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Buyer beware: Amsterdam restricts buy-to-let for new builds

July 8, 2020
Photo: DutchNews.nl
Photo: DutchNews.nl

People who buy new build homes on council-owned land in Amsterdam will have to commit to live in them rather than renting them out.

The city council this week brought in a ‘live-in’ ruling for homes that are built from scratch or converted from offices.

The rule is intended to dissuade ‘buy-to-let’ investors, who have been charged with pumping up rental prices and converting housing stock into lucrative year-round holiday rentals.

‘I want to do everything I can to ensure that Amsterdam remains a city where everyone can live, regardless of the weight of their wallets,’ said head of housing Laurens Ivens in a press statement.

‘This is why we need to ensure that homes are bought for people to live in themselves and not to be rented out at top prices…Homes are to be lived in, and are not a way of making money.’

The rule is expected to come into force in practice in a couple of years, when the first homes that are currently being built or converted on city land go on sale. The obligation will be written into the leasehold conditions, and the only exceptions will be for direct family relations such as partners, children or parents, or if owners are temporarily working abroad.

Rental will only be possible under the restrictions of the regulated ‘social’ or ‘mid-level’ sectors, meaning that the landlord will be limited to a maximum rent of €1,027 per month.

Further measures

Older homes cannot be regulated by the Amsterdam rules, however the home affairs minister Kajsa Ollongren has restricted rent rises and is giving local councils the power to impose ‘purchase protection’ which could mean that a permit would be needed to rent out any homes in a protected area. Rent controls on older homes could then also be introduced.

Ivens added: ‘We look forward to the implementation of this measure. We can only really protect the housing market if the live-in rule also applies to existing owner-occupied homes. Then we can really do something for Amsterdammers who want to buy a home for themselves.’

The moves to impose greater housing regulation have caused some consternation amongst estate agents, who see them as a potential infringement of property rights.

Last year Berlin approved five-year rent freezes and other measures to limit spiralling housing costs, while the deputy mayor of Barcelona, Janet Sanz, has said that she hopes up to half of licensed tourist apartments will become ‘normal apartments to rent’ after the collapse of Airbnb demand during the corona outbreak.

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