When purchasing or selling property in the Netherlands, you will be required to comply with the legal obligations surrounding anti-money laundering (AML) regulations. This involves verifying the origin of the funds used for the transaction.

Why is this investigation necessary?

As part of anti-money laundering laws, there is a legal obligation to ensure that funds involved in property transactions come from legitimate sources. This is aimed at preventing money laundering and the financing of terrorism. Therefore, it is necessary to verify the origin of funds, such as the purchase price or deposit. If the funds are transferred into a third-party trust account, the origin must be explained. This ensures the transaction complies with legal requirements and safeguards against illegal activities.

How does this investigation work?

To meet these requirements, you will be asked to provide detailed information about the source of the funds being used. The verification process often involves filling out a form where you specify the origin of the funds, which may include:

• Savings: If the funds come from your personal savings, you may need to provide a bank statement showing at least six months of history.
• Gifts or inheritance: If the funds are from a gift or inheritance, you will need to provide documentation showing the transfer of these funds into your account.
• Loans: If the money comes from a loan, whether from family or a company, you must submit the loan agreement.
• Proceeds from a previous sale: If the funds come from selling a property, a settlement statement from that transaction is required.

The duty to investigate applies to both the buyer and the seller. If a portion or all of the purchase price comes from a bank as a mortgage, further investigation is not usually required for that portion of the funds.

What happens if there is no clear explanation?

If a reasonable and clear explanation for the source of funds is not provided, the transaction cannot move forward. In such cases, a report must be filed with the Financial Intelligence Unit (FIU) in the Netherlands, and the transaction may be blocked.

Providing this information well in advance ensures that the process runs smoothly and avoids any delays on the day of signing.