Homeowners in Amsterdam can choose perpetual leasehold instead of expiring agreements. In the case of an apartment complex, this normally goes through the homeowners’ association (VvE). However, as the owner of an individual apartment, you can also choose to switch to perpetual leasehold on your own—even if the VvE does not. How does that work?
In most cases, leasehold can be bought out for a fixed period, such as 50 years. You either pay a lump sum or an annual fee known as *canon*. The land is not owned by you but leased, and you pay for the right to use it. After 50 years, it is unclear what terms may apply. You can extend the agreement, but costs may increase significantly. Leasehold terms are also a factor when selling your home. If the lease has only 20 years left, this can make the sale more difficult.
Switching to perpetual leasehold
Do you currently have an apartment with a time-limited leasehold (also called continuous leasehold)? By choosing the perpetual version, you can settle the leasehold in full with the City of Amsterdam. This involves signing a so-called obligatory agreement with the municipality. Upon selling your apartment, the perpetual leasehold automatically transfers to the new owner. This is a major advantage compared to most other apartments on the market that still operate under limited leasehold terms.
What does perpetual leasehold cost?
You can calculate the cost online on the City of Amsterdam’s website. The calculation requires several details, including your current leasehold terms and the property’s WOZ value as of either 1 January 2014 or 1 January 2015. You are allowed to choose whichever date results in the lowest valuation, which can reduce the overall cost.
Perpetual or time-limited leasehold?
It comes down to comparing the costs and choosing the best option. If you plan to move in the near future, investing in perpetual leasehold may not be the most strategic choice. However, it can make your apartment easier to sell. Right now, apartments in Amsterdam sell quickly and easily, but the future is uncertain. A market slowdown is always a possibility.
Are you planning to buy an apartment in Amsterdam? We are happy to help. We can also advise you on the conditions and obligations tied to the property, including a review of the leasehold situation.
