IAG Real Property Group: Questionnaire – The Netherlands
Q1. What type of ownership can I have? (e.g. of land and buildings, apartments. Whether the land and
buildings on the land have to be owned by the same party. Is title freehold or leasehold?)
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Real Estate
Real Estate (‘onroerende zaak’) is characterised as ‘immovable property’ under art. 3:3 of
the Netherlands Civil Code (hereafter ‘the Code’). Immovable property includes the land
itself, minerals not yet extracted, vegetation as well as buildings and works durably united
with the land. The transfer of immovable property must be entered in the public registers
(art. 3:89). Transfer of title to the property can only be effected by someone with the right to
dispose of it and must be based on a valid title (‘causa’) justifying the transfer (art 3:84 of
the Code). Transfers of real estate can only be done by a Dutch public notary.
Rights in the context of real estate include:
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Ownership (‘eigendom’), which is ‘the most comprehensive right which a person can
have in a thing’ (art. 5:1). Ownership implies full entitlement to the property or, put
another way, the principal right to the property. The rights of the owner may however be
restricted by third party rights or other restrictions.

Ownership of residential apartments
Proprietary rights in apartments are a special form of community property (art. 5:106).
Such rights are created by means of a Dutch notarial deed which divides the building
into self-contained properties (art. 5:109). A person with an apartment right
(‘appartementsrecht’) has a share in the real right to a building with land and accessories
and is entitled to the exclusive use of the portions of the building to which his right
applies. S/he may sell or transfer it subject to the Deed of Division and the regulations of
the Owners’Association {‘Vereniging van Eigenaren’ (VVE)}. Another form of right in
relation to apartments is a membership right (‘lidmaatschapsrecht’), which may arise in
relation to a Co-operative Flat Development Society {‘Cooperative Flatexploitatie
Vereniging’ (FEV)}. A person who becomes a member of a FEV acquires the right to live
in the dwelling and to use the common parts. However, the membership right does not
imply ownership; rather, the ownership of the real estate remains in the hands of the
FEV.
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Real rights (‘zakelijke rechten’), i.e. rights established upon things, rather than personal
rights. Examples of such rights include easements and servitudes
(‘erfdienstbaarheden’), leasehold (‘erfpacht’), and the right of superficies (‘opstal’).
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Other rights, that may be established upon things or other property, include: usufruct
(‘vruchtgebruik’) and the right of habitation (‘gebruik en bewoning’). Like the ‘real rights’
mentioned above, such rights are ‘dismembered’, meaning that they are considered to
be fragments of ownership/the principal right. This follows from the so-called ‘closed
system of real rights’ in Dutch law, which prescribes that new varieties of real rights
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cannot be created at will.
Q2. What structures are commonly used to buy or invest in real property? (e.g. property companies,
partnerships, real estate property companies, private individuals)
Real property may be owned by private individuals and by companies.
Dual ownership in the sense of division of ownership into legal and equitable ownership (as
recognised in Anglo-American jurisdictions) does not exist as a Dutch legal concept.
Nevertheless, it is possible for two or more people to co-own or have community over the same
property (i.e. to be equally entitled to it). In general, a co-owner (or partner to a community) may
claim partition of his/her share (art. 3:178). A special form of co-ownership (‘mandeligheid’)
applies where there is more than one parcel of land and property is held for common benefit (for
example, a parting wall or a parking area). Mandeligheid is regulated at art. 5:60 – art. 5.69 of
the Code.
It is possible to purchase or transfer shares in real estate entities. Such purchase or transfer
constitutes an acquisition of real estate for the purposes of Dutch Land Transfer Tax. The
transfer of such shares is subject to tax (at a rate of 6%) if the following cumulative conditions
apply (art. 4. of the Code):
 The factual purpose of the real estate entity concerns the acquisition, disposal and
exploitation of Dutch real estate or rights imposed on this real estate. If there is more
than one factual purpose Dutch Land Transfer Tax will be due if at least 70% of the
entity’s real estate is used for the aforementioned purposes at the moment of
acquisition;
 at least 70% of the entity’s assets consist of real estate in the year before the acquisition
of the shares up till and including the moment of acquisition;
 a natural person who:
1. after completion of the transaction directly or indirectly owns or will own at least
one third of the issued share capital or enlarges such participation, together with
relatives and entities connected with them according to the Dutch law and;
2. this person alone directly or indirectly owns or will own more than one third of the
issued share capital or together with his/her spouse directly or indirectly owns
more than 7% of the issued share capital or enlarges such a participation;
 a legal entity that:
after completion of the transaction directly or indirectly owns or will own at least one third of
