A mortgage as a director-shareholder: how your bv income is assessed
Published on 2 min read
In short
How Dutch lenders look at the income of a director and major shareholder (DGA), what role your bv plays, and how to prepare your application well.
As a director and major shareholder (in Dutch: DGA) of your own private limited company (a bv), you decide how you pay yourself: salary, dividends, or a combination. That can be tax-efficient, but it makes your mortgage application more complex. Lenders assess your income differently from that of a salaried employee.
Take the entrepreneur check and see where you standWhy a DGA is assessed differently
A salaried employee has an employer who carries the risk. You are the employer. So a lender looks not only at what you pay yourself, but also at the health of your bv. A high salary from a bv with weak figures counts for less than a modest salary from a healthy business.
It also means the assessment differs per lender. One mainly calculates with your salary, another also considers dividends and the profit reserves in your bv. Those differences are exactly why it pays to compare widely.
Salary, dividends and profit reserves
Your DGA salary is the starting point for most lenders. But many directors deliberately keep their salary low and pay out the rest as dividends, or leave the profit in the bv. How a lender deals with that varies: some count dividends if they are structural, others look at the average profit of recent years.
Profit that stays in the bv is invisible to one lender and a sign of a healthy buffer to another. So a low salary does not automatically mean a low mortgage, but it does require a lender that understands your structure.
Which documents you need
Expect to provide the annual accounts of recent years, a current profit and loss statement, your income tax return and an income statement for entrepreneurs. The latter is drawn up by an independent accounting expert and is required by many lenders.
The more complete your file, the faster the assessment. An application that stalls almost always does so on missing or contradictory figures, not on the level of your income.
Timing matters
If you have only just started your bv, there is simply little history to calculate with. Many lenders want to see at least one full financial year, and most calculate with an average over several years. A strong first year helps, but does not weigh as heavily as three stable years.
The direction of your figures counts too. A declining profit line raises questions, even if the average is still fine. Sometimes it is wiser to postpone an application for a few months until a new financial year has been completed.
What you can arrange in advance
Discuss with your accountant what your income looks like on paper before you apply. Not to present things better than they are, but to prevent a lender from misreading your figures. And have your qualifying income calculated in advance, so you know the range with which you enter the market.
A DGA mortgage is no longer an exception. But it does require an application that is right the first time, with a lender that fits your structure.