Selling a house in Amsterdam with a ground lease: how it really works

What exactly is leasehold?

If you want to sell a house in Amsterdam, there is a good chance that you will have to deal with leasehold. For many sellers and buyers, this remains a difficult concept to understand.

What does leasehold mean?

Leasehold is a form of land use whereby you own the house, but not the land on which it stands. That land remains the property of a third party (in Amsterdam, this is usually the municipality). As a leaseholder, you have the right to use the land, but you pay a fee for this: the ground rent. So when you sell a house in Amsterdam, you are actually only selling the house, not the land. The buyer takes over your leasehold rights, including the associated conditions.

The main features of leasehold

There are a few elements that are important to understand:

• Ground rent: the annual fee you pay for the use of the land. Sometimes this is paid off, sometimes not.
• Duration of the right: leasehold is granted for a long period (usually 50 to 100 years).
• Revision: at the end of a period, the ground rent can be re-determined, often based on the current land value.
• Transferability: upon sale, the leasehold right automatically transfers to the buyer.

If you are selling a house in Amsterdam with a leasehold, it is crucial to know whether the ground rent has been bought out and until when. A property with a “leasehold bought out until 2054” sounds much more attractive to buyers than a property with ongoing ground rent obligations.

Leasehold is a typical Amsterdam system that affects the sale of your home. If you are selling a house in Amsterdam, it is essential that you know how leasehold works, what conditions apply and how to communicate this clearly to potential buyers. Transparency pays off, it prevents surprises and contributes to a smooth sales process.

What types of leasehold exist in Amsterdam?

If you want to sell a house in Amsterdam, you will almost always have to deal with leasehold. But did you know that there are different types of leasehold? These differences are important because they affect the value of your home and how attractive it is to buyers.

Many people think that leasehold is a single, fixed system. In reality, there are three main types: perpetual leasehold, long-term leasehold and leasehold that has been bought out (for a certain period of time). Each type has its own rules and consequences for the buyer.

• Continuous leasehold: with continuous leasehold, the right to the land is temporary. It often applies for 50 or 100 years. At the end of that period, the municipality may redefine the conditions. The ground rent (the annual fee) may then increase significantly. This creates uncertainty for buyers. They do not know what they will have to pay in the future. And that uncertainty can influence their interest or the offer they make. If you want to sell your house in Amsterdam and there is a continuing leasehold, it is therefore important to know when the right expires and what the current conditions are.
• Perpetual leasehold: for a few years now, the municipality of Amsterdam has also been offering perpetual leasehold. This provides peace of mind and clarity. The conditions are set once and do not change thereafter. You can choose whether to pay the ground rent in a lump sum or continue to pay annually. This is attractive to buyers because they know exactly where they stand. That is why more and more sellers are choosing to switch to this system before the sale. Especially if you are selling your house in Amsterdam, this can make all the difference.
• Lump sum payment: sometimes the ground rent has already been paid off for a longer period of time. This means that there are no annual costs for the time being. For example, until the year 2054. After that, the municipality can reassess the ground rent, unless you have already switched to perpetual ground rent. Buyers often like a long buy-out period. It almost feels like the leasehold doesn't exist, even though it's still there legally.

What does this mean for you as a seller?

Anyone selling a house in Amsterdam must be able to clearly explain the leasehold situation. Which type of leasehold applies? Has a buy-out been made? What does the buyer pay now and in the future? By presenting this information clearly, you remove doubts and increase confidence. The clearer the story, the greater the chance of a successful sale.

Are you unsure about your leasehold situation? Ask a real estate agent for advice or check the leasehold portal of the municipality of Amsterdam. Especially if you are considering selling your house, it is wise to have this in order.

How does ground rent affect the sale value when selling a house in Amsterdam?

When selling a house in Amsterdam, ground rent is often one of the first topics that comes up with potential buyers. And rightly so: ground rent has a direct impact on the value of your home and its saleability. But what exactly does it do to the price, and how can you, as a seller, respond to this in a smart way?

Buyers take a critical look at leasehold

For many home buyers, leasehold is an unfamiliar phenomenon. Buyers from outside Amsterdam in particular are put off by the idea of buying a house without owning the land underneath it. This mistrust can lead to homes with leasehold being seen as “less attractive”, which can put pressure on the selling price.

Anyone selling a house in Amsterdam with a leasehold should therefore be aware of this psychological barrier among buyers.

