Ground lease (erfpacht) in the Netherlands: how does it affect your mortgage?

You have found an apartment in Amsterdam. The location is perfect, the asking price fits your budget, and you are ready to arrange your mortgage. Then you notice a word in the property listing: erfpacht.

What does it mean? Do you actually own the home? Will you have to pay additional fees? And could it reduce the amount you can borrow?

A ground lease does not automatically prevent you from getting a Dutch mortgage. However, it can affect how much you can borrow, your monthly housing expenses, and whether a lender accepts the property.

For buyers unfamiliar with the Dutch housing market, understanding a ground lease before making an offer is essential.

This guide explains what erfpacht means, how Dutch mortgage lenders assess it, and which documents you should check before buying.

This article is written by Bart Kooijman, our mortgage advisor at OHAO, who helps expats and internationals navigate the Dutch mortgage and housing market. Want to discuss your situation? Contact us.

What is ground lease (erfpacht) in the Netherlands?

• Ground lease (erfpacht) is a legal right to use land owned by another party, often a municipality. The homeowner holds a transferable property right and may pay ground rent (canon) for the land. Ground lease conditions may influence mortgage affordability, property value, and future housing costs.

• In Amsterdam, the municipality owns the land beneath many residential properties, and the Amsterdam ground lease rules set out what applies when you buy one of them.

• A ground lease is different from renting an apartment. It is a registered property right that can generally be transferred when you sell and used as mortgage security.

• Amsterdam has used municipal ground leases since 1896, partly to limit land speculation and retain public influence over land use.

Important Dutch ground lease terms

Can you get a mortgage on a property with erfpacht?

Yes. Dutch lenders regularly finance properties with a municipal ground lease. However, ground rent, lease duration, and legal conditions can affect how much you can borrow.

Mortgage lenders typically need to establish three things:

• Who owns the land and issued the lease?

• Is ground rent payable, and how can it change?

• What are the duration and legal conditions of the ground lease?

The answers help determine whether the property meets the lender's requirements. Vereniging Eigen Huis sets out the main distinction in its guidance on whether you can you get a mortgage with erfpacht: municipal leases are generally financeable, while private leases are harder.

How much does a ground lease reduce your mortgage?

Ongoing ground rent can reduce how much you can borrow.

Mortgage lenders assess your income and relevant financial obligations to determine your maximum mortgage. ABN AMRO explains how erfpacht affects your mortgage in the same terms: the ground rent counts as an additional monthly commitment.

If you must pay ground rent, that obligation may reduce the income available for mortgage payments. Our guide to how the maximum mortgage is calculated explains the mechanics, and how much you can borrow in the Netherlands gives you the starting figure.

For mortgages with the National Mortgage Guarantee, the ground rent must be included as a financial obligation in the affordability assessment. NHG also applies separate criteria to certain erfpacht constructions, including requirements around transparency, predictable canon development, and the share of the property's value represented by the ground — the NHG requirements for ground lease set these out in full.

Example: comparing two apartments

Imagine you are considering two apartments with the same asking price.

Example: comparing two apartments

Imagine you are considering two apartments with the same asking price.

Apartment B has an additional €150 monthly housing obligation. This doesn't automatically mean your maximum mortgage drops by a fixed amount.

The actual reduction depends on your income, the mortgage interest rate, applicable lending rules, and the lender's calculation.

Before making an offer, ask your mortgage advisor to calculate your borrowing capacity using the property's actual ground lease conditions.

You can calculate your maximum mortgage as a starting point, bearing in mind that a standard calculator may not account for the ground rent of a specific property.

Municipal vs private ground lease: why lenders care

One of the first questions a lender may ask is who owns the land.

Municipal ground lease

Municipal ground lease is widespread in Amsterdam. The municipality owns the land, and the homeowner holds the ground lease right under established conditions.

Dutch mortgage lenders regularly finance these properties, subject to their acceptance requirements. ING, for example, publishes its conditions for mortgage financing with ground lease issued by a municipality, province, water board or national government. However, the current ground rent, future adjustments, and remaining lease period still matter.

Private ground lease

A private ground lease means a private party, rather than a municipality or other public authority, owns the land. These agreements can be harder to finance because their terms vary.

For example, a lender may be concerned about clauses that allow substantial increases in ground rent, restrict the homeowner's rights, or create uncertainty about the lease's continuation.

Some lenders require a notarial assessment of the agreement or compliance with recognised banking criteria.

The notary may review the lease term, rent adjustment provisions, contract changes, and the homeowner's legal protections. Notaris.nl explains the legal conditions of ground lease and what a buyer should establish before signing.

A private ground lease does not automatically mean your mortgage will be refused. But it is a reason to investigate lender acceptance before making an offer.

Why the remaining ground lease period matters

A property may have an attractive purchase price and low ground rent today, but the situation can change when the current lease period ends.

Under Amsterdam's continuous ground lease system, the ground rent is set for a period, commonly 50 or 75 years. At the end of that period, it can be reassessed under the applicable conditions.

Example: ground lease bought off until 2035

Imagine buying an apartment in 2026 where the ground rent has been bought off until 2035. For the next nine years, you may not need to pay periodic ground rent.

But what happens in 2035?

If the property remains under continuous ground lease and no future arrangement has been agreed, the ground rent may be recalculated.

