You get a mortgage for €400,000 to buy land and build a house. But the builder does not need all €400,000 on day one: construction happens in stages over 12 months. The bouwdepot holds the unused portion and releases it in instalments as invoices come in.
During construction, you pay full mortgage interest on €400,000 but the portion sitting in the bouwdepot earns interest (typically the same rate as your mortgage). This netting effect means you effectively pay interest only on the money actually drawn and deployed.
How it works step by step
- Mortgage of €400,000 approved for new-build or major renovation
- €400,000 placed into bouwdepot on day one
- Builder sends invoice for foundation work (€80,000): released from depot
- Builder sends next invoice (€60,000): released from depot
- This continues until construction is complete and depot is empty
- Throughout: depot balance earns interest offsetting your mortgage cost
The tax treatment
Mortgage interest on the bouwdepot balance is deductible in Box 1 (hypotheekrenteaftrek). The interest EARNED on the depot balance is also declared. The net effect is typically neutral or slightly positive during construction.
The 2-year rule
A bouwdepot must be used within 2 years of the mortgage start date. If construction takes longer, the remaining depot balance converts to regular mortgage principal. Extensions are possible but require lender approval.
Why this concept is Dutch-specific
Most countries simply release mortgage funds at settlement. The Dutch system of staged release reflects the prevalence of custom-built housing (kavel + nieuwbouw) and extensive renovation culture. About 15% of Dutch mortgages include a bouwdepot.