the shares or enlarges such participation, together with entities and natural persons
connected with them according to the Dutch law.
Please note that in this context, according to Dutch law, the wording real estate is interpreted in
a broader sense than commonly used.
The sale of such shares is subject to Land Transfer Tax on the value of the underlying property
(rather than on the value of the shares).
Q3. How can I finance the purchase? (i.e. What are the most common forms of security granted over
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real property to raise finance?)
The main form of security right granted over registered property in order to raise finance is the
mortgage (“hypotheek”). This is a limited right intended to provide recourse against the property
subject thereto for a claim for payment of a sum of money, with preference over other creditors
(art. 3:227 of the Code). The security right follows a personal right (art. 3:82 of the Code). As the
security right is dependent upon the personal right, it is extinguished when the personal right
comes to an end, for example when the debt is repaid (art. 3:7 of the Code).
Q4. Are there any restrictions on foreign ownership or occupation of real property or on foreign
guarantees or security ?
There are no theoretical restrictions on foreign acquisition or occupation of real estate.
Q5. What costs are normally paid by the buyer and by the seller?
Costs of land register:
A comprehensive list of the costs of the Kadaster is published on its website
(http://www.kadaster.nl). A selection of the fees, as per January 2011, follows:
Registration of a deed relating to
the entire parcel of land:
Eur 87 – 145
Registration of a purchase contract/
deed prior to transfer:
Eur 72 - 120
Registration of creation or
assignment of mortgage:
Eur 72 – 120
Request for registration of a
division of appartment rights:
Eur 145
Extract from the land and
mortgage register, via internet:
Eur 2.95
via post, fax or in person
Eur 14.80
Extract from the cadastral map,
via internet
Eur 2.95
Via post, fax or in person:
Eur 14.80
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Residence report:
Eur 23.50
Search of easements and servitudes: Eur 125 - 235
Since the enactment of the Notarial Services Act (Wet op het Notarisambt) in 1999, controls on
notarial fees have been gradually removed. As a result, there has been increased competition
amongst notaries and considerable variations in the fees charged by different firms for notarial
services. Accordingly, it is difficult to provide an accurate estimate of the costs of notarisation.
Factors affecting the fee charged may include the time spent, the complexity of the matter and
any specialist knowledge required, the qualifications of those doing the work, the urgency of the
matter and its financial significance. There are various websites (for example
http://www.notaris.nl) via which people seeking notarial services can apply for and compare
quotes from specific notaries depending on the nature of the services sought and the desired
location of the firm. It is prudent to approach a reputable firm for a second opinion before
proceeding. Registration of the transfer deed is free of VAT. The title search is subject to VAT at
19%.
The cost of the valuation report (taxatierapport) is borne by the buyer. The cost of such a report
varies from Estate Agent to Estate Agent and may be negotiable.
Q6. What taxes are payable on the sale and purchase of real property and by whom? What are the
rates? (e.g. VAT , stamp duty, transfer tax, real estate tax?)
Land Transfer Tax: 6% of total purchase price or of the market value if higher.
VAT: Where VAT is applicable, the present rate is 19%. Registration at the Land Registry is free
of tax.
Speculation Tax (Seller): There is no Capital Gains Tax on the sale of real estate that is
privately owned and used by the owner for dwelling purposes or rented out as so-called ‘box 3’
real property without the owner becoming involved in the management of this property.
However, where the real estate is deemed to be part of a business, capital gains are taxable.
The way in which the gains are taxed and the rate applied varies according to the legal form of
business and the specific circumstances.
Q7. What are the main stages and documents in the sale and purchase of real property? (e.g. Are
there pre contractual negotiations, heads of agreement, non binding letters of intent, term sheets,
memorandum of understanding, sale contract completion/transfer? Answer in short bullet points)

Valuation report (“taxatierapport”) of the property prepared by a valuation surveyor;

Land Registry (“kadaster”) and municipal (“gemeente”) searches conducted, to establish
e.g. rights and encumbrances affecting the property and any applicable public law
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restrictions;

Survey (“bouwkundige keuring”) conducted, to assess the physical state of the property.
This is particularly prudent in relation to older properties;

Purchase agreement (“koopakte”) negotiated, drafted and signed by the buyer and
seller. A purchase agreement for the transfer of land does not need to be drawn up by a
notary (whether Dutch or foreign). However, it is wise to consult a Dutch notary for
expert guidance because the contract will be binding on the parties. Moreover, in
Amsterdam purchase agreements are often executed as notarial deeds, especially in
relation to more important properties. If so, then it would be advisable for the deed to be
notarised by a Dutch notary with relevant expertise. Often, the buyer is obliged to pay a
deposit of 10% of the purchase price or to supply a bank guarantee;

