This is in fact a completely legitimate photo. It is from Baarle-Nassau where the borders get really funky.
Indeed, the one house you are looking it is just one of many, though it is probably the most famous. The exact address is Loveren 19, Baarle-Nassau 5111, The Netherlands.
In a situation similar to that along, say, the India-Bangledeshi border, the actual settlement patterns predate the national boundaries around them. Treaties in the 1830s followed by the dissolution of the Spanish Netherlands into Belgium and the Netherlands led to this odd situation. Treaties in the 1830s "clarified" the situation, but resulted in the pattern you see. The various enclaves even go through buildings in some instances.
Because everything is within the Schengen area, however, it presents no more difficulty than, say, borders that go through buildings in two states (e.g. Myock, NC) within the United States, or even in buildings that straddle the Canadian border. (e.g. the "Cross-Border Library" in Derby Line, VT / Rock Island Quebec.)
Note: this video has pictures and more information.