Cabinet, Parliament Ignore European Housing Market Advice
THE HAGUE, 01/06/13 - The recommendations of the European Commission on the Dutch housing market are falling on deaf ears. Cabinet and Lower House are not planning to tamper with the Housing Accord reached in February.
The Commission is urging faster progress in restricting mortgage interest deductibility and raising rents for higher incomes. The broad consensus in the Netherlands is however that intervening again would be damaging to recovery on the housing market.
Housing Minister Stef Blok concluded the Housing Accord with three opposition parties, centre-left D66 and small Christian parties ChristenUnie and SGP. The mortgage interest tax break for first-time buyers is restricted in this, but existing cases are largely exempted.
The Commission refers to steps in the right direction. But in its view, the reforms are proceeding at too slow a pace, since for existing mortgages, the winding-down of the maximum interest deduction (up to 38 percent) will take place in 28 years.
Blok will not however introduce supplementary measures. The conservative (VVD) minister is supported by the VVD, Labour (PvdA) and the Christian democrats (CDA). "Rapid restriction of interest deductibility would only put more households in financial difficulties,” says CDA MP Raymond Knops.