Ground lease Amsterdam mortgage

Ground lease Amsterdam mortgage

In Amsterdam, many houses and businesses are located on municipal land that is leased. Leasehold is the right to use a piece of land and a house on it that you do not own. The land and buildings remain the property of the leaseholder, or the council. This may be a housing association or the Forestry Commission. The tenant, or user, pays an annual fee to the owner. This is called a canon.

Leasehold Amsterdam

There are two types of leasehold in Amsterdam, perpetual leasehold and fee simple leasehold. With a perpetual leasehold, the canon is fixed for 50 or 75 years (also known as periods). At the beginning of the period, the municipality determines how much the land is worth and how much canon you have to pay. You can choose to pay an annual amount or buy it all at once. At the end of the period, the council reassesses how much the canon is worth. With a perpetual ground rent, there are no periods and the amount of ground rent is determined at one time. Again, you can choose an annual canon or buy the amount forever.

If you choose an annual canon, the amount will be adjusted annually for inflation. This applies to both leasehold for life and leasehold for perpetuity.

Ground Rent Amsterdam Conditions

For most people, leasehold terms are difficult to understand. Before buying a leasehold property in Amsterdam, you should always ask a notary to decipher all the terms and conditions. In the leasehold conditions you will find for example

  • Who the leaseholder is
  • The duration of the leasehold
  • What arrangements apply to the ground rent (repayment, amount, indexation, review)
  • The purpose of the land and property
  • Whether you need permission to transfer the leasehold
  • What charges and maintenance you are responsible for
  • Whether there are any special rules that the leaseholder must comply with

 

What to look out for

When buying a leasehold property in Amsterdam, there are a number of things you should look out for.

  • Who owns the property? Municipality, corporation or private individual?
  • Is the leasehold for a limited or unlimited period? If the former, when does the lease expire and are you entitled to an extension?
  • Are there any restrictive covenants on the leasehold? For example, on the use or destination of the property.
  • What is the current ground rent?
  • Is the ground rent tax deductible? Check with the notary.
  • Do you need the owner’s permission to transfer the leasehold?

 

Would you like to take out a mortgage and need help?

Would you like to know more about leasehold in Amsterdam? Let us advise you. With years of experience in the Amsterdam housing market, we know all the ins and outs of leasehold.

 

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