With leasehold (erfpacht), you do not automatically buy the land beneath the home. You buy a leasehold right: the right to use the land and the home under certain conditions. So do not look only at the asking price and the current ground rent. Pay particular attention to the deeds, future costs and whether your lender accepts the leasehold right.
The statement “leasehold bought out” is not enough on its own. You need to know exactly what has been bought out, until what date this applies and which costs or new conditions may follow afterwards.
What do you buy with leasehold?
The land remains the property of the lessor. This could be a municipality, housing association or private individual. You receive a property right of use that is transferred through a civil-law notary. The deed establishing the leasehold determines how long the right lasts and which rights and obligations apply.
You may have to pay a fee for using the land: the ground rent. This may be paid monthly, every six months or annually, for example. The ground rent may also be bought out for a certain period or permanently.
Leasehold does not have to be a reason not to buy a home. It does mean that you need to review more documents to assess the value, housing costs and saleability than you would for a home on freehold land.
Read these documents before making a final offer
The property listing usually provides only a summary. The legally binding agreements are set out in notarial deeds and the conditions referred to in those deeds. Ask for at least:
- the seller’s current deed of transfer;
- the original deed establishing or granting the leasehold;
- all applicable general and special leasehold conditions;
- any later deeds covering amendments, extensions, buyouts or changes to another leasehold arrangement;
- an up-to-date statement of the ground rent, indexation and payment status;
- information about the remaining term and the next review date;
- for an apartment: the deed of division and relevant VvE documents.
A deed may refer to older general conditions that are not included with the sale documents. Ask a civil-law notary to establish whether the documents are complete and which version of the conditions applies to this home.
Check the current and future ground rent
A low ground rent means little if it is due to change soon. So record not only the amount the seller currently pays, but also:
- the payment frequency;
- the next indexation date;
- the formula or benchmark used for indexation;
- the end date of the current period;
- the date of the next ground rent review;
- how the ground rent or land value will be calculated at the review.
Indexation and review are not the same. Indexation is usually a periodic adjustment based on an agreed formula. At a review, the ground rent may be reassessed based on factors such as the current land value and the conditions that apply at that time. The financial increase may therefore be greater than with ordinary annual indexation.
Is the new ground rent still unknown? Do not treat this as a detail to deal with later. It can affect your monthly costs, maximum mortgage and offer.
What does ‘leasehold bought out’ mean?
Always ask for the exact end date and the underlying deed. A buyout can mean different things:
- the ground rent has only been bought out until the end of the current period;
- the ground rent has been bought out for a longer subsequent period;
- the ground rent obligation has been bought out permanently.
Separately, check how long the leasehold right itself lasts. Bought-out ground rent does not automatically mean that the right is perpetual or that no new costs will arise after the buyout period.
Amsterdam, for example, has both continuing and perpetual leasehold, as well as different types of buyout. You cannot simply apply that system to a home in another municipality or to private leasehold. The deed for the home remains decisive.
What restrictions can the conditions contain?
Leasehold conditions can determine how you may use the home and land. These may include a mandatory residential purpose or rules about:
- renovating or extending;
- letting the home;
- dividing the right or the home;
- maintaining the land and buildings;
- changing the use;
- transferring the home to a new owner.
The deed establishing the leasehold may state that the landowner’s consent is required for a transfer. Before completion, check whether this consent is required, whether it has been requested and under which conditions it will be granted.
Also ask for proof that there are no payment arrears. The law contains rules under which a buyer may, after the transfer, be jointly liable for ground rent that became due during the preceding five years. Ask the civil-law notary to check the payment status and the consequences for your purchase.
How does leasehold affect your mortgage?
Leasehold can have an impact in two ways. The ground rent counts as a housing cost and may therefore reduce your maximum borrowing capacity. The lender must also consider the leasehold right itself suitable as security.
Banks may assess matters including the term, transferability, ground rent arrangement, review method, termination conditions and the possibility of establishing a mortgage right. A mortgage fitting within the NHG rules does not automatically mean that every bank will accept the specific leasehold right.
Under the NHG standards for 2026, the ground rent is included in the total financing costs. If the ground rent starts within twelve months or is reviewed during that period, the new amount or a reasonable estimate may be relevant. Ask a mortgage adviser to check this before making an offer without a broad financing condition.
For older private leasehold, a notarial leasehold opinion may also be required. The KNB states that this opinion is issued only for private leasehold rights established before 1 January 2013. Ask your adviser and civil-law notary which assessment your lender requires.
Paying or buying out the ground rent?
Do not compare a buyout sum only with the gross annual ground rent. Also consider the length of the buyout period, your available savings, the interest if you finance the buyout and the effect on your monthly costs.
There is also a tax difference. Periodic ground rent payments for an owner-occupied home may be deductible. The buyout sum itself is not deductible. If you finance the buyout with a loan, the interest may, subject to conditions, fall within the owner-occupied home tax rules. The outcome also depends on your personal situation and factors such as the additional borrowing rules.
Practical steps for your purchase
- Collect all leasehold deeds, conditions and current ground rent information.
- Ask a civil-law notary to assess the term, buyout, permissions, arrears and restrictions on use.
- Ask a mortgage adviser to calculate the current and future ground rent and check whether your intended lender will accept the leasehold.
- Include the costs and risks in your estimate of the home’s value and how much to offer on a home.
- Use suitable purchase conditions if documents are missing, the new ground rent is unknown or it is not yet certain that the home can be financed.
So do not base your offer only on the current monthly costs or the words “ground rent bought out”. You are buying the leasehold right, including the agreements that apply later. Those agreements determine whether the home fits your budget and remains easy to finance when you sell it in the future.
