The new Dutch government has made increasing the housing supply the “top priority” of its four-year term, cutting the property transfer tax for investors from 8% to 7% and reiterating earlier government pledges to build 100,000 new homes a year. It has also pledged to shape legislation to improve the residential investment climate.

Not enough new homes are being built in the Netherlands. Photo: Depositphotos.com

The next Dutch coalition, a centre-right minority administration which will rely on the support of other parties to get legislation through both houses of parliament, says long procedures for permits, affordability demands and the tax climate have worked against developers and investors for years.

“Legislation and regulation, as well as the tax climate in the rental market, will be shaped in such a way that the investment climate improves and the supply of rental homes can increase again,” the coalition agreement states. Developers and investors have campaigned for years for a stable approach to the market.

The agreement says the housing crisis “demands an honest response to the size and causes. We are opting for a three-pronged approach – more construction, affordable homes and less interference.”

The plans include the development of “at least” 30 new major residential areas, which will either be new towns or extensions to existing ones. It is not clear from the document if that total includes the 17 large developments earmarked by the outgoing administration.

Slashing red tape

Red tape, complex planning procedures and the right to object to developments will also be cut back and made faster. Planning and construction requirements will be set at a national level so that local authorities can no longer impose their own, stricter regulations. Prefabricated construction will also be encouraged and scaled up, and universities will be encouraged to provide more accommodation for students and foreign staff.

The transaction tax for investors who buy residential property in the Netherlands will go down from 8% to 7% of the sales price in an effort to encourage international investors, and the move has been welcomed by developers. However, the reduction will only apply to rental and holiday property and remains 10.4% for office and retail investments.

More investment needed

Dutch developers’ organisation NEPROM has welcomed the speed at which the new administration has been put together but says it still has concerns about the housing market strategy and the government’s own investment plans, which it says fall short of what is needed.

In addition, not enough is being done to improve the investment climate, NEPROM says. “Delivering enough housing requires the involvement of housing associations, institutional investors, private landlords and international capital,” the developers’ organisation said.

“Much-needed changes to the rent control system are still lacking, and the investment climate for both private and foreign investors has not been strengthened. This is undermining the willingness to invest, which is essential to meeting housing construction targets in both the short and long term.”

International investors

Real estate investors lobby group IVBN also criticised the new government’s decision to invest €2 billion a year in housing and infrastructure, rather than the €3 to €5 billion the industry estimates as necessary.

The plans do not make it clear what the new government will do to stimulate the use of private capital in property development and there are no “concrete plans to attract national and international capital”, the IVBN said.

Because the new administration will not control both houses of parliament, it will have to make deals with opposition parties to ensure its plans to boost the supply of housing win approval. The name of the new housing minister will be released in the coming few days.