Dutch housing minister Hugo de Jonge has told the Volkskrant newspaper that foreign investors are welcome in the Netherlands and that new rent control rules will give them more security about the returns they will make on their investments here.
The minister was commenting on the decision by two large foreign investors – Capreit and Heimstaden – to sell around 10,000 rental properties in the Netherlands. But both firms are selling their Dutch real estate to raise capital for other investments, not because of the expansion of rent controls, the minister told the paper.
The outgoing government is planning to expand the current rent control system to cover homes worth up to €1,100 a month, rather than €808 as at present, although the legislation has not yet become law. Many developers and investors say this means it will be no longer profitable to rent out homes and small investors in particular have already begun selling their property on the open market.
Building new homes more profitable
“Most private landlords are doing just fine,” De Jonge said. “The new law on affordable housing will allow many of them to continue to charge the same level of rent. And building new homes will also be profitable. Next month I will make it clear how much extra landlords can charge for new property – it will be considerable.” Currently, landlords can charge an additional 5% rent for newly built property for a 10 year period.
Landlords will also be able to charge more for homes with a high energy label because, De Jong said, making property more sustainable should be rewarded. Homes with outside space, such as balconies, will also have higher rents.
“Foreign investors, come to the Netherlands,” De Jonge said. “It is a country with a reliable government and with high standards of morality when it comes to payments. We need a lot of investment to build 981,000 new homes, and that needs to come from the Netherlands and abroad. All reliable landlords and developers are very welcome, without compromising the necessary protection for tenants.
De Jonge has also told MPs during a debate on the housing crisis that he will look into calls to set up some form of guarantee for new housing developments which would allow projects to go ahead, even if 70% of the properties had not yet been sold.
He has also warned that the current transfer tax paid by investors of 10.4% is “really too high” when looked at from an international perspective. This is something that should be on the table during the negotiations to form a new government after the November general election, De Jonge told MPs.