This can often make buying no more expensive, or maybe even cheaper, than renting. So, all well and good you might think, but are Dutch banks prepared to lend money to expats for property purchase? Actually yes, they generally are! Maybe not all banks are equally accommodating, but if you seek specialized advice from a financial advisor with a lot of expat knowledge and experience, you will find that owning your house in the Netherlands can become an affordable reality, and soon!

The municipality is the executor of the WOZ law. WOZ stands for “Waardering Onroerende Zaken” and it is best translated as “Valuation of Property”. In January or February of each year home -owners receive a new assessment of the WOZ value in their letterbox. The purpose of the WOZ law is that it forms the basis for the calculation of different municipal taxes, such as property tax, income tax and water charges. Since 2007 a WOZ value has a validity of one year. Unless, of course, you object to your evaluation.

On a national scale, the WOZ-values have dropped on average 2,3% in relation to the previous year. The actual increase or decrease of the value of a home can differ regionally. In case you are in doubt about the WOZ value of your home you may want to consider filing an objection to the new value. Obviously this only makes sense if you believe that the WOZ of your home is too high. The credit crunch started out in August 2008 with the general expectation that one should now start to see the results of the crisis in the newly adjusted WOZ values. Please remember that an objection has to be sent to your municipality within six weeks after receiving the new notification. Should the WOZ assessment be way too low, the municipality reserves the right to adjust the value.

The different taxes that are related to the WOZ value are: Property Tax (Onroerendezaakbelasting)  

This amount depends on a certain percentage of the WOZ. This percentage is determined by the municipality (and therefore differs from city to city).  

Income Tax (eigenwoningforfait)  

As far as the Tax authorities are concerned, a home-owner enjoys a fictitious income in box I. In other words, a percentage of the WOZ value (for most homes this is 0,55%) is added to your taxable income. So ,for example, if the value of your home is € 300.000, the fictitious income is 300.000 x 0,55% – € 1.650. The effect of this is that this part of your annual interest payment is not tax deductible. So if we continue with the same example, the numbers might look like this: Mortgage say € 300.000. Interest rate 5%. € 300.000 x 5% = € 15.000 – € 1.650 = € 13.350. So only € 13.350 is tax deductible instead of € 15.000. So if the WOZ value is too high in relation to the market value, it could be to your advantage to contest the value.  

Water and sewer charges

These charges are in the hands of the water and sewer authorities (Waterschap). The rate is dependent on the region in which you live, and the different tasks that this local authority has to fulfill. 

Inheritance tax  

For death duty purposes, the WOZ value is also relevant. However, death duty is a complex subject which will not be discussed in this article. 

You have now read how the WOZ value of your property affects different taxes. If you have received the new assessment, check if this is in accordance with your own view of the value of your property. Should you feel the WOZ value is not correct, you should object within six weeks. Feel free to contact us if you would like to receive an example of a letter, which you could send to your municipality. 

Most banks have been defrauded in the recent past by untraceable Expats who abscond, leaving behind them large unpaid mortgages.  For this reason many banks are cautious about lending to non-Dutch nationals. However, information and data exchange between (especially European) countries has greatly improved, and moreover the modern Expat is generally highly educated. It has therefore been possible to restore the banks’ faith in Expats, and with it their readiness to provide mortgage loans to them. Provided , of course, that their mortgage application is handled professionally. Our company is specialized in this area, and whilst not every bank is equipped to deal with international clientele, we have managed to secure special deals with several banks for the international community in the Netherlands . So European or not, indefinite contract or fixed-term,  30% ruling or tax free salaries, it is normally possible to find suitable finance for most prospective home buyers, each with their own set of circumstances.

How do you know if you qualify?

How much you can borrow depends on your income and also of the value of the property. For this reason the bank will always need a valuation report drawn up by an independent property valuator. An impartial mortgage advisor can tell you how much you will be able to borrow on your income. For this reason it is advisable to bring a recent salary slip to a meeting with such financial advisors. If you are self-employed, the bank will normally request sight of three years of annual figures and recent income tax returns.

Do you qualify for tax relief on the mortgage interest payments?

Yes, but only if you pay taxes in The Netherlands. So even if you have 30% ruling, you can still benefit from tax relief on your mortgage payments. And it is possible to receive this relief on a monthly basis, thereby reducing your monthly mortgage payments. If you do not pay Dutch taxes because your salary is paid outside The Netherlands or because you enjoy a tax free salary, you cannot claim this tax relief. However, if your partner pays taxes in The Netherlands, he or she can normally claim the full tax rebate, even if you own the property together (and in some circumstances, even if the property is in your name only).

Can you also qualify for a mortgage if you do not have an indefinite contract of employment?

In most cases, yes. Your employer will need to fill out a Statement of Employment  indicating that you will be granted an indefinite contract after the current one expires. In cases where the employer is unable to make such a declaration, it will certainly help if you can show three years of previous income. Furthermore, the banks we work with make special allowances for several international organizations for whom temporary employment contracts are standard issue,

What is the procedure to follow if you want to buy a house or an apartment in The Netherlands?

After consulting your financial advisor, you will know what your budget is. The next step is to find your dream house, generally with the help of your own real estate agent. (Since the seller’s real estate agent’s job is to represent the interests of the seller, you may wish to consider hiring your own!). Once agreement has been reached on the purchase price, a Purchase Agreement will be drawn up. In the Amsterdam region this is done at the Civil Law Notary’s office, but elsewhere in The Netherlands this is normally done by the Real Estate Agents. After signing the Purchase Agreement, you have three days to change your mind. This is the so called cooling-off period. It is also standard to have a financial contingency clause in the contract. This means that you have a couple of weeks to secure a mortgage offer from a bank. If you are unsuccessful, this means that you can still get out of the Purchase Agreement by letting the seller  (or his Agent) and the notary know in writing before this financial due date. You will need two letters from two different banks denying you the mortgage loan. Your financial advisor will also be able to help you here. In normal circumstances, though, the mortgage applicant is rewarded with a mortgage offer and the next step is then to make a deposit of 10% of the house price. This 10% needs to be transferred to the Notary’s office or (and most commonly) the mortgage bank sends a letter of guarantee to the Notary’s office for this 10%.

The final date in the Purchase Agreement is the actual date of transfer of ownership of the property. On this date you become the owner and all rights and duties related to the property will transfer to you. You will go to the Notary’s office to sign both the deed of transfer of ownership as well as the mortgage deed on this day. An interpreter is normally present if you do not have a good command of the Dutch language. The dates in a Purchase Agreement should not be set too lightly or too tightly. The advice of a real-estate agent and that of your financial advisor can save you hassle and keep you safe from legal pitfalls.