The new amount could be significantly higher. This matters for both your future housing costs and the lender's assessment of the property.

When reviewing a property listing, don't just check whether erfpacht is currently paid off. Check until when, and what happens afterwards.

Continuous vs perpetual ground lease

Does perpetual ground lease mean you never pay again?

Not necessarily.

A perpetual ground lease provides greater certainty because the land value isn't reassessed at set intervals.

However, if you pay periodic ground rent, the amount can still increase through inflation adjustments.

If you have fully bought off the perpetual ground rent, you generally have no further periodic ground rent obligation under the existing arrangement, unless relevant changes to the property or agreement trigger additional costs.

In Amsterdam, owners under the continuous system can apply for switching to perpetual ground lease, which fixes the ground rent going forward.

Should you buy off your ground lease?

Buying off a ground lease means paying an agreed amount upfront to settle specified future ground rent obligations.

Whether it makes financial sense depends on the amount, your current ground rent, how long you plan to own the property, and your financing options.

For example, you may choose between continuing to pay annual ground rent or paying a lump sum to buy it off.

A buyout can provide greater certainty, but it also requires capital. If you finance the buyout with a mortgage, consider the additional borrowing costs and whether the lender will accept the arrangement.

Before deciding, compare the total financial consequences rather than assuming that buying off is always the best option.

Is ground rent tax-deductible?

Periodic ground rent for a qualifying owner-occupied home is generally deductible under Dutch income tax rules, alongside your mortgage tax deductions.

A lump-sum payment to buy off ground rent is not deductible in itself. Interest on a loan used to finance the buyout may be deductible, but only to the extent that the loan qualifies as eigenwoningschuld.

If you use savings or have an eigenwoningreserve, only the portion of the loan above that reserve may qualify. The Dutch Tax Administration sets out the position on ground rent tax deductions and which homeownership costs qualify.

Can a ground lease affect your property's resale value?

Yes. When you eventually sell your home, potential buyers and their mortgage lenders may review the same ground lease conditions.

A property with clear perpetual arrangements may offer greater certainty than one with an approaching reassessment date and unknown future ground rent.

This can influence buyer demand, valuation, and negotiations. However, there is no fixed percentage by which a ground lease reduces a property's market value.

The effect depends on the agreement, property characteristics, and local housing market.

What should you check before making an offer?

Investigate a ground lease before committing to a purchase, not just when arranging the mortgage afterwards.

Use this checklist:

1. Who owns the land? Is it the municipality or a private landowner?

2. What type of ground lease applies? Continuous, perpetual, or temporary?

3. How much is the current ground rent? Check the annual amount and payment frequency.

4. Has the ground rent been bought off? If so, until when?

5. When is the next reassessment date? This is especially important for a continuous ground lease.

6. Has a switch to a perpetual ground lease been agreed? Confirm the arrangement in the official documents.

7. Can the ground rent increase? Check the indexation and reassessment conditions.

8. What would a buyout cost? Request a quotation for the specific property.

9. Are there restrictions on the property? Review relevant conditions for renovations or changes in use.

10. Will the lender accept the agreement? Ask your mortgage advisor before bidding.

You can obtain relevant information through the municipality, your real estate agent, or notary. The Dutch Land Registry (Kadaster) also holds the official property and ground lease records, including registered deeds.

Do not overlook your financing clause

If the property has uncertain or complex ground lease conditions, it is especially important to understand the financing risks before making an offer.

A financing clause when buying a house (voorbehoud van financiering) can protect you if you cannot obtain the required mortgage, provided you meet its contractual conditions and deadlines.

What if you are buying an apartment with a ground lease and a VvE?

If you are buying an apartment, a ground lease may be only one of several ongoing housing expenses.

You may also pay a monthly contribution to the homeowners' association, and our guide to the VvE in the Netherlands explains how shared building costs and responsibilities work.

Your housing budget may therefore include:

• Mortgage payments.

• Ground rent.

• VvE contributions.

These are separate obligations, and you should consider all of them when comparing properties.

Frequently asked questions

Can you get a mortgage on a house with a ground lease?

Yes. Dutch lenders regularly finance properties with a municipal ground lease. Private ground lease agreements may require additional checks, and approval depends on the lender's conditions.

Can erfpacht reduce how much mortgage you can borrow?

It can. Periodic ground rent may be included in the mortgage affordability assessment, reducing the amount available for mortgage payments.

Is buying a property with erfpacht a bad idea?

Not necessarily. Many Dutch properties have a ground lease. The key factors are the lease terms, future payments, the remaining term, and lender acceptance.

Can a bank refuse a mortgage because of erfpacht?

Yes. A lender may refuse to finance a property if the ground lease agreement does not satisfy its legal or financial acceptance requirements.

Does a ground lease expire in Amsterdam?

It depends on the agreement. A continuous ground lease has recurring periods, while a perpetual ground lease has no recurring lease periods. Temporary ground lease arrangements may have an actual end date.

What happens when you buy off a ground lease?

You have paid the relevant ground rent obligation in advance. The ground lease right continues to exist, and the land does not automatically become your property.

Can you finance a ground lease buyout?

Potentially. Some lenders allow financing for a ground lease buyout, subject to the property's value, your borrowing capacity, and their lending conditions.