Erfpacht in Amsterdam: what to check before you buy

The house is yours. The ground under it belongs to the City of Amsterdam, and the city has an invoice cycle that can outlast your mortgage.

Erfpacht is a ground lease: the owner of a building holds the right to use land that belongs to someone else, in Amsterdam usually the municipality, and pays a canon for it. The city runs two systems, voortdurende erfpacht with a canon reset every 50 or 75 years, and eeuwigdurende erfpacht with a canon set once and indexed, and a buyer needs to know which one the deed carries.

What should you check in the deed before you bid?

The municipality's own buyer's page lists what to establish: whether the right is voortdurende or eeuwigdurende erfpacht, which Algemene Bepalingen apply, whether the canon has been bought off and if not what it costs, the end date of the current tijdvak, the land registry data such as surface and boundaries, and any payment arrears, which only notaries can request. The city says the data can be obtained through the agent, the notary or the valuer, or for a fee from the Kadaster.

The Kadaster, the Dutch land registry, explains that erfpacht shows up under "rechten" in its Eigendomsinformatie report, and that the agreements on the canon and the term are set out in the akte van vestiging that the notary registered. A copy of that deed can be ordered and arrives within two working days.

How do the two systems differ?

The city's page on whether to switch sets the two side by side. Under voortdurende erfpacht the land value is reassessed every 50 or 75 years and the canon adjusted to it; at the end of the tijdvak the city calculates a new canon from the WOZ value and canon percentage then in force. Under eeuwigdurende erfpacht the canon is set once, indexed each year with inflation, and can be bought off for good. The city warns that a mortgage in the last ten years of a tijdvak can be harder to obtain because of the uncertainty about the costs afterwards.

The indexation rules differ too. The voortdurende canon is adjusted with the Statistics Netherlands inflation figure minus one percentage point, the eeuwigdurende canon with the full inflation figure and never downwards. The minimum land price is 177 euros per square metre in the old system and 5 percent of the WOZ value in the new one, and the new system values 5,000 buurtstraten instead of 40 neighbourhoods.

What does the switch cost?

The same page explains the calculation. The new canon is based on the WOZ value of the year before the application, whose reference date lies a further year back, multiplied by a canon percentage that varies between 2.39 and 4.23 percent, less an overstapkorting of 35 percent, and adjusted with the buurtstraatquote of the application year. The eeuwigdurende canon only becomes payable after the current tijdvak ends, and the deed data must be complete and no arrears outstanding.

The canon percentages are set every quarter by the city executive from the average yield on government bonds plus a surcharge that depends on the chosen variant, the city states. Its worked example shows why the variant matters: on a land value of 100,000 euros, an annually indexed canon at 5.00 percent costs 5,000 euros in year one, a canon fixed for ten years at 6.26 percent costs 6,260 euros, and one fixed for 25 years at 6.50 percent costs 6,500 euros.

First year canon on a land value of 100,000 euros, city's worked example

Variant	Canon, year one (€)
Indexed annually (5.00%)		+5,000€
Fixed 10 years (6.26%)		+6,260€
Fixed 25 years (6.50%)		+6,500€

How many leases are reaching the end of their term?

The Rekenkamer Amsterdam, the city's audit office, reported in November 2019 that up to 220,000 municipal offers may have to be made over the coming 75 years as leases reach the end of their tijdvak, about 23,000 of them in the following decade. The audit office also recorded the same 2.39 to 4.23 percent canon band and noted that in 2012 82 percent of expert valuations came out better for the leaseholder than the city's figure.

The ground lease is one of two Amsterdam checks that a standard survey does not cover. The other is the foundation, covered in our guide to the funderingsonderzoek, and the survey itself is decoded in our guide to the bouwkundig rapport.

Find the end date of the tijdvak and whether the canon is bought off before you find the kitchen. AiMYNDi reads the deed and the sale documents and puts the canon, the system and the end date next to the asking price.