If you stay outside the Netherlands for more than 8 months within a year, you are required to deregister from the Netherlands. You do this at your municipality and can do so from 1 to 5 days before departure. Deregistration and emigration can have financial consequences, which we describe in this blog.
Once you’ve deregistered, quite a few things change. Let’s start with your banking matters.
Loans and Credits.
When you deregister from the Netherlands, as a rule, outstanding loans become due. So if you have a revolving credit, an overdraft on your current account? The bank will often demand repayment when you emigrate. Often, arrangements can be made regarding keeping your credit card.
If you still need a banking product, arrange this before departure. It’s often the case that banks don’t offer additional banking products to non-residents.
In summary: talk to your bank in time to avoid surprises!
The Mortgage and the House.
It’s advisable to think carefully about the mortgage and your own home if you’re (temporarily) not living in your own home.
It’s logical that you don’t want to put the house up for sale immediately and that you might want to get used to a place for 2 years before taking this step.
Be aware that your home moves from box 1 to box 3 once you’ve deregistered. In other words, you’re no longer entitled to mortgage interest deduction. Your housing costs will therefore increase, and then you might also have housing costs abroad….
So, rent it out?
If you want to do this, inform your bank first. The bank won’t just agree to renting out. Your mortgage deed or mortgage conditions will probably also state that renting out is not allowed without the bank’s permission. Don’t do this without permission; the consequence is that the bank may immediately demand repayment of the mortgage loan and it can also have consequences for your National Mortgage Guarantee (NHG).
A basic rule is often that the maximum mortgage amount may not be higher than 70% of the market value of the house. The bank will request a valuation report from you to demonstrate this. The bank often charges an interest surcharge for renting out. Requesting permission for renting out can be time-consuming and usually happens through a personal appointment at the bank branch. A request for permission is no guarantee that the bank will give you permission.
We recommend never drafting a rental contract yourself in any case, but having this done by a certified (rental) estate agent. Renting out is legally more complex than it seems and a tenant is legally very well protected. A legally correct rental contract where your rights are also well protected is invaluable, especially if you want to return to your own house.
In short, there’s quite a lot involved in renting out the house, so start well in advance! Our advice is at least 3 months before departure.
Pension
Are you accruing AOW and pension?
The accrual of AOW stops when you’ve deregistered. You accrue 2% of your future AOW each year. In other words, if you stay outside the Netherlands, you accrue a 2% reduction each year. The good news is that you can voluntarily insure for this.
If you leave your employer’s service, the accrual of your retirement pension also logically stops.
What is your pension worth at the moment you stop accruing? You can see this on the website www.mijnpensioenoverzicht.nl
Do you save or invest in an annuity insurance or bank savings account? Further accrual is no longer possible if you are no longer tax liable here, because your contribution was tax deductible. Just like your mortgage interest deduction, this deduction also lapses. The tax authorities impose a so-called conservatory assessment on the balance in the annuity insurance or bank savings account at the time of emigration. They do this to avoid missing out on tax collection. You don’t have to pay the assessment (immediately). Check the tax authorities’ website to see if you automatically get a 10-year deferment of payment or if you need to submit a request for this yourself. After these 10 years, the conservatory assessment lapses on request. You must then meet some conditions of the tax authorities. Your insurer, bank or the Tax Authorities themselves can inform you about this.
Insurances
As a rule, your health insurance does not cover you abroad and most travel insurances do not cover stays longer than 3 months, sometimes an extension to 6 months is possible. Always ask if there is also coverage in work situations.
In some countries, if you register at your new place of residence, you are automatically insured for health costs or it’s part of your employment contract. It’s not everywhere in Europe that you are obliged to take out health insurance as you are in the Netherlands. That’s good news, but it’s good to research this in advance. Of course, a EURES advisor can tell you more about this.
Is there no public healthcare system that you can use (for free) or do you prefer non-public care? Then it’s advisable to take out health insurance in advance that provides coverage abroad.
You often can’t take out life insurance such as funeral insurance or term life insurance in the Netherlands anymore if you’ve already emigrated. Not the first thing you think about of course, but good to consider. Of course, you can usually also take out funeral insurance in another country, but that usually doesn’t ensure that a funeral can take place in the Netherlands.
As a rule, existing policies do cover you abroad, as long as you’re not staying in a war zone. Of course, we don’t know the conditions of all insurances, so check your conditions well before departure or contact your insurer.
In summary, there’s quite a lot to consider financially when emigrating. We hope this article provides you with a first handle.
Do you want to know more about working and living in another European country and what this means for you? We’d love to hear from you! Contact us via werken.ineuropa@uwv.nl and we’ll get in touch with you.
Disclaimer: we are not financial or tax advisors. This article is merely informative and serves as an aid in preparing for emigration and is by no means intended as financial advice. The article is not exhaustive and subject to changes in laws and regulations. Date of writing: 17-1-23.