The rules for the annual rent increase in 2021

13-4-2021 — 

Rent increase in the free sector in the next 3 years; maximum inflation + 1%
As we already wrote in November 2020 there was an initiative bill to introduce a maximum rent increase by 2021 for the next 3 years. The bill has been approved: the rents of housing in the free sector may increase in 2021 at the maximum with inflation + 1% = 2.4%. It has never happened before that rent increases in the free sector were restrained by politics!

In addition, tenants in the private sector will soon also be able to turn to the Tenancy Committee in disputes with their landlord. Until now, this was reserved for tenants in the social sector.

Rents in the social sector are frozen
Rents in the social sector will even be frozen in 2021, in other words a 0% rent increase. This means that the usual income-related rent increase in the social sector is also NOT permitted.

When social or free sector?
In 2021, the upper limit for the social sector is set at € 752.33 basic rent. If your basic rent is above that and your home has more than 145 points, you can rent out in the free sector. Incidentally, this upper limit is determined annually. The upper limit of the moment of start of the lease is decisive. During a current lease agreement, a house cannot switch from the social sector into the free sector.

How is a rent increase calculated?
The rent increase is only calculated on the basic rent, not on additional supplies such as service costs or gas, water and light. In the Netherlands, it is customary to implement the rent increase in July. You may deviate from this, provided you increase it no more than once every 12 months.

To increase the rent this year or not?
Rents in the greater Amsterdam region have fallen for the first time in a long time since the Corona crisis; due to the absence of expats, there are a lot more listings of rental properties and less demand. If your tenant already pays a rent in line with the market prices and you decide to implement the permitted maximum rent increase, the tenant can decide to look for another home that is more affordable. And that is currently easier to find than before the Corona crisis.

Do you have a nice tenant that you would like to keep? Then be careful with a rent increase that potentially causes the tenant to leave your home. After all, you have to incur costs again to find a new tenant, there is a chance of vacancy and, moreover, possibly a lower rent than your current tenant pays. In some cases it may therefore be more convenient NOT to implement a rent increase this year or a lower percentage than allowed.
Also let your tenant know if you are not going to raise. This creates clarity for the tenant, but also shows that you are involved with the tenant and his/her possibly uncertain situation.

Who will implement the rent increase?
If Home of Orange is the financial manager of your home, we also take care of the annual rent increase for the landlord. We will then contact you shortly about this. If you are the financial manager of the property yourself, you are responsible for this yourself.

Picture by Nattanan Kanchanaprat via Pixabay