Amsterdam Housing: if so Desirable, why so Affordable?
Amsterdam is a very walkable cosmopolitan city. Real estate is more affordable than London's or Paris. According to squaremeter amsterdamm central Amsterdam property fetches 8800 euro per sqm. The rental regulations limit the construction of new for rental buildings, but the demographic pressure may have been lower in Amsterdam than in Paris where prices are now in the 10000 to 25000 euro range.
We are seeing flats selling for less than 400k while short term monthly rentals easily go towards 2500-4000 range. For long term rental, yields appear in the 6.8% to 4.3% for studio to 2br in Amsterdam. There is a disconnect between hotel and short term accomodation prices and buying prices.
image credit: wikicommons
Its real estate law strongly favors tenant, giving them the right to stay. Contracts are deemed to be unlimited in duration unless proper notice is delivered before the expiration of the first contract term (source global property guide).
- long term tenants see contracts updated with inflation only, can stay as long as they want
- city is cracking down on vacant flats
According to keycafe :
- short stay rentals rare 1 week to 6 month and require a permit
- holiday rentals are rented out a maximum of 30 days per year
- bed and breakfast can rent a maximum of 40% of the house,
Rental income tax
As per pwc Netherland uses a boxed income tax system (maybe to ensure that capital loss cannot offset employment income). Box 1 is employment income at 37%, Box 2 is income from substantial interest at 27%, Box 3 is investment income at 32%.
Rental Income tax is assessed at 31% on a theoretical rental yield of 4.5% on properties worth 70k to 1mln. This leads to a wealth tax of 1.5% assessed on all dutch based real estate. Capital gains tax unless property is used as part of a business, in which case, it is taxed at 31%.
There is a heavy segmentation between the rents asked for short term rentals and long terms rentals. Unlike London and Paris, buying prices appear lower still.
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