Housing reform compromise to cost €200m a year, says minister

Plans to reform the housing sector worked out by the government and three opposition parties will cost the treasury some €200m a year in lost income, housing minister Stef Blok said on Wednesday.

The deal, which involves the government softening some of its plans, was necessary to ensure majority support in the upper house of parliament. The Labour-Liberal coalition does not control the senate.

Presenting the agreement to the press, Blok said it would provide an impulse to the housing market. The agreement will tackle reducing the number of richer people living in rent-controlled properties and boost the owner-occupier sector, Blok said.

The minister said he will examine how to make up the shortfall in spending in March.

Opposition

The deal is supported by the two minor Christian parties ChristenUnie and SGP as well as the D66 Liberal democrats.

The leaders of all three parties said they would be prepared to work together to solve impasses in other areas of government policy. For example, the cabinet’s plans to scrap student loans does not command majority support in the senate either.

Construction companies and the real estate organisation NVM have welcomed the agreement. ‘This is an improvement in policy,’ the NVM said in a statement.

Eelco Brinkman, head of the building sector lobby group Bouwend Nederland, said the deal brought clarity to the situation. ‘This is positive and softens the pain,’ Brinkman said.

The main points of the new agreement:

  • Social housing rents for people earning more than €43,000 a year will go up by a maximum 6.5% not 9%.
  • Middle and low-income houses will face rent increases of 4.5% and 3.5%.
  • Tenants whose income goes down may qualify for rent cuts.
  • Social housing rents will not be determined by the value of the property as planned and the current point-based system will remain.
  • Home buyers will get tax relief on their mortgage payments on hybrid mortgages involving 50% repayment. The cabinet had planned to limit the tax break to 100% repayment mortgages.
  • Value-added tax (btw) on home improvements will be cut from 21% to 6% for one year.
  • The government will set up new funds to help first-time buyers and people who want to boost their home’s energy efficiency.
  • The extra tax on housing corporations will reach €1.75bn, not €2bn.


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