Amsterdam house owners can choose perpetual ground lease instead of expiring conditions. Within an apartment building that is handled by the association of owners (VvE in Dutch). As an apartment owner you can also choose for perpetual lease individually. Even when the association of owners doesn’t. How does it work?
Under normal circumstances you can redeem ground lease for a certain period of time, for example 50 years. You pay an amount at once or a yearly canon. You have the ground on loan, that’s what you pay for. After 50 years agreements will be renewed. You can set up new terms for a longer period of time, with risk that costs will be risen strongly. Also when selling your house the current terms regarding ground lease will be a point of attention. If ground lease is only redeemed for another 20 years you may experience more difficulty in selling your house.
Do you have an apartment with expiring ground lease at the moment (also called continuous ground lease)? By choosing the perpetual alternative you can settle this with the municipality of Amsterdam at once. You can make a so called obligatory agreement. When selling your apartment the perpetual lease will transfer to the new owner. When selling your apartment this will be a big advantage compared to most other apartments that are for sale at the same time.
You can calculate the level of costs online through Amsterdam’s municipal website. In order to make a calculation a lot of information is asked. For example ground lease data, but also the WOZ value as of the 1st of January 2014 or the 1st of January 2015. That’s your choice. It’s advisable to choose the lower amount to keep costs as low as possible.
It’s a matter of weighing the costs and choosing the best option. If you have plans to change homes on the short term, investing in perpetual ground lease probably isn’t the best thing to do. Although you probably will sell your house with a bit more ease. Apartments in Amsterdam are sold fast and easy at the moment, but you will never know what the future holds. You also have to keep in mind that the housing market experiences less favourable times.
Want to buy an apartment in Amsterdam? We are happy to be at your service. We also can advise on terms and conditions that have to do with buying apartments and situations regarding ground lease.