23Jun

Rent increase in 2023: What you need to know

In 2023, it is possible to increase rents for both social rental housing and free sector housing. Here are the key points:

Social housing

For social rental housing, the maximum rent increase per July 1, 2023 is 3.1%.

The rent can increase by a maximum of 3.1% if the (bare) rent is €300 or more per month (equal to the average wage trend).
If the (bare) rent is lower than €300 per month, the rent can be increased by up to €25. This allows landlords to raise very low rents more quickly for better value for money.

These rent increase rules apply to independent rental properties, such as single-family homes, apartments, studios and bungalows. Rooms, caravans and pitches are also always subject to a maximum increase of 3.1% from July 1, 2023.

Free sector housing

For properties in the free sector, since January 1, 2023, the maximum rent increase is 4.1%. Should a higher percentage be stated in the rental agreement, the maximum increase of 4.1% still remains in effect.

03apr

The main changes of the Good Landlord Act

On Tuesday, March 21, 2023, the Good Landlord Act passed the first chamber as a hammer piece. This bill gives municipalities more opportunities to protect tenants from abuses when renting housing. Thus, municipalities can impose additional requirements on the landlord when it comes to the maintenance of the property and the maximum rent of regulated rental housing, among other things. The central government has indicated that the law is likely to take effect July 1, 2023.

The main changes and consequences are listed below.

Rules apply to both landlords and rental agents

The rules of good landlordism apply not only to the landlord himself, but also to the intermediary or rental agent engaged by the landlord. The rules apply to both private/commercial landlords and admitted institutions. This automatically ensures that the risk of possible (financial) sanctions from the municipality lies with both the landlord and the letting agent.

Transparent selection process

When the property is offered (online), it must appear that everyone who meets the selection criteria has a chance to rent the property. There should be a clear and transparent selection procedure with objective selection criteria. If possible, the landlord should allocate by order of registration or application. These are objective and transparent factors. Rejected applicants should also be informed, with the reason for rejection.

Written rental agreement

It becomes mandatory to always enter into a written rental agreement. The written rental agreement has, of course, been a standard for some time but will now have a legal basis.

This obligation applies only to leases entered into after the law comes into force.

Laws and regulations

Both the landlord and the rental agent are obliged to comply with the legal rules regarding rent and service costs. This already follows from the relevant rules (these are usually of mandatory law), but is now also anchored in the Law of Good Tenancy, with sanctions for violation. These sanctions can be imposed on both the landlord and the rental agent. This article will also further explain the sanctions.

Security deposit

The security deposit may not exceed two times the bare term rent. The deposit must also be returned to the tenant - subject to certain exceptions - within 14 days of termination of the lease at the latest. The amount of any service charges for gas, water and electricity will therefore also have to be taken into account. In practice, it will not be possible for many energy companies to send an interim statement of the actual costs within 14 days.

Information to be provided in writing to the tenant

Landlord is required to notify Tenant in writing of, among other things:

Please note that this obligation also applies to pre-existing leases; in these, the aforementioned information must have been provided to the tenant within one year of the law's entry into force.

Additional rules for renting to migrant workers

The following additional rules apply to rentals to immigrant workers:

Municipalities may also establish a rental permit for renting housing to labor migrants. In doing so, municipalities may attach conditions to the permit with respect to the maximum number of persons per room, provisions for hygiene and with respect to facilities for storing and preparing food. This permit is not area-specific.

Municipality may set further rules: rental permit

The law also opens up the possibility for municipalities to include in an ordinance further rules including a prohibition on renting without a permit. In such a case, you as a landlord will need a rental permit to rent out your property.

This gives municipalities the power to impose additional requirements on landlords in vulnerable neighborhoods in relation to maintenance and, in the case of regulated independent rental housing, the maximum rent of a property.

Sanctions/enforcement

Municipalities are responsible for monitoring and enforcing the general rules and, if applicable, the rental permit. The law has the following penalties for violation of the Good Landlord Act:

Municipalities should also establish a hotline where reports can be made anonymously and free of charge by tenants of undesirable rental behavior. The contact information for this hotline should also be included in the rental agreement.

