Supreme Court rules on the landlord levy in relation to income-related rent increases and co-ownership

Case

On 26 June 2026, the Supreme Court delivered judgment in a multi-party litigation case involving 56 interested parties, which is part of a broader cluster of landlord levy cases. The key question in these proceedings was whether the landlord levy for the years 2019, 2020 and 2021 can remain in effect. During those years, the interested parties paid the landlord levy on self-assessment in respect of properties they owned.

The interested parties argued, among other things, that the landlord levy is so closely linked to the income-related rent increase that the levy should be regarded as a skimming off of the additional rental income landlords were able to obtain through that rent increase. The interested parties argued that the levy should not remain in effect since the landlord levy does not correspond to the additional rental income actually realised.

On top of that, the interested parties took the position that there was unequal treatment in 2019. In that year, the landlord levy was payable on properties held in full ownership but not on properties held in co-ownership. This was the result of an earlier Supreme Court judgement concerning the tax system for co-ownership.

The interested parties also invoked the principle of equality in relation to the increase in the tax-free threshold from ten to fifty rental properties as at 1 January 2018. According to the interested parties, this increase leads to an unjustified distinction between landlords with more than fifty rental properties and those with fifty or fewer.

Court of Appeal’s judgment

The Arnhem-Leeuwarden Court of Appeal ruled that the income-related rent increase is legally unrelated to the landlord levy. According to the Court of Appeal, the introduction of the income-related rent increase was not a prerequisite for the introduction of the landlord levy. Nor did the legislature intend to establish a formal link between any income-related rent increase and the landlord levy.

The Court of Appeal ruled that – with regard to the levy in cases of co-ownership – the legislature had acted with sufficient diligence by rectifying the defect in the scheme identified by the Supreme Court in 2018 with effect from 2020.

The Court further argued that the increase in the tax-free threshold from ten to fifty rental properties did not lead to a breach of the principle of equality either, and declared the appeal unfounded.

Supreme Court judgment

The Supreme Court ruled that there is no formal or financial link between the landlord levy and the income-related rent increase, in the sense that the introduction of the income-related rent increase was a prerequisite for the introduction of the landlord levy.

The Supreme Court also rejected the argument that the landlord levy had the objective of skimming off income from the income-related rent increase. The landlord levy is not designed as a tax on certain types of rental income, but is linked to the value of properties in the regulated sector. This is not altered by the fact that the income-related rent increase was also mentioned during the parliamentary debate on the affordability of the landlord levy.

With regard to the principle of equality, the Supreme Court determined that there was a difference in treatment between properties held in full ownership and those held in co-ownership in 2019; landlord levy was due on properties held in full ownership but not on properties held in co-ownership in that year.

However, the Supreme Court argued that this temporary unequal treatment is objectively and reasonably justified. In its judgment, the Court held that the legal position of full owners was not affected by the previously identified defect in the scheme for co-owners, and that the legislature had remedied that defect within a reasonable period.

Accordingly, there is no violation of Article 26 of the International Covenant on Civil and Political Rights (ICCPR), Article 14 of the European Convention on Human Rights (ECHR) or the prohibition of discrimination as a general principle of law. According to the Supreme Court, the other complaints – including the one concerning the increase in the tax-free threshold from ten to fifty rented properties – cannot lead to an appeal in cassation either. The Supreme Court thus declared the appeal in cassation unfounded.

Properties held in co-ownership

On 10 July 2026, the Supreme Court once again delivered judgment on the landlord levy. This time, the question was whether the introduction of remedial legislation for landlords of co-owned properties, with retroactive force from 1 January 2020, was permissible.

On 20 December 2019, the Minister for the Environment and Housing announced in a press release and a letter to the House of Representatives that remedial legislation would be introduced with retroactive force due to impending budgetary consequences. The bill was eventually tabled on 6 March 2020 and came into force on 8 July 2020, with retroactive force from 1 January 2020. This course of events led the Court of Appeal in The Hague to conclude that the content of the remedial legislation and its retroactive force – as a result of which the liability for the landlord levy arose – were sufficiently foreseeable for co-owners. Furthermore, the reasons given for that retroactive force were held to be reasonable.

The Supreme Court endorsed this decision. Until the abovementioned announcement of 20 December 2019, co-owners could not reasonably assume in good faith that the legislature would allow the unequal treatment compared with full owners, which had arisen following the ruling of 8 June 2018, to continue. This is not altered by the fact that the legislature cited only the potential budgetary consequences as a reason to justify the retroactive force from 1 January 2020. According to the Supreme Court, this retroactive force does not infringe upon the legitimate expectations of co-owners. The conclusion is that the ‘fair balance’ has not been breached.

Now that the retroactive force of the remedial legislation has been found not to be contrary to Article 1 of the First Protocol to the ECHR, the Supreme Court no longer needed to address the argument that full owners would have been treated unjustifiably unequally in 2020 compared with co-owners. The appeal in cassation in this case was unfounded. Other appeals in cassation in which a similar position was taken have been dismissed without substantive substantiation (Article 81 of the Judiciary (Organization) Act.

Sources:

• Supreme Court, 26 June 2026, 24/02642, ECLI:NL:HR:2026:804
• Supreme Court 10 July 2026, 24/03381, ECLI:NL:HR:2026:1243