The right of emphyteusis (also called emphyteusis right or leasehold right) is the right to hold and use an immovable property owned by another person. So in that respect, it is very similar to rent. The leasehold right is a register property, so it is in principle transferable, and it can be mortgaged.
Leasehold is mostly applied by municipalities. The municipality of Rotterdam also did so a lot, although it is now moving back to leasehold conversion to full ownership For the ground leaseholder, ground lease has the advantage of having more control over the land, especially when the ground lease right is temporary.
An emphyteusis right is established by notarial deed. A copy of that deed is then registered in the public registers. The deed of establishment sets out the agreements between leaseholder and ground leaseholder. The parties are free to determine the duration of the ground lease, which may even be perpetual. Upon establishment of the leasehold right, the leaseholder generally owes a fee (the canon). This can be a one-off fee or a periodic one, which can then be redeemed for a certain period of time.
If you acquire a leasehold right, transfer tax is due. Not only on the amount paid at that time, but also on the capitalised value of the ground rent payable in the future. When you buy the leasehold right, you take over the obligation to pay it from the seller and this is considered part of the consideration.
For information on leasehold rights and the rights and obligations of the leaseholder and the leaseholder, please contact us. We will be happy to help you.