Sources:

Central Government
Upper House of the States General
Tomlow Lawyers

24mrt

Utrecht makes home sharing easier

From July 1, 2023, the sharing of living space in Utrecht will be simplified. The college has decided that a living space may be shared by up to three people without a permit. Currently, a permit is required as of 3 persons. This measure is part of the housing ordinance, which has been sent to the city council for approval. The proposal is in line with the college's ambition to make better use of existing housing and is also included in the coalition agreement.

"We are fully committed to alleviating the housing shortage by adding more housing," said Alderman Dennis de Vries (housing). "We do this on the one hand by building new housing and on the other hand by making the best use of existing housing. This measure perfectly illustrates this commitment."

A more comprehensive revision of the housing ordinance will be implemented later this year, effective Jan. 1, 2024. This adjustment is partly due to new legislation. The housing ordinance is an important tool for the City of Utrecht to gain more control over the protection and utilization of the existing housing stock. Seeking to shift the housing market to public housing, with the government playing a greater role, is one of this college's main focuses.

14 Oct

City Estate launches partnership with Realstats to use big data to determine ideal rental prices

The nationally operating property management company City Estate and Realstats have started a collaboration on the data-driven estimation of market-based rents. "By making use of the data services of Realstats, we can advise real estate investors even better and with solid reporting regarding realistic and market-conforming rents," says Reinier Derksen, Founder at City Estate. "Data will play an increasingly important role in the real estate sector. In order to respond to this development and provide our clients with the right insights, we have partnered with Realstats. Many real estate investors have the desire to be advised in the rental strategy that can be applied for a particular investment, based on a solid foundation, so that subsequently the maximum return can be achieved from an investment. In addition to the knowledge and experience we already have, the comprehensive report through Realstats now makes our advice even more complete."

Realstats' Rent Dashboard

Realstats has the most complete and reliable data of the Dutch rental market. This data comes from Pararius and Huurwoningen.nl combined with other sources such as Kadaster, CBS and the tax authorities. Based on these sources, Realstats offers valuable data insights. This, in combination with the unique ERV (Estimated Rent Value) model and analysis of reference transactions, allows the market rent to be determined. Philip van der Molen, Product Consultant at Realstats adds: "our mission is to make the housing market transparent so that supply and demand are better matched in the future. When we provide insight into trends and developments in the rental market for City Estate, we support them in our mission."

About Realstats

Realstats is a specialist in the real estate industry and the number one in rental data. With a team of data experts, they provide the most reliable data insights and analysis of the Dutch free sector rental market. They do this by combining data from the two largest rental platforms in the Netherlands, Pararius and Huurwoningen.nl, with other reputable and reliable data sources.

22apr

Biggest free sector rent increase in Q1 2022 since corona

That the corona pandemic is all but over is evidenced by rent increases in the freehold sector. In the first quarter of 2022, rents increased by an average of 6.7% compared to the first quarter of 2021. These figures were released yesterday by housing platform Pararius.

Figures from Q1 2022

The average square meter price increased 6.7% in Q1 2022 compared to the previous year. This distinguishes between the three delivery forms bare, unfurnished and furnished. For all three of these delivery forms, rent increased. At 5.4%, the rental price of homes delivered bare rose the least in the first quarter. Here, the average square meter price came to €14.31. Furnished homes increased in the free sector by an average of 6.1% from €18.68 to €19.82 per square meter. The biggest increase occurred in unfurnished homes. These rose by a whopping 9.1% to €16.69 per square meter.

Demand for rental housing in free sector continues to rise

Rental prices in the free sector continue to rise. However, the number of new rentals fell by almost 30%. Thus, the supply of rental housing in the free sector is decreasing somewhat. Rental prices above €1200 per month are no longer a feature in the free sector. The reason for this is that the supply remains virtually the same while the demand for housing continues to rise sharply. There are only 326,000 homes available in the free sector and this scarcity is currently being passed on in rents.

The five major cities

So far, the supply of housing in major cities remains limited compared to the demand for it. In Amsterdam, the average price rose 8.6% to €24.29 per square meter. This makes Amsterdam the most expensive city in the Netherlands to rent a home. In Utrecht, rents rose 4.7% to €19.55 per square meter. In The Hague, rents increased by 4.6% and in Rotterdam by 7.4%. This brings both cities to €17.10 per square meter which is below the national average (€17.18). In Eindhoven, rents rose the most by 11.7% to €16.90 per square meter.