Mortgage arranged (if necessary), mortgage deed (“hypotheekakte”) signed accordingly;

Notarial deed of transfer (“akte van levering”) signed by the parties;

Documentation (including mortgage deed and deed of transfer) entered in the public
registers kept for that purpose.
Q8. When are the parties legally bound?
Once the purchase agreement (“voorlopig koopcontract”) has been signed, the buyer has three
working days within which he may withdraw from the agreement without penalty. After expiry of
this “cooling off” period, the contract becomes legally binding on both parties. Accordingly, if one
of the parties subsequently withdraws from the purchase agreement, other than on the basis of
a resolutive condition (“ontbindende voorwaarde”), legal consequences may follow, such as
(typically) a penalty of 10% of the purchase price.
Q9. When is title to the property transferred? What are the formal legal requirements? (e.g. in
writing and signed by the parties? Notarised?
The transfer of title to real estate (‘traditio’) requires:
 a valid title (‘causa’);
 a Dutch deed of transfer duly signed by the parties and notarised; and
 registration of the deed of transfer in the public registers (‘Hypotheekregister’) kept for
that purpose (art. 3:89 of the Code).
 a person who has the right to dispose of the real estate
The fact that a deed has been so registered is not a 100% guarantee that rights have been
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properly transferred, because under the so-called negative system (‘negatief stelsel’) the keeper
of the registers is obliged to register a deed even if s/he suspects that the title or transfer of title
is invalid. After registering the deed in the public registers, the keeper of these registers passes
the information on for entry in the Kadastral database.
Q10. Does the seller have any statutory or other liability to the buyer after the sale of the property?
By virtue of art. 7:17 of the Code (the so-called “conformity requirement”, in Dutch the
“conformiteitseis”), the buyer may expect that the property conforms with the purchase
agreement, thus he may expect that the property possesses the characteristics necessary for
normal use and the presence of which he should not have to question. Furthermore, he may
expect that the property has the characteristics necessary for a particular use which was
foreseen in the contract.
If the property fails to conform with the purchase agreement in that it does not possess the
characteristics that the buyer was legally entitled to expect, then the seller may be held liable. In
short, liability tends to arise in relation to “hidden defects” (“verborgen gebreken”). In
determining liability, the following matters may be relevant:
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Whether the defect hinders the “normal use” (“normaal gebruik”) of the property (for
example, a leaking roof);
Alternatively, where the defect does not hinder normal use but does hinder a particular
use (“bijzonder gebruik”) of the property, whether the property was sold with that
particular use in mind. An example would be land sold for the cultivation of vegetables
which is subsequently found to be unsuitable due to pollution of the soil.
Whether the buyer complied with the so-called “duty of inspection”
(“onderzoeksverplicht”) prior to purchase, given the reference in art 7:17 to
characteristics which the buyer should not have had to question. Thus, for example, if
there were visible signs of a leakage when the buyer visited the property prior to
purchase, he should have questioned whether the roof was defective. In order to ensure
that the duty of inspection is satisfied, it is prudent for the buyer to arrange for a survey
(“bouwkundige keuring”) to be carried out;
Whether the seller complied with his so-called “duty to inform” (“mededelingsplicht”). By
virtue of this duty, if the seller is aware of a defect which hinders the normal use of the
property, then he must inform the buyer accordingly. If he does so prior to sale, and the
buyer accepts the defect (for example by negotiating a lower price to take the defect into
account) then as a general rule the buyer cannot subsequently complain, because the
property conforms with his (revised) expectations;
The express terms of the purchase agreement signed by the parties, which may override
the statutory rules governing liability. Thus, for example, the commonly used, standard
purchase agreement drafted by the Dutch Association of Estate Agents (“NMA”)
provides that the buyer bears the risk of all defects, both visible and hidden. It does
however provide for an exception, namely that the seller guarantees that the property
possesses the characteristics necessary for normal use.
Limitation
Art 7:23 of the Code provides that the buyer should inform the seller promptly after he has or
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reasonably should have discovered the defect. Thus the buyer should, as soon as possible,
send the seller a written “notice of default” (“ingebrekestelling”) explaining the nature of the
defect and seeking rectification. If the matter cannot be resolved, legal proceedings should be
commenced within 2 years of discovery of the defect.
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