Three factors that influence value

Leasehold affects the sale value in several ways. The most important factors are:

1. Has the leasehold been bought out or not? Bought out until a certain date: this is seen as positive by buyers. There are no costs involved for the time being. Ongoing ground rent: monthly or annual payment that the buyer must take over. This is often seen as a disadvantage and can lead to negotiations. 
2. Duration of the leasehold right. If the right still has decades to run (e.g. until 2060 or beyond), this feels relatively secure for buyers. Does it expire within 10-15 years? Then there is a chance that the ground rent will be revised, which entails uncertainty and risk and therefore affects the value.
3. Switch to perpetual leasehold. Have you already made the switch or is there an offer on the table? Then you are providing clarity to the buyer. Those who have not yet done so offer less certainty, which may depress the price.

Figures: how big is the difference?

Although exact differences vary per property type and neighbourhood, practical examples show that a property with ongoing ground rent is sold on average 3-6% lower than a comparable property with fully paid-off ground rent. In the higher price ranges, this can quickly amount to tens of thousands of pounds.

In short, when selling a house in Amsterdam, ground rent is not only a legal issue, but it is also worth hard cash. 

What can you do as a seller?

Fortunately, as a seller, you can influence how ground rent is perceived:

• Don't let it feel like a “disadvantage”: communicate clearly and explain that it is a common system in Amsterdam.
• Have a ground lease analysis drawn up: show what the situation is and what options are available (such as redemption or transfer).
• Consider redemption before sale: if you redeem the ground rent, you increase the attractiveness of the property and may be able to raise the asking price.  

What are the risks for buyers and how can you eliminate them as a seller?

If you want to sell a house in Amsterdam with a leasehold, it is crucial to understand what objections buyers may have. For many potential buyers, leasehold feels like a risk, especially if they do not know exactly what it entails. Uncertainty often acts as a deterrent. But with the right preparation, you can easily eliminate these objections.

Why do buyers sometimes see leasehold as a risk?

Essentially, it comes down to two things: uncertainty and additional costs. Below are the most common concerns of buyers:

1. Current or rising ground rent: the buyer takes on the obligation to pay annual ground rent. If this has not been bought out, it constitutes an additional monthly expense. Added to this is the fear that the ground rent will rise significantly in the future, especially if the leasehold expires in the foreseeable future.
2. Revision of leasehold conditions: when a leasehold term expires (e.g. after 50 years), the municipality may revise the conditions and ground rent. This can lead to unexpectedly high costs, which buyers are wary of.
3. Complexity and lack of understanding: not all buyers understand how leasehold works. This lack of knowledge causes doubt. ‘Am I really buying something?’ is a question that often arises, especially among people from outside the city.
4. Loss of mortgage capacity: if the ground rent is high, the bank may be less willing to finance the purchase because the housing costs increase. This limits the number of buyers who are eligible for your property.  

How can you eliminate these risks as a seller?

Fortunately, as a seller, you have plenty of options for neutralising these objections. Selling a house in Amsterdam with a ground lease is easier when you consider the following actions:

1. Transparency is key: provide your estate agent and the buyer with a complete and clear leasehold file. This includes: the leasehold deed, proof of redemption or the amount of the ground rent, the date of review or expiry of the right and, if applicable, the offer to switch to a perpetual leasehold. By putting everything on the table, you build trust.
2. Consider redemption or transfer before sale: if you redeem the ground rent or transfer to perpetual leasehold before selling the house, you will remove a large part of the concerns for buyers. This increases the chance of sale and often the value.
3. Explain the leasehold in your sales text: use the property presentation (on Funda or in the brochure) to explain the leasehold in a positive and simple way. Show that it is common practice in Amsterdam and that the conditions are well regulated.
4. Hire a real estate agent who understands leasehold: a good sales agent in Amsterdam knows the leasehold rules inside out. He or she can determine the right strategy, reassure potential buyers and negotiate with knowledge of the facts. 

Leasehold does not have to be an obstacle to selling

Selling a house in Amsterdam with leasehold does not have to be a stumbling block, as long as you are well prepared and know what to look out for. By communicating clearly about the leasehold conditions, actively thinking along with potential buyers and eliminating risks where possible, you can significantly increase your chances of selling. Buyers appreciate transparency, and the better you show that everything is well organised, the stronger your position in the market.

At Amstelland Makelaars, we have years of experience in selling homes with and without leasehold in Amsterdam. We know exactly how to present your home in the best possible light and ensure that leasehold is not a barrier but rather a clear part of the sales story.

Do you want to sell your house in Amsterdam and want to be sure that everything related to ground lease is properly arranged? Feel free to contact us for a no-obligation consultation. We are happy to help you on your way to a successful sale.