Q&A – Give me back my deposit!

On April 23, 2010, In Getting your deposit back, Living in Rotterdam, Rental Rotterdam, Security Deposits, By admin

Question:

I rented an apartment in Rotterdam for 3 months through Rots Vast. I extended the contract 4 more months through the landlord and she told me tell her one month in advance. I told her again on April 12th, that I would be leaving and she says she’s keeping half my deposit because I didn’t give advance notice (although I told her in January I was leaving in April). She is also now saying that fixing the toilet is my expense. No inspection check at beginning and none planned for end (29th Apr). Advice?

Answer:

There are several questions in your mail. Most rental contracts are explicit about when notice can be given and how that notice must be communicated. A typical clause might state something like ‘you may terminate the rental agreement after an initial period of so many months (often 6) with a notice period of one calendar month. Furthermore, there is often the requirement to communicate that notice by registered letter to the owner and/or their agent. Of course, this is the formal side and a not every owner sticks to the letter of the contact accepting, instead, notice by email, phone or post-it. Fixing the toilet at your expense sounds unreasonable but the owner may cite cause. If, for example, you washing machine breaks because your have stuffed 20KG in instead of the 5KG limit, then you should pay. It a washing machine breaks because it’s a classic 1972 model and its best days are long-gone, then this would typically be an expense for the owner. I have answered several other questions in Expatica’s Ask-the-Expert section on reclaiming deposits and providing notice. Please search further in this blog for additional tactics on handling deposit recovery.

 
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Q&A – Passive Smoker

On April 15, 2010, In Property rental, Rental Rotterdam, By admin

Question:

I’ve read some of your articles, I’m living in Rotterdam can I find an office like wswonen here in rotterdam. I rent a room and share WC bathroom and kitchen with another student. My landladies brother has just moved in to stay, a strong smoker and 50 years old. No sign of this in my rental contract. Where can I get valuable advice? thanks in advance, Veronica.

Answer:

Tricky one and we’re not lawyers. You could try the following in the following order:

  1. Try enquiring at someone like Access as they may at least be able to tell you your legal position without charging you a fee (they are a voluntary organisation)
  2. Explain to your landlady your aversion to passive smoking and request that smoking occur only outside
  3. If you have a strong legal position, then you could follow up with the threat of legal action (bit extreme but it is an option)
  4. If  you have a weak legal position, then you can either accept it or you’ll have to consider moving.

Good luck finding your way through the smoke.

 
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Q&A – Deposit Return

On April 14, 2010, In Getting your deposit back, Paying a security deposit, Property rental, Security Deposits, By admin

Question:

We were renting a furnished apartment in Delft for a year. At the end an agent checked the apartment twice. It was perfect. Two weeks later the landlord found a stain in the mattress. He suggested to buy a new one (the prize for the new mattress is 1875 euro). Our suggestion was to chemically clean the inner part of the mattress and drape it with a new cover. The apartment was not new at the beginning. Is our obligation to buy a new one? Two months after they still keep 3000 eur of our deposit. Thanks in advance, Ivona

Answer:

We receive a lot of questions on deposits. It’s always tricky to discuss a specific situation but here are some thoughts. At the final inspection, there is typically a sign-off. Any items that are broken, in need of repair, scratched, dirty…etc. are documented. It appears that this did not happen in your case. The most discussion is always generated by cleanliness. The classic scenario is that the apartment (or item in question) was not clean at the start of the tenancy and therefore there is no obligation to return is clean(er) at the end. Although possibly too late now – a good check-out starts with a good check-in. There are various suggestions to questions on returning deposits in responses to other questions in this blog (search on ‘deposit’ and in the Expatica – Ask the Expert (Housing section). Good luck in resolving this.

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The ‘Other’ Costs of Renting an Apartment

On April 12, 2010, In Property rental, Rental Amsterdam, By admin

Not really hidden, but not always obvious

When you rent an apartment, you typically focus on the main cost: the rent. Although this is THE main cost, there are other taxes and charges that either fall on your shoulders of that of the property owner.

If you are unaware of these, you can have a bit of a surprise sometime during the year. So, with the goal of removing surprises, here is a quick overview of how this looks in Amsterdam (other cities in the Netherlands will have their own version).

