Pay off the leasehold in perpetuity

Leasehold is the right to use land owned by the municipality for a certain period in return for paying ground rent. The municipality then remains the owner of the land.

Reasons for wanting to pay off the ground rent are:

• You will no longer have to pay ground rent.
• You no longer receive a revision of the ground rent percentage every 5 years.

To pay off the leasehold in perpetuity, the municipality has stipulated a number of conditions which you must take into account:

• Leasehold contract after 1986: To pay off your ground rent payment, you must have a leasehold contract concluded after 1986.
• Leasehold contract before 1986: Do you have a leasehold contract from before 1986 and does you leasehold contract expire within 15 years? If so, you must first apply for a reissue on request. For more information, visit Begin link: Leasehold contract expires within 15 years, end link. .

• You make a one-time payment for the land value of your ground lease right and a one-time amount to pay off the administration fees plus any loss of interest. For the rates, visit Begin link: Ground lease conditions, end link. .
• The buyout will again be recorded in a notarial act or an obligatory agreement because your leasehold contract will change. The leaseholder pays the costs of this act/agreement.
• If you finance the buyout of the ground rent as part of your mortgage, you may deduct the interest over the settlement amount in your tax return.

The municipality will investigate whether your ground lease right is eligible to be paid off. If so, you will receive an offer and information about the procedure and the costs. This takes 4 to 6 weeks.

Would you like to learn more about ground lease (erfpacht)? Go to Begin link: Ground lease, end link. .