The 10% penalty when buying a house in the Netherlands

When you buy a home in the Netherlands, you are required to provide a deposit — usually 10% of the purchase price. If the deal falls through and you cannot invoke a valid resolutive condition, the seller can claim this amount as a penalty. This article explains when the penalty applies, how much it could cost you, and what you can do to protect yourself.

This article is written by Toni, our mortgage advisor at OHAO, who helps expats and internationals navigate the Dutch mortgage and housing market. Below, you will find a clear breakdown of the 10% deposit, when you risk losing it, and 4 practical ways to avoid the penalty.

What is the 10% deposit?

When you sign a purchase agreement (koopovereenkomst) in the Netherlands, the seller requires a deposit — called the waarborgsom. This deposit is typically 10% of the purchase price. According to the Royal Dutch Association of Civil-law Notaries, this penalty is almost always set at 10% of the purchase price in the standard purchase agreement.

The deposit is not an extra cost on top of the purchase price. It is an advance payment that gets settled at the notary when the property is transferred. You can either transfer the money yourself to the notary's account, or arrange a bank guarantee through your mortgage advisor.

For example, if you buy a home for €400,000, the required deposit is €40,000. If you use a bank guarantee instead of transferring the cash, the guarantee typically costs around 1% of the deposit — in this case approximately €400.

When can the seller claim the 10% penalty?

The seller can claim the 10% penalty when you fail to complete the purchase without a valid legal reason. In practice, this usually happens in one of two situations.

Your mortgage is rejected and you have no financing clause

If you bid without a financing clause and your mortgage is later rejected, you have no legal basis to cancel the purchase. The seller can then claim the full 10% as a penalty. You must pay this from your own savings — it cannot be included in a mortgage.

You miss the financing clause deadline

Even if you included a financial clause in your purchase agreement, you must invoke it before the agreed deadline — usually 3 to 6 weeks after signing. If you miss this deadline or cannot provide the required proof (typically one or two rejection letters from lenders), the clause expires and the seller can still claim the penalty.

You withdraw after the cooling-off period without valid grounds

After signing the purchase agreement, Dutch law gives you a 3-day cooling-off period (bedenktijd) during which you can withdraw for any reason. After those 3 days, the agreement is binding. If you cancel without invoking a valid resolutive condition — such as the financing clause or a building inspection clause — the seller has the right to claim the 10%.

How much could the 10% penalty cost you?

The amounts are significant. Here is what the penalty looks like at different purchase prices:

Table: the 10% deposit penalty at different property prices in the Netherlands, with indicative bank guarantee costs. This is for illustrative purposes only.

For most buyers — especially expats who may have recently moved to the Netherlands — losing €35,000 to €55,000 is a serious financial blow. This is why understanding your protection options before you bid is very important.

4 ways to avoid the 10% penalty

1. Include a financing clause in your purchase agreement

The most common way to protect yourself is to include a financing clause (voorbehoud van financiering) in the purchase agreement. This gives you a set period to arrange your mortgage. If the mortgage is rejected, you can cancel the purchase without penalty — as long as you provide the required rejection letters before the deadline.

The downside is that this clause makes your offer less attractive to sellers, especially in competitive markets. For a full overview of the pros and cons, read our guide on the financial clause when buying a home.

2. Get bid insurance

Bid insurance allows you to drop the financing clause — making your offer more attractive — while still being protected. If your mortgage is rejected, the insurance covers the 10% penalty. You owe nothing.

The certificate is issued within one business day, is valid for 40 days, and you only pay the fee when the deal closes at the notary. This is the best option for buyers who want a competitive offer without the financial risk.

3. Pay the deposit from your own savings

If you have enough savings to cover the 10% deposit yourself, you can transfer the amount directly to the notary. This eliminates the need for a bank guarantee and shows the seller you are financially committed. The deposit is returned to you at closing — it is settled against the purchase price.

However, this does not protect you from losing the deposit if the deal falls through without a valid resolutive condition. It simply means the money is already with the notary. If you also bid without a financing clause, this €40,000+ is genuinely at risk.

4. Get a thorough financial assessment before bidding

Before you start bidding on a house in the Netherlands, have your mortgage advisor review your full financial situation. This includes your income, debts, borrowing capacity, BKR (Bureau Krediet Registratie) registration, and any factors that could affect approval — such as the 30% ruling or a non-EU residence permit.

The better prepared you are, the lower the risk of a surprise rejection. A good independent mortgage advisor will flag potential issues before you commit to a purchase.

What happens to the deposit if the sale goes through?

If the purchase is completed successfully, the deposit is settled at the notary on the day of transfer.

If you paid the deposit yourself, it is returned to you through the notary's settlement. If you used a bank guarantee, the guarantee simply expires after the transfer is completed. Either way, the deposit only becomes a penalty if the deal falls through without valid grounds.

Keep in mind that every situation is different. The examples in this article are for illustration purposes only. For advice tailored to your personal situation, contact our mortgage advisors.

Frequently asked questions by expats

What if I use a bank guarantee and the deal falls through?

If you have a valid financing clause and the mortgage is rejected, the bank guarantee is cancelled and you owe nothing. If the deal falls through without a valid reason, the bank pays the seller the 10% on your behalf — and you must repay the bank.

Can expats get a bank guarantee in the Netherlands?

Yes. Your mortgage advisor can arrange a bank guarantee as part of the mortgage process. The cost is typically around 1% of the deposit amount. Read more about how a bank guarantee works.

How does bid insurance protect me from the penalty?

With bid insurance, you bid without a financing clause while the 10% penalty is covered if your mortgage is rejected. You only pay the insurance fee when the deal closes at the notary. If your bid is not accepted or your mortgage falls through, you pay nothing.

Do you have question about a 10% deposit or a bank guarantee?

Book a free, no-obligation call with one of our mortgage advisors. We will review your financial situation, explain your protection options, and help you bid with confidence. We work with all the major Dutch banks and over 40 mortgage lenders — so you always get independent advice tailored to your situation.