The Index Ground Lease is a popular type of leasehold that gives you the opportunity to regain full ownership of the land at predetermined points in time using the corresponding repurchase formula.
You transfer the land, for which you receive a purchase sum of up to 70% of the market value in freehold. Subsequently, you immediately get to use the land for a period of 26 years on a leasehold basis. The Index Ground Lease gives you the option of buying back the bare ownership, which grants you full ownership of the land again.
Right of repurchase
You have a right of repurchase in the interim period at the end of the ground lease. This formula is stipulated in the lease contract. You determine the interim repurchase date when entering into the lease contract. You are not obliged to buy back the bare ownership.
Ground rent of 2.6%
As a ground lessee, you pay a ground rent of 2.6%. The ground rent will be indexed annually with the consumer price index of Statistics Netherlands (CBS).
This is what makes the Index Ground Lease unique
- Flexible as a result of two contractually defined repurchasing rights
- In principle, the fair value increase of the land goes to the ground lessee in the case of repurchasing
- A fixed ground rent percentage, whereby the ground rent amount is indexed every year