A Brief Overview of All Regulations in the Dutch Rental Market for Real Estate Investors

A Brief Overview of All Regulations in the Dutch Rental Market for Real Estate Investors

1. Housing Permit
   In certain areas or municipalities in the Netherlands, a housing permit may be required to occupy or rent out a property. This permit, issued by the local government, aims to regulate the housing market and ensure fair distribution of homes. Properties with more than 184 points do not require a housing permit. For single-person households, the maximum annual income is €61,148, and for multi-person households €77,521 per year.
2. Purchase Restriction (Opkoopregeling)
   Some local governments have introduced regulations to limit or control the purchase and immediate rental of homes by investors. In these cases, a WOZ property value limit of €405,000 applies. Properties below this threshold may not be bought solely for the purpose of immediate rental.
3. Temporary Rental Contracts
   As of July 1, 2024, it will no longer be possible to establish temporary rental contracts of two years or less.
4. Transfer Tax
   When purchasing a second home or a property that is not intended as a primary residence, a higher transfer tax rate applies in the Netherlands. This rate is currently set at 10.4%, instead of the regular 2%.
5. Short-Term Rental via Airbnb or Booking.com
   Depending on the region, it is not allowed to rent out a property via platforms such as Airbnb or Booking.com for longer than six weeks or a maximum of 60 days per year.
6. Rental Permit
   In certain municipalities or areas, a rental permit is required to rent out a property. Issued by the local authority, this permit may include requirements related to safety and rent limits. Additionally, a general rental permit can be implemented in areas where livability is under pressure, making it illegal to rent out properties in certain categories without a permit.
7. Affordable Housing Act, Mid-Market Rent (Middenhuur)
   Currently, landlords are free to set rental prices for properties with more than 141 points. From 2024 onwards, the threshold will shift to 187 points. Properties below 187 points will fall into the mid-market rent category, with a maximum rent of €1,026.71 per month.
8. Anti-Speculation Clause and Owner-Occupancy Requirement
   Anti-Speculation Clause:
   To prevent speculation with newly built homes, local authorities may include an anti-speculation clause in the deed of transfer. This clause obliges the buyer to live in the property for a certain period (e.g., one or two years) or not to sell it without the municipality’s consent. Breaching this clause can result in a fine.Owner-Occupancy Requirement:
   The owner-occupancy requirement obliges the buyer of a plot or property to personally occupy the home for a certain period (typically three to five years). This requirement is enforced through private law. The longer the required occupancy, the more likely a judge may find it disproportionate.

Comparison with the Situation in Dubai

• Transfer Tax (Transfer Fee):
  In Dubai, the transfer fee is 4% for all purchasers, regardless of whether they are investors or permanent residents.
• No Anti-Speculation Clause or Owner-Occupancy Requirement:
  When purchasing off-plan new-build homes in Dubai, there are no anti-speculation clauses or owner-occupancy requirements.
• No Income Tax on Rental Income:
  Rental income in Dubai is not taxed, unlike in the Netherlands where rental income can be subject to taxation.
• No Wealth Tax on Property Value:
  There is no wealth tax on the value of real estate in Dubai, whereas in the Netherlands, assets (including real estate) can be taxed in Box 3.
• No Capital Gains Tax on Sale:
  Dubai does not levy capital gains tax on property sales, unlike certain European countries where a significant tax may apply if a property is sold within a certain period (for example, 20% in Spain – Plusvalía Municipal, and 28% in Portugal – Mais-Valias).
• Unlimited Short-Term Rentals:
  In Dubai, it is possible to rent out properties on a short-term basis without restrictions, for example, daily rentals to tourists via Airbnb or Booking.com. Many developments offer 24/7 receptions and property management apps, simplifying key exchanges and check-in/out procedures and effectively allowing hotel-level management standards.
• Annual Rent Increases:
  As an owner in Dubai, you can increase the rent by up to 10% per year, depending on market conditions.