Lawmakers have made several additions to Dutch rental law since 2014. If you’re a Dutch landlord or you’re considering investing in the dutch housing market – one of the fastest moving in Europe – we’ve condensed and simplified the essential information. The Dutch housing market reached a low in 2013 due to the recent recession but it’s starting to gradually recover. As in other European countries, the owner-occupier market was hit hard and people are choosing (or are being forced) to consider renting. As a result, the Dutch housing market in Amsterdam is extremely buoyant.
Changes in the Dutch housing market
Subletting is legal in the Netherlands provided the main tenant consents and if not prohibited in the tenancy agreement. An exception to this would be a partial sublet i.e. letting out a room in a house or an apartment. Short-term rentals are popular for the large number of tourists who visit major Dutch cities, especially Amsterdam and Rotterdam. There has been some concern, evident elsewhere in large European cities, that the Dutch housing market may suffer with the increase in properties set aside for tourism.
A significant amendment to Dutch rental law has been the reformed Housing Valuation Scheme (WWS). Now, the popularity of a property’s location is partly reflected in the maximum price a landlord is permitted to charge. Up to 25% of the maximum rent is determined by WWS. Rent increases will be adjusted annually. It is hoped this measure will increase the possibility to invest in regions where demand exceeds supply. The reformed scheme will take effect on 1st October 2015.
Dutch rental law allows for rent increases above the level of inflation. Depending on the income of the tenant, the maximum increase above inflation is:
1. 1.5% for low-income families earning up to €33,614
2. 2% for middle-income families earning between €33,614 and €43,000
3. 4% for high-income families above €40,000
Those with lower incomes can be compensated with increased housing benefit.
Landlord’s additional income from rent increases will enable them to pay gradually increasing landlord levy designed to encourage landlords to work more efficiently and improve their operations.