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Buying a house on erfpacht (ground lease): what it means

In a number of municipalities, such as Amsterdam, The Hague and Utrecht, many homes stand on leasehold land (erfpacht). You buy the house, but the land remains the property of someone else, usually the municipality. You pay a fee for this. A ground lease is not necessarily unfavourable, but it affects your monthly costs and sometimes the value of the property.

Updated · 2 min read

How does erfpacht work?

The landowner (the erfverpachter, or lessor) gives you (the erfpachter, or leaseholder) the right to use the land. In return you usually pay an annual fee: the canon (ground rent). The terms are set out in the ground lease deed (erfpachtakte) and in the lessor's general conditions (algemene bepalingen).

Key terms

  • Canon: the annual fee for using the land. It may be indexed every year.
  • Buying off (afkopen): paying the canon for a set period, or for ever, in a single payment. Your monthly costs then go down.
  • Tijdvak (term): the period for which the canon is fixed. At the end of a term, the canon can be recalculated, sometimes considerably higher.
  • Continuous or perpetual (voortdurend or eeuwigdurend): with a continuous ground lease the canon is revised each term; with a perpetual ground lease the arrangements are fixed for ever.
  • General conditions (algemene bepalingen): the lessor's rules, for example on what you may do with the land and when you need permission for a renovation.

What should you look out for as a buyer?

  • Has the canon been bought off, and until when? A bought-off term that expires soon may mean higher costs.
  • How high is the canon now, and how is it indexed or revised?
  • Which general conditions apply, and are you allowed to extend the property or change its designated use?
  • Does your mortgage lender accept the ground lease terms? Some terms affect how much you can borrow.
  • Does the municipality have a transition scheme, for example to a perpetual ground lease? Ask whether the seller has used it.

How do you find out?

Erfpacht is recorded in the ownership details of the plot at the Kadaster (the Dutch Land Registry). Ask the seller or estate agent for the ground lease deed, the general conditions and an up-to-date overview of the canon. If in doubt, the notary or a ground lease specialist can work out the consequences for you.

The property report shows the cadastral designation and the boundaries of the plot, but deliberately no ownership details. Whether the land is subject to a ground lease can be found in the seller's documents or at the Kadaster.

Sources

In the property report: Plot

See this for your own address.

Energy label, year of construction, foundation, permits, plot and surroundings of the house you want to buy, in one report. From official sources.

Or browse the sample property report first.

Further reading