End mortgage tax breaks: report

Mortgage tax relief should be gradually phased out to breathe new life into the housing market, says Henry Meijdam, chairman of the housing ministry independent advisory council Vrom-Raad in today’s Financieele Dagblad.

In addition, the homeowners tax (eigenwoningforfait) and transfer duty should be scrapped and the rental housing market liberalised, the council says.
The government’s coalition agreement includes a commitment to leave mortgage tax relief – one of the most generous systems in Europe – untouched.
Meijdam told the paper that changing mortgage tax relief was ‘urgent’. It is ‘the fundamental cause of the unbalanced housing market’ which would lead to ‘social drama’, he said.
Not enough new houses were being built, but one million new homes would be needed within the next 25 years, the advisory council claims.
It recommends phasing mortgage tax relief out over 10 to 20 years, so as not to upset the market too much. Research by the economic planning bureau unit CPB says ending the homeowners’ tax break will lead to a slow down in house prices, but not a decline.

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