The 30% Ruling (Expat Scheme) and Mortgages

The expat scheme stays at 30% through 2026 and drops to 27% on 1 January 2027, with transitional rights for anyone who held it in December 2023. What lenders do with the tax-free portion, and why the five-year limit matters more than the percentage.

The scheme once universally called the 30%-regeling is now formally the expat scheme (expatregeling). It lets employers pay part of the salary of an employee recruited from abroad as a tax-free allowance, on the reasoning that living abroad costs money.

It matters for a mortgage in two opposite directions: it raises your net income now, and it guarantees your net income will fall later. Lenders think about both.

Where the scheme stands

The rules have been changed, then changed back, more than once — so a great deal of the advice online describes a version that no longer applies. As things stand:

An earlier plan to taper the benefit in steps of 30/20/10 across the five years was scrapped before it took full effect. If you read that somewhere, it is out of date.

There is also a salary condition, indexed each year. For 2026 it is €48,013 in taxable salary, or €36,497 for employees under 30 holding a qualifying master's degree. Both thresholds rise again in 2027; check the current year's figure rather than relying on a number in an article, including this one.

What lenders do with it

Dutch mortgage capacity is calculated on gross income, and the tax-free allowance is part of your gross salary. Most lenders therefore include your full gross salary in the calculation, the tax-free portion included.

That is the general rule, and it is worth confirming rather than assuming, because lenders differ. Some apply a more cautious treatment when the scheme has only a short time left to run, on the basis that your net position will change materially before the mortgage is halfway through its first fixed-rate period.

This is precisely the sort of question to put to an advisor early, because the answer varies by lender and can move your maximum by a meaningful amount. See How Much Can You Borrow? for how the rest of the calculation works.

The five-year cliff is the real issue

The percentage change from 30% to 27% is a modest adjustment. The five-year limit is not.

When the scheme ends, your gross salary does not change but your net pay drops — and it drops on a date you already know. A mortgage is a thirty-year commitment; the scheme covers the first five years of it. If your monthly budget only works while the allowance is running, you do not have an affordable mortgage, you have a five-year runway.

Do the arithmetic on your post-scheme net income before you decide what to bid, not after. If the payment still works without the allowance, the allowance becomes a genuine advantage rather than a dependency.

Why your tax relief is worth less

There is a second-order effect worth understanding. Mortgage interest relief is applied against your taxable income at your marginal rate. The expat scheme lowers your taxable income — which can also lower the rate at which the relief is granted.

So two colleagues on identical gross salaries, one with the scheme and one without, do not get the same benefit from the same mortgage. The one with the scheme takes home more overall, but gets less back from the interest deduction.

What to do with the extra money

The higher net income is real, and it is temporary. Three sensible uses, roughly in order:

That last point is why an annuity mortgage often suits scheme holders better than a linear one: it keeps the obligation low and leaves you the choice of overpaying while the allowance lasts.

Check your own dates

Your decision letter (beschikking) states the exact end date of your entitlement. Get that date, work out what your net income becomes the month after it, and build your budget on that figure. Your HR department or a tax advisor can confirm whether you fall under the transitional rules.

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