Equity is money that sits in the bricks of your home. So you can’t just access it, because it’s only published when the house is sold. Nevertheless, it is possible to withdraw the equity earlier without selling the house. There are three options for this:

  1. Increase your mortgage or take out a mortgage with repayment
  2. Take out a mortgage
  3. Sell ​​your house, or just the land, and re-let it

If you choose to sell the house, you can do whatever you want with it excess value if you don’t buy a new house within 3 years. If you do, you will have to contend with the Tax Authority’s Supplementary Loan Scheme.

What is possible to help your (grand)children?

1. Withdraw the capital gain for a donation (excluding taxes)

In 2022 you can still donate a maximum of 106,671 (jubel) excluding tax for owner-occupied housing to people up to the age of 40, in 2023 it will still be €27,231 and in 2024 this exemption will expire completely. After that, taxes must be paid. A family link is not mandatory.

2. Added value for a family mortgage

If you want to use the added value to support your (grand)children financially, you can borrow an additional amount from your home yourself. You can then lend this amount, which you receive from your bank, to your children.

What about the mortgage interest deduction and a family mortgage?

The use of Mortgage Interest Relief is possible when the interest is not much lower or higher than what a bank would charge for the same loan. The loan that the child has with the parents must therefore be comparable in terms of duration and interest to a loan from the bank. If the loan meets this condition and the other condition for the mortgage interest deduction, the child can deduct the mortgage interest on the tax return.

3. Warranty

This means that your parents, but they can also be other family members (such as a grandfather, brother or niece), also sign the mortgage deed. They also assume joint and several liability for the mortgage. If you are no longer able to pay your mortgage in the future, the bank will call on this person. There are two options here:

  1. Your parents/other family members sign for the mortgage portion that you cannot afford based on your income. They are responsible for this part of the mortgage if you have any problems with paying the mortgage payments. You are still responsible for the other party.
  2. The second option is for your parents to guarantee the entire mortgage. It also means that they have to pay the full monthly fee if you are no longer able to do so.

4. Buy a house for your child

Finally, as a parent, it is also possible to buy a house (second mortgage) and rent it to your child. A rental contract can be drawn up for this purpose for a certain period. For independent houses (own entrance and own kitchen and toilets) this is allowed for a maximum of 2 years. For non-self-contained dwellings (bedrooms), this is permitted for a maximum of five years.