The Housing Valuation System as of July 1, 2024 (Affordable Rent Act)

The housing valuation system is an essential part of the Dutch rental sector and has a significant impact on both tenants and landlords. Rumors have been circulating that a new law, called the "Affordable Rent Act," will come into effect on July 1, 2024, bringing significant changes to the current housing valuation system. In this article, we will discuss the basic principles of the housing valuation system, its role in the rental market, the changes coming with the new law, how the new system will work, and what this means for the future of the rental market in the Netherlands.

What is the housing valuation system?

To understand what the housing valuation system entails, we must first grasp its basic principles. The housing valuation system is a method to calculate the maximum rent of a house based on various factors, such as the surface area, type of house, and quality of the property. It establishes a balanced and fair rent, considering the interests of both the tenant and the landlord.

The basic principles of the housing valuation system

The basic principles of the housing valuation system are based on objective criteria to determine the rent. These include the quality of the property, the surface area, and the type of house. Additionally, the market value of comparable homes in the area is considered. Based on all these factors, a points system is used to calculate the maximum rent.

The housing valuation system aims to keep the rental market transparent and affordable. It protects tenants from unreasonably high rents and provides landlords with a guideline to determine a fair rent.

The role of the housing valuation system in the rental market

The housing valuation system plays an important role in the Dutch rental market. It ensures that tenants are protected from exorbitant rents and that landlords receive reasonable compensation for their properties. The system creates a balance between the interests of both parties and contributes to a stable and healthy rental market.

Changes in the housing valuation system as of July 1, 2024

On Monday, April 22, the House of Representatives will vote on the Affordable Rent Act. If this law is eventually adopted by the Senate, several important changes will occur in the housing valuation system. These changes aim to make the rental market fairer and more affordable for tenants.

Key changes in the affordable rent act

The new law introduces changes in how the maximum rent is calculated. There will be more emphasis on the surface area of the property and its quality. Additionally, the points system will be updated to better align with current market conditions. These changes ensure that the rent better reflects the actual value of the property.

The impact of the changes on tenants and landlords

The changes in the housing valuation system will affect both tenants and landlords. For tenants, this means that the rent of their property may change. Some tenants may pay lower rent, while others might expect a slightly higher rent. Landlords will need to adapt to the new legislation and may need to revise their rental prices. Note that this applies only to new contracts; the new housing valuation system does not apply to ongoing contracts.

How the new housing valuation system works

The new housing valuation system works based on an updated points system, where the surface area and quality of the property play a more significant role. The maximum rent is calculated based on these factors, as well as other criteria such as the location of the property and its energy performance. This ensures that the rent better matches the actual value of the property.

Calculating the rent under the new system

The rent is calculated based on the number of points a property scores on various criteria. The more points a property scores, the higher the maximum rent. This ensures that the rent is more fairly distributed across different properties, based on their characteristics and quality.

Rights and obligations of tenants and landlords under the new law

Under the new law, tenants and landlords have rights and obligations that protect them and ensure a balanced relationship. Tenants have the right to object to the rent and to be protected against unreasonable rent increases. Landlords, in turn, have the right to receive fair compensation and to maintain their property in good condition.

Conclusion: what does this mean for the future of the rental market?

There is much discussion about the impact of the new law on the rental market, but it is expected that fewer homes will be available in the free sector. While this new law aims to keep rental prices fair, the consequence is that rental prices may have to be adjusted downwards so significantly that renting out a property is no longer lucrative. It could mean that your property no longer falls into the free sector according to the new valuation system, and you may have to ask several hundred euros less in rent per month. This, combined with the new tax rules, poses a considerable challenge for private landlords. The result is that many properties are leaving the free sector and being sold. Less supply in the free sector will eventually drive up rental prices. This is not the desired effect.

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