  • Verontreinigingsheffing: This is a pollution levy for direct drainage of effluent into surface water of an independent residence not connected to sewer system. For single occupancy, this is Euro 53 per year and if there is more than one occupant, Euro 159 per year (the OCCUPANT pays this to WATERNET).
  • Watersysteemheffing ingezetenen: This is a levy for use of public water system of independent residence. A mere Euro 81 per year (the OCCUPANT pays this to WATERNET).
  • Afvalstoffenheffng: A levy for refuse collection. Different rates apply for different parts of the city. Amsterdam Centrum charges Euro 221 per year for single occupancy and Euro 295 per year for more than one occupant (the OCCUPANT pays this to GEMEENTE AMSTERDAM).
  • Rioolheffng: A levy for connection to sewer system. A fixed charge of EUro 145.46 per year (the OCCUPANT pays this to GEMEENTE AMSTERDAM).
  • Watersysteemheffing gebouwd: A levy for use of public water system of independent residence. This is charged at 0.012778% of the WOZ-value (the OCCUPANT pays this to WATERNET).
  • Onroerende-zaakbelasting: Property tax charged at 0.05287% of assessed property value per year (the OCCUPANT pays this to GEMEENTE AMSTERDAM).
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Decision time – sell or rent?

On April 9, 2010, In Selling a property, By admin

Should I sell or should I rent now? (I really want to know now)

That’s the dilemma. If you are an owner looking to sell you probably have a reason… moving elsewhere within The Netherlands, your job is moving to Brazil. Should you sell therefore sooner rather than later and be done with your real estate foray into the Dutch market? On the other hand there are tentative signs of recovery in the housing market – depending on which soothsayer you believe – which makes you wonder if hanging on for a while will get you a better sale price. Of course, this states the situation too simply and other obvious and clandestine forces are also working their effect.

Here are a couple of aspects to keep in mind:

  • Sun: Spring has sprung. It’s sunnier. OK, it’s sunnier slightly more often meaning your property – for sale or rent – is going to look it’s best. We are experiencing a significant upswing in the number of listings for sale. This reinforces that feeling of increased confidence.
  • Buyers: Of course, if you are selling you need a buyer and a buyer usually needs a mortgage. Banks will still lend but not to everybody, under tighter conditions, and there’s always the question of interest rates which are anticipated to increase mid-year.
  • The ol’ financial crisis: Governments all over the planet are looking at ways to reduce their deficits. Brainy people regularly meet to see where savings can be made or taxes sneaked in. In the Netherlands, one of the proposals on the table is to phase out the mortgage interest relief. This is making prosective buyers anxious. The VVD (one of the major Dutch political parties) proposes, for example, phasing down the interest relief to 30% starting in 2014 and spreading this over 30 years. However, it is not set in stone and so potential buyers are nervous that a house they can afford now may become unaffordable later. In other words, they delay their purchase decision and await clarity.
  • Rules: If you have a property in Amsterdam and are considering renting it, you need to understand what you can legally charge a tenant taking into account the points system and the local rules. In many cases, owners find that following the rules will mean they cannot legally rent out their property for an amount that even covers their costs. Understanding these rules is also critical if you are considering buying a property that you may later rent out. Making incorrect assupmtions can be expensive.

Having both a rental operation and a property broker within Perfect Group led us to create Perfect Base. This is a product that allows an owner to rent out a property via Perfect Housing while still offering it for sale via Perfect Real Estate. The trick is to offer a short, fixed term rental contract for reasonable rent while making the tenant aware that they must cooperate with viewings related to sale (i.e. keep the place tidy, venitlated, clean and generally representative). Perfect Base has proved very effective and has lead to a significant increase in sale listings for owners needing a rental income while their property is offered for sale. Furthermore, because their is a rental income, an owner has a little more time to wait for fair offer rather than panicking and accepting the first offer.

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Expat Q&A – Buying property in The Netherlands

On April 5, 2010, In Buying a Property, Property buying costs, By admin

Buying property in The Netherlands – typical questions

houseWe get a lot of questions from expats (you know, non-Dutch nationals who have found themselves in The Netherlands) regarding buying a home. Answers to some of the most common concerns are provided below but… make sure you consult a financial advisor before making commitments (especially if you are required to sign anything!).

OK – caveats in place. Here come the Q&A.

As an expat, am I allowed to deduct my mortgage interest payment?

TaxEveryone who pays income tax in the Netherlands has the right to fully deduct the interest paid over the mortgage on their primary residence. The amount that is returned from the tax authorities is based on the income tax that you pay. If you pay, for example, 52% income tax, you will receive 52% of the interest back that you paid. If you pay 42% income tax, you will receive 42% of the interest back. Because expats with the 30% ruling may pay a lower tax rate, they may also be eligible for less deduction.

While property owners in The Netherlands love the mortgage interest deduction, politicians have been discussing phasing this out. The recent financial crisis has given the phase-out lobby more momentum as governments try to figure out how they can sting us for more. So, for now, we’re all fine. Keep in mind though that this deduction may be gradually phased out over a number of years.

What happens when I sell my house?

