The time has finally come. After decades of canonization, the politics in The Hague has the courage to tackle the most hyped tax gift in national history. GroenLinks-PvdA, D66, and now even the CDA wants the mortgage interest deduction to be abolished.
As hard as economists like I have been calling for years that this is the step we have to take, putting homeowners as hard, also like me, now the heels in the sand. It is stated that you ‘cannot change the rules during the game’ and that the abolition of the mortgage interest deduction is ‘ridiculous’. But reducing the mortgage interest deduction is not ridiculous. No, it is ridiculous that it is there at all.
What is the mortgage interest deduction in essence? It is a government guarantee that the richer you are, the more debt you build up, and the more expensive the house you can buy, the more tax benefit you get. Who pays this account? These are people who don’t have and rent their own home.
This year costs the mortgage interest deduction The state more than 11 billion euros. That is almost twice as much If we spend on rent allowance. So we think that people are entitled to rent allowance cost us a lot of tax money, but the well -to -do brick owner costs us double.
The mortgage interest deduction is therefore not the solution for the housing crisis, but the reason why we are in it.
We have artificially blown up the demand for owner -occupied homes, so that the prices have been shot through the roof, so that people have to borrow even more, which gives them even more tax benefits, which increases prices even further. It is an economic vicious circle. We have created a system in which the government manages to play both the fire brigade and the pyromaniac: first set things on fire with subsidies, and then surprised that everything is lit.
The truth that nobody wants to hear: the mortgage interest is unjust, inefficient and market -disturbing. It is not for nothing that few other countries have the mortgage interest deduction and that the scheme in countries that had it, such as the United Kingdom, was gradually abolished.
The mortgage interest deduction is a tax fossil from a time when we thought that all Dutch people had to become a homeowner. Perhaps a noble ideal, but the effect has become a nightmare that has ensured that entire generations are excluded from the housing market. That so many people refuse to accept this is downright fascinating.
Does politics make a mistake? Then we are always there as the chickens to correct them. When we found out that innocent parents were wrongly cut on their allowances, we would compensate for this in the allowance affair. When we found out that Sywert van Lienden and his friends had incorrectly received millions from the state with their mouth caps deal, we did everything to get this money back. But do homeowners receive a subsidy to buy a house? Then we refuse to correct this error, and we suddenly see it as a right.
With the housing market, the great unequal of our society, as the theme for the upcoming elections, we should not only ask ourselves whether we should abolish the mortgage interest deduction, but why on earth we have ever introduced this.