On July 1, 2024, the Affordable Rent Act went into effect with the goal of keeping rental housing affordable in the Netherlands. This new law changes the Housing Rating System (WWS) and creates a new sector of rental housing.
This article tells you all about the main changes and what this law means for tenants and landlords.
What is the Affordable Rent Act?
The Affordable Rent Act is designed to make rent prices in the Netherlands more regulated and affordable. The core of this law is the expansion and modification of the Housing Rating System (WWS). This system determines maximum rents based on points awarded for various qualities of a property, such as its surface area, energy label and WOZ value.
Extension of the Housing Valuation System.
The introduction of the law will create a new category of rental housing, namely the middle sector. This sector includes rental properties with a point number between the current liberalization limit and 187 points. These rental properties must now also adhere to the WWS, giving tenants in the middle sector access to the Rent Commission for disputes over rents, service costs and maintenance. Over time, rents for 300,000 homes are expected to fall by an average of €190.
Rent regulation for social rental housing
Maximum rents have long applied to social housing. These homes were already subject to WWS rules and remain so.
Enforcement by municipalities
In addition to the expansion of the WWS, the WWS will have a mandatory character. An important aspect of the Affordable Rent Act is that starting January 1, 2025, it will allow municipalities to take enforcement action against landlords who do not comply with the maximum rents. Municipalities will have the power to impose fines on landlords who violate the rules.
Changes to the Housing Valuation System.
In addition to the expansion, the WWS itself is also being modified. For example, rental homes with private and communal outdoor spaces will now receive more points. In addition, homes with a high energy label will receive plus points, while homes with a low energy label will receive minus points.
Impact on new leases
The changes apply to new leases created on or after July 1, 2024. With this new lease, the landlord must provide the tenant with a point estimate showing the number of points assigned to a rental property in accordance with the housing rating system and the maximum rent for the rental property.
The following applies to existing leases:
- If the current rent is below the current liberalization limit, the law takes effect immediately. The landlord must immediately adhere to the maximum rent according to the WWS and adjust the rent if necessary.
- If a rental property was rented in the free sector before the law went into effect, but falls into the lowest segment by the new WWS (no more than 143 points), the rent must be adjusted starting July 1, 2025.
- If none of these situations apply, the law entails no changes.
Do you have questions about the specific changes the Affordable Rent Act will bring to you? Please feel free to contact us for more information and advice
