Monday, February 14, 2011

Today was a big day. I went to the bank to open a Dutch bank account. I went to the national registry and got a stamp into my passport, formally registering me as a citizen of the European Union. In the bank I found out that mortgage loans are usually maximum 5 times the yearly salary, before taxes. I guess I won't be buying that 590,000 Euro house I was dreaming about. In fact I'll need the 30% ruling (tax discount for foreign specialists that my employer has applied for for me) to be able to buy the smallish (just under 100 m2) apartment I'm most interested in at the moment.
Apparently I need to get insured here for damages I may cause others. The bank advised me to insure for up to 1.2 million Euro payout for 3 Euros a month. I was told that in the event of property damage it would never be that high but if I caused an accident and someone would need to go hospital the bills would pile up quickly. Iceland of course has "free" health-care for "Icelandic citizens", others are tourists anyway and need to insure their own bottoms. This health-care cost is included in car insurances here. Which makes me wonder, yet again, why it is so much more expensive to insure cars in Iceland than in Europe.
The 30% percent ruling, that my employer has applied for, for me, is a way for The Netherlands authorities to attract specialists to The Netherlands. What it basically means is that if granted, the employer takes 30% off of the salary before applying taxes and other reductions. Usually the employer pays the employee these 30% directly, but there are exceptions. This discount is valid for up to 10 years but tax authorities can ask for proof of "specialty" annually. Another upside of this system is that the employee may "fall into a lower taxbracket". Since maximum taxes in The Netherlands are over 50% this can be profitable. Accoording to one of my coworkers, who has the 30% ruling applied to him, tax discount because of interests on mortgage payments is applied before the 30% ruling. About the only downside of this system, for the employee, is that his pension, which is percentage of his salary, will be 30% lower.

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