Buying a house with the help of your parents?
Nowadays, it can be quite challenging to buy a house as a first-time buyer.
There are more regulations than before, and you are often required to bring in your own savings. This can be difficult if you’re still studying or have just started working and haven’t been able to build up any assets yet.
It might, therefore, be helpful to involve your parents in purchasing your (first) home.
This way, you can still find your own place where you can enjoy yourself and feel at home.
But how do you go about doing that? And what are the conditions and options available?
We’ve laid everything out for you as clearly as possible, so you can look together and see if this could be an option for you.
Here are some possibilities:
Annual gift
Your parents are allowed to give you a tax-free gift each year. In 2024, this amount is set at €6,633 per child.
One-time gift
Your parents can also make a one-time larger tax-free gift to their children. You can use this amount for a house, education, or something else. However, you or your partner must be between 18 and 40 years old. The day of the 40th birthday is still included.
The amount depends on the situation:
- The amount is €31,813 (in 2024), which your child can spend freely.
- Or the amount is €66,268 (in 2024) for an expensive study.
The so-called “jubelton” (tax-free gift of €100,000) no longer exists. You can only use the amounts listed above. The one-time exemption replaces the annual exemption. In the year of the one-time gift, you cannot also receive the annual gift tax-free.
Using home equity
Do your parents have equity in their home and room to borrow?
They can take out a mortgage and lend or gift that amount to you.
Do they already have a mortgage? They can refinance and increase it.
If they want to use the equity to help you, they must first take out a new mortgage. They will have to pay advisory and notary fees for this.
Joint liability
If you currently don’t have enough income to buy a house, your parents can also sign for (part of) the mortgage debt. They will then be jointly liable for your debt. If you can’t pay the mortgage anymore, the bank will turn to your parents to collect the mortgage payments.
Please note! Keep in mind that you must demonstrate that your income will be sufficient to cover the mortgage in the future. For example, because you’ll pay off a debt in a few years.
Here are some key points about joint liability:
- You are the one using the mortgage.
- Your parents are not guarantors or fallback.
- The bank can always ask your parents to pay the monthly mortgage payments.
- The bank can also ask your parents to pay the entire debt for which they are co-debtors.
- When calculating the mortgage, the bank will consider your parents’ income.
- Your parents’ income must be high enough to cover both their own mortgage and yours.
- Your information will also be checked by the Credit Registration Bureau (BKR)
Private loan
Do your parents have money they can spare? Then they can consider lending you money for the purchase, renovation, or maintenance of a home.
You would agree on a market-based interest rate. Under certain conditions, you can deduct the mortgage interest in your tax return. The loan must be repaid within 30 years, either in a linear or annuity payment plan.
Keep these points in mind:
If you borrow money from your parents, it must be on business terms.
This applies to all terms, such as paying a market-based interest rate.
It’s essential to make clear agreements and preferably document them with a notary to avoid misunderstandings or disputes.
Renting a house
If your parents have the financial means, they could also buy a house themselves and rent it to you.
For this, they would need to take out a special type of mortgage, such as a rental mortgage. Rental income does not need to be declared to the tax authorities.
However, there are special rules for a permanently rented property, including limits on the amount of rent they can charge.
As mentioned above, there are several ways your parents can help you with your own home. A financial expert can assist in finding the best options for your situation.
Do you want to know what’s possible for you and your children, and how Nobel Hypotheken can help with buying a house? Keep reading.
Nobel Mortgages
We are happy to help by providing high-quality financial advice and will work with you to explore all possible options.
We always go the extra mile for our (potential) clients, truly analyze all possibilities and, when necessary, always think outside the box. In this way, we ensure that we can achieve what others cannot.
In other words, we are fully dedicated to helping you obtain the best mortgage or loan that suits you perfectly and, of course, aligns completely with your situation and preferences.
Do you also want an advisor who looks outside the box and really analyzes all the possibilities for you? Then contact our experienced and enthusiastic team soon.
We are available to you 24 hours a day with the utmost commitment and sincere attention. An e-mail is a snap to info@nobelhypotheken.nl or call or app to 06-54770122.
Relevant information
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