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Insufficient funds to purchase a home – what to do?


Insufficient funds to purchase a home, what can you do. Can you do anything? That depends on your family situation.

Insufficient funds to purchase a home

The housing market is not booming anymore, neither have the prices really gone down. Many reasons for that among which is inflation. Inflation makes the gross national product go up, which influences property values.

The Dutch that are no longer young probably already owned their home, sell it at a premium and invest that in the next home. You are probably the persons they would like to sell to. What if you do not have enough funds?


The first step that you need to take is visit a, preferably, independent mortgage advisor. It is not a free service, but does bring you a lot of value. At the end of the process you are aware what you can loan and which costs you cannot take out a loan for.

Example. You would like to purchase the EUR 400.000 house. That amount you can get a mortgage for. However, on top of that amount come the KK costs, approximately 6% to 8%, that amount you cannot take a mortgage for. Even though 8% of EUR 400.000 is already a mortgage able amount in my opinion.

Family loan

The next step is to discuss in the family your financial position, if you know that has any use. If your family has the same financial situation as you have, there is little use, but if it is better, have a talk. A very uncomfortable talk it probably is for you, we need money. And for your family, they need money.

The rule is that a loan taken out to purchase the house being your main residence, for that loan you can deduct the costs. It does not state a mortgage, it states a loan. This implies you can agree upon a family loan that can qualify for a tax deduction.

Two criteria you need to meet:

  1. The family loan needs to be repaid in periodic (monthly or calendar year basis) in a period not longer than 30 years.
  2. The interest needs to actually be paid

The court ruled that a family does not need to make the same profit as a bank. This implies that if a bank charges 4,5% interest, you could agree on for instance 3,5% interest. This is an example.

Insufficient funds to purchase a home – what to do?

A gift

Sometimes you can be lucky in receiving a gift. I find a gift from your parents always a bit triggy when you are not the only child. There is nearly no inheritance where there is no fight between the children about money. A fair gift is maybe the better wording.

If you are so lucky to receive a fair gift, then the rule is that the gift is taxed in the country where the person giving is living. To avoid roughly 40% Dutch gift tax the person giving needs to meet two criteria besides being a tax resident abroad:

  1. The person has left the Netherlands as a Dutch tax resident longer than a year or was never a tax resident in the Netherlands;
  2. If the person that left the Netherlands as a Dutch tax resident had the Dutch nationality, only after a ten year period the gift made abroad is no longer subject to Dutch gift tax

The next step is proving to the Notary who is in charge of the transfer of the property that the origin of the gift was a legal origin. In other words, the notary would like to know and document how the person giving obtained the money in the first place. That is in line with the anti-money laundering anti-terrorism act. If you do get a gift, get well in time with the notary to address this topic. As a buyer you chose the notary, hence you can prepare in advance as well.

The real estate agent

You read the above, you applied the above hence you have a mortgage possibility with a Dutch mortgage provider, the family loans you money and you are to get a gift. The aim is to purchase a Dutch home and I think that is a good investment.

The real estate agent first needs to secure the purchase for you. It is important to share your financial cocktail with the real estate agent, as then the agent can adjust their offer to a better presentable one for the seller. If the seller has a choice to whom to sell, the preferred person is the one that is most likely to actually secure the purchase.

Tax is exciting

We think tax is exciting. If you read the above, purchasing a home is as much exciting!! Bottom-line of the above is to prepare yourself well before you start looking at Funda. Funda is the website where most houses are shown for sale. How much you can spend, and the costs involved influence in which category of purchase value you can search.



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