The 30% Ruling and Your Mortgage in the Netherlands

The 30% Ruling and Your Mortgage in the Netherlands

If you’re a highly skilled migrant in the Netherlands, the 30% ruling can significantly increase your net income. But how does this tax advantage affect your mortgage options? And what happens when the ruling ends or changes?

Many expats assume the 30% ruling only affects their income tax. In practice, it also plays a role in how lenders assess your situation. Let’s take a closer look at how this tax benefit influences your mortgage options and your maximum borrowing capacity in the Netherlands.

How does the 30% ruling work?

The 30% ruling is a tax benefit that allows eligible employees to receive 30% of their gross salary tax-free. The idea is to compensate for the extra costs of living and working abroad.

For mortgage purposes, this means:

• Your net income is higher than your gross salary would normally suggest
• Lenders may use a higher effective income when calculating your borrowing capacity
• Whether and how lenders include the tax-free portion depends on the lender’s specific policy.

What income will lenders take into account?

The 30% ruling can impact how much you can borrow. While it provides a tax advantage, not all lenders treat the ruling in the same way.

Some lender:

• Count your gross salary
• Partially include the tax benefit
• Adjust the gross salary to provide a benefit in line with the tax ruling

This directly affects your maximum mortgage amount. This ties closely into the basic principles for a mortgage for an expat and why long-term planning matters.

What is the effect of the 30% ruling on mortgages in the Netherlands?

Some lenders calculate your mortgage based on your gross salary including the ruling benefit, which can increase your maximum borrowing amount substantially.

However, this depends on the lender’s policy. If the lender provides a benefit, the duration of the benefit is equivalent to the duration of the 30% tax ruling.

The effect of the 30% ruling will therefore be different depending on the lender that you use. This is why understanding How to Get a Mortgage as an expat is so important — the outcome can differ significantly per lender.

What happens when the 30% ruling ends?

When the ruling expires, your net income drops, which affects your maximum borrowing capacity and monthly affordability.

This is why lenders look at:

• How long your ruling will still apply
• Whether your salary is expected to increase
• Whether the mortgage remains affordable without the tax benefit

These factors are taken into account when you apply for your initial mortgage, which makes the structuring of your mortgage extremely important. If you are preparing to apply, getting a mortgage pre-approval is a good first step to understand what you can borrow before the ruling ends. This is exactly where professional guidance from a mortgage advisor becomes crucial.

Key takeaways for expats

• The 30% ruling can increase borrowing power
• Lenders differ in how they treat the tax benefit
• Future income without the ruling always matters
• Planning ahead prevents surprises

Understanding the interaction between tax benefits and mortgage rules helps you make informed, sustainable decisions about your expat mortgage requirements. For a full overview of getting a mortgage as an expat in the Netherlands, our complete guide covers everything you need to know.

Do you have any questions or is anything unclear? Feel free to contact me via the website.