What the Dutch Parliament and Government are doing to reduce rents

Over the past five years, the average rent in the four largest cities in the Netherlands has risen by around 160 euros per month. Renting quality housing is a heavy burden not only for low-income residents of the country, but also for people with average incomes. The upper house of the Dutch Parliament (Senate) has approved a bill to reduce rents for low-income tenants in 2023. In addition, the government is developing a general law to reduce rents. 

What has been done for low-income Dutch people?

The 2023 Rent Reduction Bill for Low Income Tenants went into effect on March 1, 2023. From that date, housing corporations will be able to submit proposals to the tax and customs administration to reduce rents for low-income residents. The category of tenants requiring a reduction in rent will include all those whose income does not exceed 120% of the minimum. The rental fee for such tenants cannot exceed 575,03 euros per month. If the cost of housing is currently higher, landlords are required to submit proposals to reduce it between March 1 and May 31, 2023. A month later, from July 1, 2023, the new housing payment should take effect.

Those who meet the following criteria are eligible for a rent reduction in 2023:

• The family consists of 1 person who does not receive a state pension, and the income received does not exceed 23 euros,
• The family consists of 1 person who receives a state pension and the income received does not exceed 24 euros,
• The family consists of 2 people, both do not receive a state pension, and the income received does not exceed 30 euros,
• The family consists of 2 people, of which at least 1 person receives a state pension, the income received does not exceed 32 euros.

The income of tenants will be determined based on the results of 2021, and the total income of the household will be taken into account. The income of children under the age of 27 living with their parents is excluded from the total family income. 

If a tenant's income declined after 2021, they must file a rent reduction application with the housing corporation no later than December 30, 2024. To reduce the fee, the applicant must provide the following documents:

• Signed application for rent reduction, which indicates: the total number of people living in the house and separately the number of children and their ages. 
• Documents confirming the amount of total income for the last 6 months (income certificates, etc.). 

To qualify for a rent reduction, your income in the last 6 months must not exceed the following:

• For a family of 1 person who does not receive a state pension - 11 euros,
• For a family of 1 who receives a state pension - 12 euros, 
• For a family of 2 in which both family members do not receive a state pension - 15 euros,
• For a family of 2, if at least 1 person receives a state pension - 16 euros.

Employees of housing corporations may request a tenant income statement through web portal of the Tax and Customs Administration.

In the National Accords, when forming a government coalition in Parliament, it was supposed to reduce the rent for people with low incomes from 2024. However, after consulting with housing corporations, the government has decided to achieve this no later than July 1, 2023.

Government plans to reduce rents for the rest of the Netherlands

The government is developing a law to regulate the average market rent. It is planned to make the housing assessment system (woningwaarderingsstelsel - WWS) mandatory. It is believed that the measures provided by the new law will lead to a reduction (by about 190 euros per month) in the rent of more than 300 residential properties.

The bill focuses on four main areas:

1. Set maximum rent based on WWS. Currently, the government can regulate the fee in facilities that have scored no more than 145 points, the bar is planned to be raised to 186 points. How these points are calculated, you can find out in detail on the government website. Currently, the maximum rent in houses rated at 186 points is 1021,02 euros per month. Its size is annually indexed for inflation and will amount to 1123,13 euros at the time the law enters into force. The possibility of regulation will remain until the liquidation of the shortage of housing and applies only to newly concluded contracts. If the established rental rates are exceeded, property owners will be fined.
2. Better tenant protection. Renters will be able to file complaints with the Rent Evaluation Commission (Huurcommissie). 
3. Improving the energy-saving qualities of housing. Homes with a high level of energy efficiency will receive additional WWS points, while those with a low level of efficiency will have points deducted. As a result, the level of rent in houses with low energy efficiency will decrease. Owners of modern energy-efficient housing will be able to earn more, but this difference will be offset by tenants with lower heating bills. 
4. Increase in new construction. Owners of properties delivered after January 1, 2024 (provided that construction began before January 1, 2025) will be able to add 5% to the maximum rent for 10 years after the housing is put into operation. This measure should lead to an increase in the volume of housing under construction.

The new law is expected to be submitted to parliament for approval in autumn 2023.

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