Tax-Free 100,000 Euro Gift for Mortgage Reduction
THE HAGUE, 28/08/13 - Dutch taxpayers will be able to gift 100,000 euros tax-free next year. The money must be used on the home of the recipient.
The gift regulation was agreed by coalition parties conservatives (VVD) and Labour (PvdA), De Telegraaf newspaper reported on Tuesday. The regulation is aimed at reducing mortgage debt. The money can also be used as an investment in a house, for example for renovations. The cabinet earlier said it wanted to release "sleeping capital" into the economy.
The newspaper said the VVD and PvdA have agreed on the extra 6 billion euros in budget cuts. All plans will be announced officially on budget day, 17 September.
Average purchasing power will decline by 1 percent next year, sources say. Those on middle incomes will be better off than the highest and lowest levels.
The elimination of 600 million euros on tax decreases for businesses - as part of the overall 6 billion euro spending cut - will be partly compensated. Some, but not all, of the 600 million decrease will be maintained.
Sources say that during the negotiations, the cabinet was confronted by an unexpected one billion euro decrease in tax revenues. Under law, unemployment (WW) insurance contributions by companies must rise if jobless numbers increase. This is now the case as unemployment continues its sharp rise.
It was earlier made known that the cabinet was seeking more tax income by not adjusting the tax brackets for inflation and by freezing the pay of civil servants. There were cuts in the budgets of all government ministries.