Ground lease means the land remains the property of the municipality (or another landowner). You pay an annual canon for its use. In Amsterdam, about 80% of properties are on ground lease.
There are two systems: ongoing ground lease (canon is periodically revised, sometimes significantly increased) and perpetual ground lease (canon is fixed forever, can be bought off). Perpetual buyout is financially more advantageous long-term.
The costs can be significant. In Amsterdam the annual canon can range from €1,000 to €10,000+ depending on the land value and period. During revision the canon can suddenly triple.
When buying a ground lease property: check the lease contract, when the next revision is, and whether perpetual buyout is possible and what it costs. Include these costs in your total budget. Groundwerk flags ground lease automatically.
With ongoing (voortdurende) ground lease in Amsterdam, you can often switch to perpetual (eeuwigdurende) ground lease through the municipality's conversion scheme, usually on better terms than an individual buyout after revision. Ask your ground-lease notary or agent whether this is still available for the specific property.
Ground lease can affect resale value and financeability: some lenders apply stricter conditions or a lower maximum mortgage for properties with a short remaining lease period or an upcoming canon revision. Always ask about the remaining lease term and whether the canon has been bought off for that period.
Erfpacht is not only an Amsterdam phenomenon. The Hague, Utrecht, Rotterdam, Haarlem, Amstelveen and Diemen all carry a substantial share of municipal ground lease, and beyond that there is private ground lease — where the land belongs to an estate, a religious institution or an investor. Private ground lease is generally less favourable: the terms aren’t public, there is no municipal conversion scheme, and canon revisions often come with fewer protections.
Three questions you want answered for any leasehold property: is the canon fixed or subject to revision, when is the next revision, and has the canon been bought off — and if so, until when? 'Bought off' with no end date means something entirely different from 'bought off until 2041'. With a buyout that runs to a set year, you as buyer inherit the payment obligation that restarts afterwards, at a canon reassessed at that time.
A bought-off canon is not the same as no cost. With ongoing ground lease bought off to the end of the current period, a new canon is set at the end of that period based on the land value then applying. That mechanism is precisely what produced the jumps most of the horror stories are about in Amsterdam: not the annual indexation, but the revision at the end of a fifty-year period.
There is one tax consolation: the ground lease canon on your own home is deductible in box 1, just like mortgage interest. The lump sum to buy off perpetual ground lease is not — that counts as an investment in the property rather than a recurring charge. You can finance the buyout into your mortgage, in which case interest on that portion is deductible again. Have this calculated before choosing between buying off and paying annually.
Always request the deed of establishment and the applicable general terms, not just the latest canon invoice. Those general terms (in Amsterdam, for instance, AB1915, AB1934, AB1955, AB1966, AB1994, AB2000 or the perpetual system) determine your rights on revision, renovation and change of use. Two neighbours paying the same canon can sit under different terms and therefore carry a completely different risk.