What Expats Need to Know
If you’re planning to move to the Netherlands, it’s important to be aware of recent changes in rent legislation. The Dutch House of Representatives has recently passed the Affordable Rent Act and the Fixed-Term Tenancy Act. These laws can significantly impact your rental situation in the Netherlands. Here’s what you need to know.
Affordable Rent Act: Reducing Rent Prices
The Dutch Affordable Rent Act will use points to grade rental properties to determine the maximum rent a landlord can charge. Rent control will apply to Dutch houses worth 186 points or less under new tenancy agreements, covering approximately 90 percent of rentals in the Netherlands. The Senate approved this bill on June 25, 2024, and it has been effective from July 1, 2024.
Points are awarded to properties through the home valuation system. Until July 1, 2024, properties with a maximum of 143 points could only be rented out as social housing, while properties above this point limit could be rented out in the private sector without regulation of the rental price. The Affordable Rent Act expands this points system from 144 to 186 points, equivalent to a rent price of €1,157.95 per month (price level 2024), thereby regulating the rental prices in the mid-rental segment.
In addition to expanding the points system, the method of awarding points has also changed. Factors such as the energy label of the property now play a more significant role, with higher energy labels earning extra points and lower labels resulting in deductions. Outdoor spaces are also given more weight in the points system.
The new points limit for a maximum rent price of €879 has been raised from 147 points to 186 points, corresponding to a rent price of approximately €1,123. Properties valued above these points will remain in the free sector. Builders can temporarily charge a 10% surcharge above the maximum rent price for newly constructed homes, and the WOZ (Waardering Onroerende Zaken = property value) cap has been increased, allowing the maximum rent price to partially reflect the property’s value.
This law applies to all new rental contracts concluded after July 1, 2024. Existing contracts will continue under the old regulations. It is expected that many homeowners may sell their properties to avoid the hassle of renovating and making them more sustainable, potentially reducing the availability of reasonably priced rental homes.
Fixed-Term Tenancy Act: Return to Fixed Contracts
2024 marks a year of significant changes in the housing market. In November 2023, the chamber approved the Fixed Rental Contracts Act, which prohibits the use of temporary rental contracts for homes, with some exceptions. The new rules take effect from July 1, 2024.
Until July 1, 2024, temporary rental contracts could be concluded for a maximum of 24 months, which was ideal for those wanting to ensure they could access their house, studio, or apartment after the lease expired. However, this caused a lot of uncertainty for tenants, prompting the amendment of the law. Temporary rental contracts concluded before July 1 remain valid for the term stated in the contract. After these contracts expire or when a tenant leaves, it is no longer possible to enter into a new temporary contract.
As of July 1, temporary rental contracts are largely prohibited. Renting is now possible either via a permanent lease or an interim rental contract. The latter is intended for landlords who stay abroad for study, work, or travel and plan to return to their home afterward.
The Fixed-Term Tenancy Act makes fixed-term contracts the standard again, providing more security for tenants. Temporary contracts will only be allowed in specific situations:
– Reoccupation by Landlord or Previous Tenant: Temporary rental is permitted if the landlord or a previous tenant intends to move back into the property themselves.
– Target Group Contracts: For certain groups such as disabled people, elderly, youth, and large families.
– Short-Term Rentals: Such as vacation rentals.
– Vacancy Law: Rentals under articles 15 and 16 of the Vacancy Law.
– Students: Tenants temporarily residing in the Netherlands for their studies.
Expanded Grounds for Termination: ‘Urgent Own Use’
The law expands the grounds for landlords to terminate a lease due to ‘urgent own use.’ This means landlords can terminate the lease if they need the property for a child or parent, provided the tenant can find other suitable accommodation. This must be explicitly stated in the rental agreement in advance.
Social and private housing;
Approximately 75% of the 3 million rental homes in the Netherlands belong to housing associations. Social housing in the Netherlands is mostly meant for people with lower incomes.
These associations are responsible among other things for letting social housing, defined as homes for which the initial monthly rent is under the then rent limit for liberalized tenancy agreements (private sector) (in Dutch).
The current limit (2024) is €879.66, for tenancy agreements that start in 2024. Each year, housing associations must let 92.5% of their vacant social housing to people with an income of up to €47,699 (one-person household) or €52,671 (multi-person household) and no more than 7.5% to people with higher incomes than €47,699 and €52,671 respectively (2024).
In some regions the housing shortage is too high for a 7.5% free allocation to suffice. In that case are housing associations allowed to agree to a locally higher percentage of free allocation with the municipality and tenant’s association, up to a maximum of 15%.
To apply for social housing, you must first register with your region’s social housing association. Once you’ve applied, you will be part of a waiting list.
The housing organization that you’ve registered with will have a website you can visit with all of the available properties. You then need to apply for the property you’re interested in. Currently the waiting list is 12+ years (!)
The free sector is a bit more flexible, when it comes to waiting lists. However, the rental prices are much higher and overbidding is becoming a trend.
In the Netherlands we make use of multiple website to find a house, think of www.pararius.nl and https://www.funda.nl/zoeken/huur. As we have more people looking for a nice house/apartment than we have houses available, sometimes 200+ candidates respond on 1 property.
The most competition will be find in the price range up till €2250,- euro per month (excl utilities)
Check the Points System
If you are renting or planning to rent a home, you can use the points check of the Rental Committee https://www.huurcommissie.nl/huurcommissie-helpt/huurprijscheck to verify if your rent complies with the new legislation.
Good Landlordship Act
This act sets out rules for landlords. If a landlord fails to comply with these rules, the municipality can give them a fine. Tenants can report any landlord who violates these rules. Such as: discrimination, intimidation, excessive deposits and unreasonable charges.
What Does This Mean for Expats?
- There is a high demand for rental properties, especially in popular cities. Be prepared for competitive bidding, particularly for properties priced up to €2,250 per month.
- From July 1, 2024, your landlord may increase the rent by a maximum of 5.8% yearly.
- Recognize the limited situations in which temporary rental contracts are allowed.
- Familiarize yourself with tenant rights and legal protections in the Netherlands, including deposit regulations, maintenance responsibilities, and eviction procedures. Companies like: www.huurteamcentraal.nl, funded by the government, can help protect your rights as a tenant.
- Utilize property search websites and be aware of the competitive rental market.
Relocation Assistance
When moving to the Netherlands, being aware of these new laws is crucial for making a well-considered-decision when renting a property. For further questions or support with your move to the Netherlands, the consultants of PIRGROUP are happy to assist you.
Stay informed and be well-prepared to ensure a smooth transition into your new home in the Netherlands!
