More Dutch rental properties are set to be put up for sale as landlords flee proposed regulations set to take force in 2025, according to De Telegraaf. 12 large real estate companies warned in a letter about the 2025 Tax Plan that a second wave of rental houses could be put up for sale given the new regulations. 

New regulations to target small, medium and large investors

According to the newspaper, many small investors and property owners put up their rentals for sale in 2023, as incentives to invest in the property market dwindled away, and now, medium and large investors are set to start doing the same. In 2025, changes to the law will mean that property investors, who often finance development projects through loans, will mean that investors will be limited when it comes to deducting interest on loans from corporation tax. 

At present, property developers can deduct up to 1 million euros in interest from their corporation tax per private company, but in the new 2025 tax plan, the 1 million euro threshold will be removed and investors will only be able to deduct up to 20 percent of their company profits.

Large property companies will be the most likely to sell 

This means that large property developers who take out big loans will be affected the most by the changes. Huib Boissevain, CEO of real estate investor Annexum, told De Telegraaf: “The sales will, therefore, be done by private companies, not just by small investors. But you also have many retirees who have, say, three apartments in a private company and are affected by this.”

Real estate advisor CBRE told the newspaper that they can already see the sales wave coming. “We are now just before the sales wave. That gets much worse when I see the requests we now receive at CBRE to do this. We see a strong withdrawal of investors, including foreign pension funds,” Frank Verwoerd of CBRE told De Telegraaf.

Rent regulation law set to get support from the Dutch senate

The news comes as the Dutch senate looks set to approve the new Affordable Rent Act, proposed by the outgoing Dutch Government. The new regulations are set to regulate mid-market rentals, and make properties more affordable for the thousands of people in Dutch cities that are on the hunt for somewhere to live. 

Despite this, the regulation has proven controversial, especially with property investors and developers. While the government’s intention is to make property more affordable, many developers argue that the proposals will mean that it becomes unprofitable for developers to create more housing, ultimately leading to a slowdown in the housing market.

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