Medium-sized city developments

In Amstelveen, the average rent in Q1 2022 came to €20.45 per square meter followed by Haarlem and Leiden at €19.90 per square meter. The largest increases in rents in the free sector took place in Lelystad which increased by 17.8% and Deventer which increased by a whopping 17.9% compared to Q1 2021.

In only four cities did rents fall. In Weert, rents decreased by 2%, in Heemstede by 4.3%, in Zoetermeer by 5.5% and in Diemen the highest price decrease of 5.5% took place.

09apr

Smoke detectors mandatory from July 1, 2022

As of July 1, 2022, it is mandatory to install a sufficient number of smoke detectors, even in existing buildings. For new construction homes, the smoke detector requirement has existed since 2003. Under the new legislation, as of July 1, 2022, existing construction must also be equipped with smoke detectors. Because the building code is being amended, you are required by law to comply with this; this also applies to rental properties.

Regulation

The new law requires one inspected smoke detector per floor. Spaces such as a basement or attic, which do not serve as living quarters, do not have to meet the new requirement.

There are some exceptions. For example, student houses are required to hang a smoke detector per (occupied) room. Also, an enclosed space (such as a hallway) used as an escape route is required to be equipped with a smoke detector.

Requirements

In new construction houses it is mandatory to connect the smoke detector to the mains, also a back-up battery must be present. In existing buildings this is not important and a detector with batteries is sufficient. All smoke detectors must comply with the European NEN-14604. Also, the mains-connected detector must meet the NEN-2555 standard. In both cases they must have a CE mark.

Why?

The new law was introduced because most people become victims of fire while sleeping. With the help of a smoke detector, the number of victims should be significantly reduced according to Minister Knops.

"Most fire victims are caused by smoke inhalation. Smoke detectors therefore save lives. TNO research last year shows that smoke detectors in all homes reduce the risk of fatalities. Therefore, I want to amend the Building Code on this point and make smoke detectors mandatory not only for new construction but also for existing construction."

Installing smoke detectors on site

City Estate has selected a suitable smoke detector that meets all requirements and standards with a 10-year battery life. We can completely relieve you as a property owner in placing and installing these smoke alarm(s) on location before July 1, 2022. Interested and want to know more about this? Then get in touch with us!

08dec

Maximum free sector rent increase in 2022 at 3.3%

Landlords may increase rents in the free sector by up to 3.3% from January 1, 2022. A rent freeze applies to social housing until July 1, 2022. The central government issued a notice about this on December 7, 2021.

The law states that for three years (May 1, 2021 to May 1, 2024), rents in the free sector may be increased each year by inflation (2022: 2.3%) + 1%. The inflation rate in the Netherlands is calculated each year using data from the Central Bureau of Statistics.

Frequently Asked Questions

Do I live in the free sector?

You rent a rental property in the free sector if the bare rent when the contract was signed was higher than the rent liberalization limit from that year. The bare rent is the rent without other costs such as service charges.

What rent liberalization limit applies to me?

You can find the liberalization limit that applies to you on the Rent Commission website. Click here to view it.

What is the maximum rent increase for the social (regulated) sector in 2022

In the social (regulated) sector, rents may not be increased until July 1, 2022.

The lease states a different percentage, now what?

If you have included in the lease a percentage for the annual rent increase, it depends on the amount.

Is the agreed rate higher than 3.3%? You may not raise the rent more than 3.3% in this case.

Is the agreed rate lower than 3.3%? In this case, the agreed rate remains the maximum.

04dec

All about buyout protection

Several cities in the Netherlands such as Rotterdam, among others, are starting to introduce an obligation to self-occupy. The owner-occupancy obligation is being introduced as buyout protection against real estate investors. This owner-occupation obligation will apply from January 1, 2022 on the basis of the law "Acquisition protection and extended possibilities for temporary rental". The buyer of the property must live in the property himself and may not rent it out for a period of four years.

With this, the municipalities want to prevent real estate investors from buying homes with the aim of renting them out. The municipality of Rotterdam calls the measure "good for the livability of vulnerable neighborhoods." Temporary occupancy would lead to "an unpleasant residential neighborhood where residents do not know each other and do not say hello."

How does the buyout protection work?

