Parliament limits free sector rent increase to inflation or wage increase plus 1%

In the coming years, rents in the private sector may not rise faster than the collective labor agreement wages or inflation, plus one percentage point. The Tweede Kamer, the lower house of the Dutch parliament, adopted an amendment on Tuesday that stipulates this. The Cabinet’s bill only looked at collective labor agreement wages to determine the maximum rent increase.

The bill, which was also adopted, extends the ceiling that has applied to rents in the private sector since 2021 to May 2027. In the original law, the maximum rent increase was inflation plus 1 percent, but when inflation rose rapidly due to the war in Ukraine, the law was amended to choose the “lower of the two” - either wages or inflation. The Cabinet wanted to extend the ceiling but limit it to wages.

“I don’t think that is wise,” outgoing Minister Hugo de Jonge (Home Affairs) said last week about the amendment that has now been adopted. “Because inflation and wages are kind of dancing around each other.”

Wages and price increases have roughly followed the same trend over the years, De Jonge reasoned, but using the lower of the two ensures that rents in the private sector lag behind. That is “untenable in the long term” for landlords, the Minister wrote.

“Very happy that the Kamer supports our amendment,” MP Habtamu de Hoop (GroenLinks-PvdA) responded on X. He expects that the amendment he submitted with the NSC and ChristenUnie will pose “the least risk for the tenant.”