The discussions about MortGage interest are increasing in the run-up to the elections. Experts Have Wanted to Abolish the Scheme for Years, but that is political sensitive. If Abolished, The Monthly Costs for HomeWers Will Increase. But this can be compensated with the processes.
Anyone with a MortGage Pays the repayment and interest every month. The interest paid can be deducted from the income on which tax must be paid. That saves a lot of money and makes buying a house more attractive.
The extent to which home buyers are favored is a problem accordance to many experts. Accordance to some, it drives house prices up further. It Harms the Rental Sector. Advisory Organizations Such As De Nederlandsche Bank (DNB), The IMF and Think Tank Oecd Think That Abolishing It Has Major Advantages.
Among Other Things, GroenLinks-Pvda and the CDA Advocate The Gradual Abolition of MortGage Interest Relief in Their Election Program. Other parties do not want this. The discussion Will Probable Become Even Fierce In The Run-Up to the Elections in October Than In Previous Years.
MortGage Interest Relief Decreases Slightly Every Year
If MortGage Interest Relief is Abolished, MortGage Costs Will Increase. But how much is it? And who does this hurt? Financial Advisor Van Bruggen Listed IT in An Example.
Van Bruggen Takes As A Starting Point A MortGage of 363,000 euros, The Average MortGage Amount That Starters Apply for in 2025 (in General That Amount is Slightly Higher).
It is not Yet Clear Exactly How the Abolition of MortGage Interest Relief Should Take Place Accordination to the Political Parties. There are Several Possibilities. One Option is that the percentage (which is now almost 40 percent) will be reduced every year. For example, about a period of fifteen years, until the deduction is at 0 percent.
In the first year, if the percentage drops slightly, the homeowner from van Bruggen’s example would spend 1,283 euros per month Instead or 1.255 euros on his mortar. That is 28 euros more. In The Following Year, The Deduction percentage Will Decrease Again Slightly and the Difference Will Increase Slightly Again. After ten years, The Monthly Amount Has Grown to 1,560 euros, A Difference or 222 Euros compared to what would have to be paid now.
‘Easy to Handle For Most People’
The size of the impact DEPENDS MAINLY ON THE SIZE OF THE MORTGAGE. For some with a mortgage of two hundred thousand, The Monthly Amount would have inceased by approxroximately 120 euros after ten years. And for some with a mortgage of six hundred thousand, 400 euros is added. Not Small Amounts, Therefore.
“But we don’t think it’s fair because the amount of that time is comparable to the current amount,” Says MortGage expert Oscar Noorlag from van Bruggen. “Incomes Grow Faster in practice. Dutch Households are already paying a narrower and narrower share on mortgages.”
Van Bruggen’s Conclusion is Therefore That The Abolition of MortGage Interest Relief is Less Drastic Than Feared. Each year, The Monthly Costs Increase by Approximately Twenty Euros. “For Most People, that is easy to handle,” Says Noorlag.
Alleviate Pain with Lower Income Tax
The Abolition of Interest Relief Mainly Affects People Who Have Just Taken Out A MortGage. Because they have not yet repaid much and therefore pay relatively high interest. In Addition, People with an Expendive MortGage See A Relatively High Benefit Disappear.
But the Proededs Can Soften the Pain. Abolition Yields Billions. MortGage Interest Relief Costs The State 11.2 Billion Euros this year. There are Several Ways in which money can be returned to society.
“LOWERING INCOME TAX is the most obvious,” Says Housing Market Professor Peter Boelhouwer from Tu Delft. The Advantage of This Measure is that tenants also Benefit from it.
Abolishing MortGage Interest Relief would also be Good for Rental Prices, Boelhouwer Continues. “If you buy a house to run out, you base the run on the purchase value. With a high house price, the tenant pays more.” The Idea is that abolishing interest relief also slows down house prices.
Critics Argue That House Prices Will Not Imdiately Fall because there is a Housing Shortage and ScarCity Ensures High Prices. “We are not going to build more homes if we abolish mortgage interest, that’s correct,” The Professor Acknowledges. Building Enough Homes Remains A Problem. “But Abolishing IT is Healthier for the Entire Housing Market, Especiate When it comes to the rental sector.”
“What is interesting,” Boelhouwer adds, “is that all of Europe has abolished Measures Such as mortgage interest relief relief. We can stop it. And if mortgage interest rates fall, you can reduce it even faster. These steps then. “