The option is given to municipal councils to include buyout protection in the housing ordinance. The municipal council must substantiate why the use of buyout protection is necessary, appropriate and proportionate to maintain or promote livability in the neighborhood in question. Buyout protection applies only to low-cost and medium-cost housing. Which homes fall under low-cost and medium-cost varies by municipality. A municipality itself must substantiate on the basis of the situation up to which WOZ value owner-occupied houses fall into the cheap and medium-priced segment. In principle, the regulation lasts until January 1, 2025. An evaluation will be carried out within three years of the introduction of the law. It is possible that the buyout protection will be extended.

The buyback protection applies only to owner-occupied homes acquired after the introduction of the scheme and to homes that were in rented condition for a period of less than six months on the date of delivery to the new owner. Properties that had been rented for more than six months at the time of transfer before the buyback protection was introduced are not covered.

Rotterdam

From January 1, 2022, 16 neighborhoods in Rotterdam will be subject to a self-occupancy requirement for low and middle segment housing with a WOZ value of up to €355,000.

The buyout protection applies in the 16 districts below:

Source: Rijnmond

Amsterdam

The City of Amsterdam is also working on a self-occupancy obligation for existing homes. In Amsterdam, the city council wants to introduce buyout protection for homes with a WOZ value of up to €512,000, substantially higher than in Rotterdam. The city council will vote on this plan in February 2022. When the plans in Amsterdam finally go through, about six out of ten Amsterdam homes will fall under the buyout protection, according to research by NOS.

Other cities

Other cities are also introducing buyout protection. A survey by the Volkskrant reveals that 130 municipalities are considering instituting a self-occupancy obligation for existing homes after January 1, 2022. Some municipalities have already proposed concrete plans, such as The Hague, while others are going to investigate the possibilities. A change in the law will make buyout protection measures for existing homes possible from Jan. 1, 2022, in addition to the self-housing obligation for new construction. Municipalities in the Netherlands are allowed to designate their own neighborhoods or districts where buyout protection will apply. So we will have to wait and see which other cities will follow.

Exceptions

There are a few exceptions to the rule. For example, a house may be rented out to immediate family members or temporarily rented out when staying abroad, for example.

21 Oct

City Estate present during Provada

City Estate will be present at the largest real estate fair in the Netherlands, the Provada. On Tuesday 26, Wednesday 27 and Thursday 28 October 2021, the real estate market will meet during this fair. With a varied program, the Provada organization brings real estate professionals together.

City Estate will visit several booths and interact with clients and suppliers. Are you interested in an introduction? Then please contact with us! We'll see you at the fair!

21sep

Real estate in box 3, how to keep it that way?

If you as a natural person own real estate you would like it to fall in Box 3, under asset management and not in Box 1 under income. Among other things, this has to do with how the tax authorities determine your assets as a real estate investor. In this blog you can read all about real estate investing and box 3.

Does my real estate fall into box 3?

For private investors who own real estate as natural persons, the basic rule is that this falls under Box 3. This must involve a normal situation. The tax authorities call this 'normal asset management'. The rent you receive is untaxed; on the other hand, you may not deduct items such as maintenance costs or interest.

What is not normal asset management?

The Internal Revenue Service lists several situations where there may be income from other income rather than normal asset management:

leasing out a property
For example, you converted a property to create separate apartments that you sold or are going to sell.
Performing at least 30% of major maintenance or other modifications to a leased property yourself
Using prior knowledge or other specific knowledge to gain advantage.

How can I keep my real estate in Box 3?

There is no clear guideline for when your investment property falls into Box 1 or Box 3. Incidentally replacing a light bulb can still be seen as normal asset management. But as soon as you yourself, as a real estate investor, start performing all activities involved in renting out real estate and remain actively involved in this, the tax authorities will quickly see this as profit from business or result from other activities. In that case, it will therefore be taxed in Box 1. By outsourcing the work to a property management company, you can be sure that your real estate portfolio will fall into box 3 and you will not face any surprises.

Property management by City Estate

Thanks to the unique and innovative approach of City Estate, you, as a real estate investor, are completely relieved throughout the rental process. City Estate ensures that the house is put on the market for the best possible rental price. The search for a suitable and reliable tenant, screening of candidate tenants and signing of the lease are activities that are handled by City Estate. Finally, City Estate will also take care of the daily property management. Monthly rent collections, accepting and handling repair requests and periodic inspections are matters taken up by City Estate. In short, as a real estate investor, you can enjoy a carefree return on your real estate. More information? Then contact us quickly!

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