And that while the then Minister of Finance Wopke Hoekstra indicated at the end of last year that ‘informal contacts’ in Brussels had been told that the Netherlands should continue to work on phasing out the mortgage interest deduction.
That tax advantage for homeowners has been a thorn in Europe for some time, and they saw a new opportunity in the corona recovery fund to put that point on the agenda. In order to qualify for the billions from that fund, countries must also overhaul their economies. That demand to reform was made at the insistence of the Netherlands, but threatened to come back like a boomerang with the mortgage deduction question.
Map of Kaag
But the deduction now seems to remain untouched. Minister Sigrid Kaag (Finance) has not included a further reduction in the draft recovery plan that the Netherlands is submitting to bring in the almost 5 billion that is in the European fund for the Netherlands. The Netherlands is introducing the earlier phasing out of mortgage deductions and its acceleration under the previous cabinets under Rutte as a reform.
Kaag’s plan also contains no new plans or reforms. It concerns a collection of intentions and reforms that are already in the coalition agreement or have even been devised earlier.
For example, the cabinet is thinking of investments in hydrogen, offshore wind turbines, heat pumps, the remediation of pig farms, housing construction and the National Care Reserve for more care employees in times of crisis.
Kaag is also fishing from the coalition agreement for the reforms demanded by the European Commission. It will include raising the flight tax, phasing out the self-employed deduction, abolishing the jubelton and introducing road pricing.
This is a draft plan, from which a final choice has yet to be made. The plans together cost 7.7 billion euros, while the Netherlands will probably receive 4.7 billion euros from Brussels. That amount was a disappointment, the coalition had counted on 5.8 billion a few months ago. But because the Dutch economy has been less affected by the corona crisis than expected, that amount turned out lower.