The introduction of the Affordable Rent Act on 1 July 2024 makes the residential property valuation points system (WWS) more important than ever for landlords. Setting the right rent based on an accurate calculation of the WWS points is no longer optional – it’s now a legal and binding obligation. Yet what precisely does this mean for you as a landlord?
Why the WWS points are so important
The WWS, 30 years old this year, determines the maximum basic rent you may ask for a residential property. The new regulations mean that this system will have an even greater impact on the rental market. In addition to the regulated social sector (homes with a maximum of 143 points), a new regulated segment has been created: mid-segment rentals. Homes with between 144 and 186 points come under this new category and are now likewise subject to a binding maximum basic rent. Prior to 1 July, a home with more than 144 points came under the deregulated sector and this is obviously a significant difference in comparison to the new situation.
On top of this, from 1 January 2025 municipalities can enforce correct implementation of this legislation. Social housing and mid-segment rentals may not be let at excessively high rents.
Incorrect calculation of the WWS points can have enormous financial repercussions, such as reduced rents or penalties imposed by municipalities.
Transitional law
This is an exceptional situation and contrary to what the Minister for Housing’s had promised but properties with current tenancy agreements could be affected by the new rules too. These are homes that were let before 1 July 2024 at a deregulated rent but have fewer than 144 points following calculation of the WWS points after 1 July 2024. The landlords of these have until 1 July 2025 to improve the quality of their properties so that they have 144 or more points and can remain in the deregulated sector*.
* This means it’s possible for a residential property to be of sufficient quality to come under the deregulated sector prior to 1 July 2024 and be let on that basis, only for it suddenly to come under the transitional law because of the new legislation. I believe this is contrary to the principles of the rule of law and there are grounds for initiating legal action in this respect. After all, as a landlord this means when you let the property you should have considered legislation that didn’t even exist at the time.
Leave calculation of the WWS points to an expert
The WWS is complex. Although it appears to have been simplified, tiny differences can have enormous repercussions for rents. It may seem easy to calculate the WWS points yourself but there’s a high risk of you making a mistake. For example: a luxury fridge doesn’t earn any points if it isn’t integrated, no matter how high-tech and expensive it may be. And there are dozens of other nuances that can have a huge impact. Incorrect calculation of the WWS points can result in huge differences in rent. As an illustration, we’ve assisted owners who thought that their properties came under the deregulated sector, but a recalculation in fact showed that they were mid-segment rentals – a difference of hundreds of euros per month. And if these landlords had wrongly let their properties at a deregulated rent, in addition to binding rent reductions this could also have led to them incurring penalties.
Increase the value of your residential property
If your property no longer comes under the deregulated sector, the good news is that you often have time to alter your property to increase the number of WWS points. Minor improvements, such as installing a radiator or upgrading the energy label, can make just enough difference to ensure that your property again comes under the deregulated sector.
Interhouse will be happy to help you with this. Our certified employees can accurately calculate the WWS points and advise you on any improvements you can make to increase the value of your property. This advice tells you exactly where you stand and helps you avoid any surprises when the tenant leaves or the municipality carries out an inspection.
Be prepared – Ask us to calculate the WWS points for you
Don’t wait until the last moment to act. A pro-active stance brings peace of mind and certainty. At Interhouse we assist landlords throughout the whole process, from calculating the WWS points to letting advice. Our aim is to relieve you of the burden so that you can concentrate on the return from your real estate.
Contact us today for a professional, strategic calculation of the WWS points and ensure you comply with the latest legislation. That way you can be sure you’re asking the correct rent and don’t have to worry about future penalties or rent reductions.
Are you looking for more information? Contact us directly.