When you sell a house in the Netherlands, you must repay the mortgage (over which there will be no penalty). If you are selling a home that is your primary residence, you do not have to pay tax over any profit you make on the sale. However, if you buy a new home, you are expected to invest the profits from the sale of your original home in the purchase or renovation of the new property. If you choose not to, the interest you pay over the ‘additional’ part of your mortgage (the part that is not offset by the profits from the sale of your original home) is not tax deductible.

If you are selling a commercial property or a property that is not your primary residence, any profit from the sale will be taxed at 1,2%. This is the same rate that the property value, minus any loans, is taxed at on a yearly basis while still in the owner’s possession. However, bear in mind that the first EUR 20.000 of an individual’s capital assets is tax free in the Netherlands.

Am I allowed to rent out my home?

For rentIf you decide to rent out your home, you must first receive written permission from your mortgage provider. This is (nearly always) written into the boiler-plate of your mortgage agreement. In general, most banks are reluctant to give permission. If your bank does decide to allow you to rent your property, be aware that interest repayments on your mortgage are no longer deductible, but any rental income you receive is tax-free. As with other assets, the value of the house minus the mortgage amount will be taxed at the standard wealth tax rate of 1,2% (30% over 4% of the value), with the first EUR 20.000 of your total assets being tax-free.

In practice, there is a gray area around getting permission from your bank to rent out a property on which there is a mortgage. Knowing that a bank is unlikely to say ‘yes’ to your request to rent out, many owners simply do not ask. Instead, they just do it. Providing the mortgage commitments  are met each month, owners figure that the bank may not even know.

However, if you rely on the rental payments to pay your mortgage and are unable to meet your obligations because you have insufficient rental income, they you are in BIG TROUBLE in all events and even BIGGER TROUBLE if you did not ask for permission in the first case.

Although no one working for a bank would ever admit this, there is also a feeling that banks would be disadvantaged by a formal request to rent out a property on which a mortgage rests. In other words, they ‘know’ but prefer not to ‘know’ formally. In many cases, the person seeking permission may be looking to buy a second property somewhere else and hang on the first one as an investment. If the bank denies permission to rent out the first property, then the owner may be forced to sell and the bank would loose the opportunity to broker a another product. Yes – this all sounds a bit odd.

You can find more information about the tax implications of purchasing a home here. For more information on the buying process, feel free to contact Johan Grijzenhout of Perfect Real Esate.

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Apartment prices in Rotterdam

On April 2, 2010, In Living in Rotterdam, Rental Rotterdam, By admin

The cost of living in Rotterdam

There a lot to be said for and about Rotterdam – one of the most dynamic and buzzing cities in The Netherlands. But what does it cost to live there? The overview below gives indicative prices and some examples of great apartments that are fairly priced.

Apartments below Euro 1200 per month

  • West Kruiskade: In the middle of the China town part of Rotterdam. Very close to the centre, central station and other facilities. Good public transport connections.
  • Goudsesingel: Good area with good connection to the centre (tram and metro close-by). Easy access by public transport to the Erasmus University. The highway A16 is close by.
  • Nieuwe Binnenweg: This apartment is in the multi culture part of Rotterdam. The Nieuwe Binnenweg is a street that has a lot of international shops. Again the city centre is close by and easy to access by tram. This apartment is close by to the Erasmus Medical Centre (Erasmus MC).

Apartments between Euro 1200 and – Euro 1600

  • Kapelstraat: This propery is located in the most dynamic part of Rotterdam -The Lloydkwartier. An area close to the center and harbor of Rotterdam, but with a unique character.
  • Everaartstraat: Prins Alexander is an area on the outskirts of Rotterdam. It is newly developed and modern. It offers excellent public transport facilities such as metro, bus and train. The Alexander polder (reclaimed lowlands) offers a number of large shopping malls.
  • Graaf Florisstraat: Nice apartment in a cozy area. The centre is for about 5 minutes away. Close by the bus and trams which go to the central station and city centre.

Apartments above € 1600

  • Jufferstraat (various apartments available): One of the skycrapers of the centre in Rotterdam. The building, called Scheepmakerstoren, contains 26 storeys. The Jufferstraat in the wijnhaven area is, ofcourse, in the centre of Rotterdam. Close to the beautifull ‘Maasboulevard’ and the ‘Erasmusbrug’. We have a different and good, luxurious apartments in the Scheepmakerstoren.
  • Gordonstraat: This property is located in (the) Schiedam. Schiedam is a city and municipality in the province of South Holland in the Netherlands and is part of the Rotterdam metropolitan area. It is known for jenever (gin), its historical center with its canals, and the tallest old windmills in the world.
  • Landverhuizersplein: In the new built well known ‘Monte Video’ tower. One of the highest skycrapers in the city. Located on the ‘Kop van Zuid’, close to the famous ‘Erasmusbrug’ and ‘Hotel New York’.
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