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Phase out mortgage tax relief over 30 years, say lobby groups

Wednesday 23 May 2012

The tax break on mortgages should be phased out gradually over 30 years, rather than scrapped for some new mortgages, according to recommendations drawn up by home owners lobby group VEH, housing corporations and tenants' groups.

The Dutch system is currently one of the most generous in Europe, with interest fully deductible for 30 years. The central bank, financial services watchdog and other bodies have called for change, arguing the collective Dutch mortgage debt makes the economy vulnerable.

In addition, social housing rents should rise in line with inflation plus two percentage points on an annual basis, the organisations say in a report on how to kick-start the housing market.

Social housing

The aim of increasing social housing rents is to encourage the better-off to leave cheap rental housing and either move into the non-rent-controlled sector or buy a home. Low income families would receive higher housing benefit in compensation.

According to the Volkskrant, which published the plans, it is the first time the three interest groups have worked together to try to solve the housing market problems. The report has been 18 months in the making.

House prices in the Netherlands are dropping and fewer homes are changing hands due to the economic crisis and tougher mortgage rules from the banks. Changes to mortgage tax relief are likely to be central to the forthcoming election campaign.

© DutchNews.nl



 

Readers' Comments

Finally someone says something smart about mortgage tax relief!

By Marc | 23 May 2012 11:49 AM

how is this smart?! especially, at the time of low house sales? why would you take away interest benefits now??

By What | 23 May 2012 4:22 PM

Rocket science takes 18 months - reduce tax relief on mortgages over thirty years and effectively stop rent control over the same time. Perhaps they should also check who is committing fraud with illegally sub renting a rent controlled house and find the others pretending to live in a house that you own whilst renting it out to get mortgage tax relief.

By taw6 | 23 May 2012 7:30 PM

To kick-start the housing market we are proposing to make it more difficult to afford and therefore buy a house.
What language is this? Dutch? English? Double Speak?

By Henk V | 24 May 2012 12:23 AM

@taw6 - agree with first checking where fraud is being committed and it is on a fairly widespread basis. I would suggest the majority of the fraud is carried out by non buitenlanders so for that reason we should see it not as fraud but maximising tax efficiency which we all have a duty to do in these tough times. A queue of expats willing to pay 1300 euros+ per month to rent somewhere provides motivation and means.

By Dr Ponzi | 24 May 2012 12:44 PM

 
 
 
 
 
 
 
 
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