Owners in this situation face a doubling of their housing costs and can be pushed into financial difficulties. To avoid having to cope with such a double burden while you wait for the market to improve, you might want to consider renting out your old home temporarily. Temporary rentals may in fact be one way to get the housing market moving again.

However, there are a number of obstacles to renting out your old home.

Extensive protection for tenants

As a rule houses must be rented out indefinitely, so temporary contracts may not be legally valid.

Tax disadvantages for the landlord

A home rented out to a tenant falls under box 3 for income tax purposes. This has a number of consequences, for instance mortgage interest is no longer tax deductible.

The mortgage lender’s permission is often required

The terms and conditions of most mortgage lenders state that the mortgaged home must not be rented out. This is because the value of the collateral will fall if the home has a tenant, which in turn is prejudicial to the bank’s interests. Banks are reluctant to grant permission because long-term tenancies diminish the execution value, and if the execution value is less than the mortgage debt, permission will without a doubt be refused.

Permission from the owners’ association may be necessary

In some cases permission needs to be obtained from the owners’ association.

Whether this is necessary can be ascertained by consulting the regulations of the owners’ association or the deed of division.

The owner/landlord must bear the following in mind when renting out a property on a temporary basis:

To rent out a home temporarily you will need a permit from the municipal executive (College van Burgemeester & Wethouders).

A permit is valid for up to two years and can be extended for a maximum of five years.

The tenancy period must be at least six months with a notice period of at least three months for the landlord and at least one month for the tenant.

It is also important to comply strictly with procedural requirements and deadlines, otherwise the landlord runs the risk of the ordinary tenant protection rules coming into play.

The government is aware that longer-term rentals of mortgaged properties may form a barrier to house sales. Temporary home rentals could therefore be one way to get the stagnating housing market moving again.

Eberhard van der Laan, Minister for Housing, Communities and Integration, has said that the absence of protection for short-term tenants under the Vacant Properties Act may help persuade the banks to permit such temporary arrangements. The Minister is planning to consult the banks to discuss this issue.