The entrepreneur purchasing a home is a topic not being easy from loan or mortgage point of view. You need the experts and not all experts work with the bank only.
Entrepreneur purchasing a home – who is an entrepreneur?
The entrepreneur is a person that earns an income or a result not being paid by a person or organization to which you can refer as employer.
Often an entrepreneur is referred to ZZP or freelancer. The company can be a transparent so called one man company (eenmanszaak). The company can be a limited liability being the BV company.
Where is the entrepreneur taxed?
The main rule is that in the country where the income is being generated, the income is taxed. Rather simple, but for some still confusing.
For instance, you work as consultant for a Dutch company. You have registered your company at the Dutch Chamber of Commerce and you pay Dutch taxes.
Some have still a running company in the United States or United Kingdom for instance. The client base is in the USA and or United Kingdom. The entrepreneur is operating the company from the Netherlands. Unless a director is locally appointed that is fully authorized, the company is taxed in the Netherlands.
Do you want to be taxed in the Netherlands?
If you arrive from for instance the USA or United Kingdom, or many other countries in the world where the tax rates are much lower, you prefer not to be taxed in the Netherlands.
The Dutch Government tries to assist the entrepreneurs by offering tax benefits:
- Starting entrepreneurs discount
- Entrepreneurs discount
- Small business discount
- 30% ruling
The tax credits mentioned above do help. Still you want to be taxed in the Netherlands, as the Dutch system is based on social collaboration. Part of the tax being paid is for the social system, like the health care system and the old age pension. If you work and live in the Netherlands, you are socially insured in the Netherlands.
Other aspects of you wanting to be taxed in the Netherlands is that this opens for you services like taking out a loan, leasing a car, renting a place.
Can the entrepreneur qualify for a loan to purchase a home?
Now I enter the territory of the financial experts, like Wouter Hofstee Holtrop working for Expat Mortgages. I might be corrected by Wouter, but yes the entrepreneur can qualify for a home owner loan.
My experience, being an entrepreneur myself, learned me that I had to go through 19 forms to apply for my mortgage many years ago. Then the bank noticed that I had double green ranking. That means I have not had on my personal bank accounts a negative balance, nor did I fail on any other financial loan obligation. Instantly 17 forms disappeared. This is my experience.
Wouter might laugh at my experience as times have moved on, but in the Netherlands you can only spoil your financial ranking as international. You arrived from abroad for the first time in the Netherlands and your financial ranking is sublime. The Dutch system is not based on building credit. Wouter can explain. Now the entrepreneur needs to proof his or her result can achieve a loan amount enabling the purchase of a home.
Does the entrepreneur purchase the house privately or via the business?
This is an often asked question as in some countries owning the home business wise is financially interesting. In the Netherlands this is not the case. Right now we have a rather booming housing market, and basically history shows it nearly always has been like this. Simply hold on long enough to the house and you make a capital gain. We do not tax capital gains in the Netherlands. That is the reason not to purchase the house business wise.
The other reason is the loan capability. A bank is willing to loan more and under better conditions to you in person, than to your company. That is the second no to this question.
Tax is exciting
We think tax is exciting. Wouter thinks mortgages for entrepreneurs are exciting. Wouter is known by me for many years as we are part of the Expat Housing Seminar. This is hosted currently by IamExpat and the partners are Expat Mortgages, Mie-lan Kok Real Estate agents, Buma Algera notaries and Orange Tax (us).
Therefore I support Wouter as an excellent mortgage entrepreneur for entrepreneurs. Wouter vividly likes to hold your hand through the process for the ultimate joy: the mortgage being the road to your home.