Minister Schouten on the move for a new lease system

It has now been a year and a half since Minister Schouten's lease letter was issued. She considered it important that the existing regular lease contracts are respected and that short-term leases are discouraged.

Shortly afterwards, the (agricultural) spokespersons of all parties in the House of Representatives indicated that they agreed with the line indicated by the minister. NAJK, BLHB and LTO already responded positively to the lease. The lessors' organization FPG was also positive, although there were reservations about the limitation of the short-term lease. The minister seemed to have succeeded in finding the right tone and content of the desired lease policy. However, no bill has yet been submitted that can be discussed during this parliamentary term.

This will partly be due to the successive crises. LTO even published a lease vision for 2020 in June of this year. The 2020 lease standards have been adjusted as usual on 1 July. In many regions, standards have been lowered by declining agricultural income trends, as always accompanied by the equally usual criticisms of steward and landlord organizations.

What now?
The land users' organisations, BLHB, NAJK and LTO, are in broad agreement. Landlord's organization FPG not, that's allowed. The fact that landlords and tenants (or in other words lords and farmers) do not align is a fact of all times. That's exactly what we now have lease legislation for and a minister who takes charge. In my opinion, the FPG is waging a rearguard action over the short-term lease, but rightly calls attention to the lessor's yield.

Although the return on leased agricultural real estate (directly and indirectly) is certainly not inferior or even better than that of other investments, the unfair capital yield tax burdens the private lessee disproportionately. After all, it is not based on the actual yield maximized by the lease standards, but on a fictitious yield of 4% of the value. In the case of regular leases, this value may still be set at 60% (was 50%) of the free value.

Stop unfair taxation
Not a lease problem, but a tax problem. Under the current circumstances, a private lessor would do well to investigate whether it would not be better to lease land from box 1 or 2. It is better that the practice of unfair taxation is ended as soon as possible by using the actual return as the tax base. Or completely exempt the income from leased land from taxation.

Then the way will be completely clear for the revision of the lease system, desired by all parties. The liberalized lease was introduced in 2007, the regular lease has been supplanted for that long. In 2014 Willem Bruil evaluated the lease legislation introduced in 2007. Everything has been said about it ever since. Now it's the minister's turn!

Peter van der Eijk

Piet van der Eijk was the chairman of the Association of Land Tenants and Own Land Users (BLHB) from 2012 to the beginning of 2019. He also has an arable farm in the Biesbosch polder in the outskirts of the Eiland van Dordrecht.

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