New approach to setting maximum rents

The Cabinet has approved a proposal by housing minister Stef Blok to give valuations under the Immovable Property Act (WOZ) a prominent role in setting maximum rents. The adjustment of the housing valuation system (WWS) agreed in the national Housing Agreement will lead to a simpler system, in which a rental unit’s quality and location will be more accurately reflected in the maximum rent. This will help make the housing market function more efficiently.

In the current WWS valuation system, points are awarded on the basis of the number of square metres in a dwelling, its kitchen and sanitary facilities and its energy efficiency. The total number of points determines the maximum rent. This point system does not give sufficient weight to a dwelling’s desirability and location.

The government would now like to reflect a dwelling’s surroundings and its type (such as single-family home or block of flats) in the WWS by using the WOZ valuation. While maintaining lessors’ earning capacity, as stipulated in the Housing Agreement, the revised system will no longer award extra points to rental units in the ten regions where the housing market is tightest.

The proposed modifications will allow maximum rents to vary depending on the WOZ valuation. An increased maximum rent will not necessarily have any consequences for sitting tenants, because the actual rent they pay is often below the current maximum rent. In addition, rents may not be increased by more than the percentage set each year by law. A tenant will however be able to ask for a rent decrease if the new maximum rent is lower than the rent now being paid.

The government aims to introduce the new WWS on 1 July 2014. So far the modifications apply only to separate dwellings.