Advice officials to House of Representatives: eliminate mortgage interest deduction and bring back temporary leases

The central government website recently reported that the so-called Interdepartmental Policy Survey (IBO) into the rental sector had been completed, resulting in the IBO report “Giving Home. This report was presented to the Lower House by outgoing Housing and Spatial Planning Minister Keijzer. The document contains a comprehensive evaluation of the rental sector and the policy pursued thereon. In addition, the report offers several handles for future rental policy. The researchers advocate the development of a long-term vision that rests on stability and predictability. It is important to align responsibilities, mutual agreements, objectives and financial frameworks in a feasible manner. The researchers conducted interviews with policymakers, municipalities, housing corporations, (future) tenants and landlords for the preparation of this report.

6 key areas of concern

The researchers identify six key areas of concern, including the shortage of affordable rental housing, limited opportunities for first-time buyers and middle-income home-seekers, pressure on livability in some neighborhoods, insufficient efficient use of the existing rental stock and the complexity of rental policy. The report also discusses the impact that tax breaks for the owner-occupied sector are having on the rental sector.

Solutions

In doing so, the researchers also put forward solutions. For example, politicians are advised to phase out the mortgage interest deduction and make temporary rental agreements possible again (but now from 5 to 7 years, instead of the previously existing possibility of up to 2 years). This should make renting an equivalent alternative to buying a home again and also reduce long waiting lists and high rents. However, phasing out the mortgage interest deduction is sensitive for many political parties and the temporary rental agreement has only been abolished for one year. I therefore doubt whether their suggestions are realistic.

The minister will respond to the recommendations at a later date. Since the current administration is outgoing, it is expected that major policy changes will be left to a subsequent administration.

Advice

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