The Annual Inflation Adjustment
For tenants in the Netherlands' free rental sector (vrije sector), the most common mechanism for the annual rent increase is indexation (indexering). This is a process where the rent is adjusted based on a pre-agreed inflation metric, almost always the Consumer Price Index (Consumentenprijsindex - CPI) published by Statistics Netherlands (Centraal Bureau voor de Statistiek - CBS). A typical free-sector lease will contain an indexeringsclausule (indexation clause) specifying that the rent will be increased once per year. This method is intended to ensure that the rent's real value keeps pace with general economic inflation. However, the specifics of the calculation, the addition of extra surcharges, and the interplay with government-imposed caps make this a frequent source of confusion and disputes for tenants.
How the CPI Clause Works in Practice
The indexation clause in a rental contract usually states something like: "The rent will be adjusted annually on [e.g., July 1st], for the first time on [Date], in accordance with the percentage change of the CPI (All Households) figure, as published by the CBS. The rent will be increased by this percentage plus a surcharge (opslag) of X%." To calculate the new rent, the landlord takes the CPI figure from one period, compares it to the figure from the previous period to get a percentage, adds the contractual surcharge, and applies the total percentage increase to the current rent. A critical but often overlooked detail is which CPI figure the contract specifies. The CBS publishes figures monthly, so a well-drafted clause will clearly state the comparison period (e.g., 'the CPI of April of the current year compared to the CPI of April of the previous year'). A vaguely worded clause can be a recipe for disagreement.
The Surcharge (Opslag) and the All-Important Legal Cap
The most contentious part of the indexation clause is often the surcharge (opslag), an additional percentage increase on top of inflation that landlords include to guarantee a 'real' rent increase above inflation. This surcharge can be anywhere from 1% to as high as 5%. For years, this led to exorbitant annual rent hikes. However, the Dutch government has intervened to curb this. A law was passed that puts a legal cap on free-sector rent increases. The maximum permitted increase is now set as the lower of two figures: either inflation (CPI) + 1%, or the national average collective wage development + 1%. This law overrides the rental contract. If your contract allows for CPI + 3%, but the legal cap for the year is only CPI + 1%, then the landlord can only legally apply the CPI + 1% increase. Many tenants are not aware of this crucial protection and may accept an unlawfully high rent increase simply because it's 'in the contract'. It is the tenant's responsibility to verify the landlord's calculation against both the official CPI data and the current legal cap.
