Buying a bigger house, downsizing and freeing up money, renovating, or maybe you are simply curious about what is financially possible. In any of those cases, it helps to know first how much equity there is in your current home. But when do you actually have equity? And what can you do with it when you sell? We explain it all.
What is home equity?
Home equity is the amount left over when you sell, after deducting your owner-occupied home debt and the selling costs from the sale price.
Sale price − selling costs − owner-occupied home debt = home equity
Say you sell your house for € 500,000 and still have € 300,000 of owner-occupied home debt outstanding. Leaving the selling costs aside for simplicity, you then have € 200,000 in equity. As long as you don’t sell, that value stays tied up in your house. The money only becomes available when you sell.
What can you do with your home equity?
You can use your equity to buy your next home, so you need to borrow less. You can also use the money to renovate your new house or make it more sustainable. Planning to rent first after selling? Then the equity is yours to use as you see fit. You could save it, invest it or give it away, for example. So you are not obliged to put your equity into your next home. But if you buy a new owner-occupied home within three years, that choice can affect your mortgage interest deduction. This has to do with the additional borrowing rule (bijleenregeling).
How does the additional borrowing rule (bijleenregeling) work?
Do you sell your house with equity and buy a new owner-occupied home within three years? Then the Dutch Tax Administration takes that equity into account when determining how much mortgage interest you can deduct.
A simple example:
You sell your house for € 500,000 with € 300,000 of owner-occupied home debt remaining. That gives you € 200,000 in equity, and you buy a new home for € 600,000.
- Do you use the equity for your new home? Then you borrow € 400,000 and the interest is, in principle, fully deductible.
- Do you use the equity for something else? Then you borrow € 600,000, but the interest on € 200,000 is not deductible.
Please note: This can also lower your maximum mortgage. Without interest deduction, that part of your loan weighs more heavily in the mortgage calculation, which may mean you can borrow less.
Do you pay tax on your home equity?
Home equity is not taxed as income when you sell. What you do with the money afterwards can have tax consequences, though. If the equity is in your savings account on 1 January, for example, the amount may count as assets in box 3. In 2026, the tax-free allowance is € 59,357 without a fiscal partner and € 118,714 with a fiscal partner. Want to give part of it away? Separate exemptions and rules apply. How much you can give tax-free depends, among other things, on who you give it to.
Buying first and selling later?
You find a new house while your current home has not yet been sold. The expected equity is then still tied up in your home. With a bridging loan, you can temporarily finance part of that expected equity. As soon as your old home is sold, you repay this loan. How much you can bridge varies by situation and lender, so have it calculated carefully in advance.
How much equity is in your Utrecht home?
What a home in Utrecht is worth varies by neighbourhood, street and type of property. Maintenance, the energy label, outdoor space and recent sales in the area also play a role. That is why, when we value a home, we look at both your property and recent sales nearby. This gives you a realistic picture of what your house is worth right now and how much equity it may hold.
Curious how much equity your home might hold? We will happily come by, with no obligation, for a realistic valuation.
