X. Housing

The Dutch housing market is stagnant. This is bad news for our economy, and a major impediment for people who want to buy, sell, rent or move. Requiring annual repayments of principal as a precondition for mortgage interest relief for new mortgages, and structurally reducing conveyance duty, will be the first big steps towards getting the housing market moving again. Finally, we will create a transparent and sustainable framework for the property sales and rental market, thus putting an end to the prevailing uncertainty and putting us within striking distance of a fair and dynamic market. In view of the great importance and complexity of these reforms, a new Minister for Housing and the Central Government Sector at the Ministry of the Interior and Kingdom Relations will be put in charge of housing issues.

•    Mortgage interest relief will continue to exist to encourage people to buy homes of their own, but will be modified as follows. For new and existing loans secured by mortgage, from 2014 the highest rate in force (for the fourth tax band) will be reduced by 1/2% per year, until it has been reduced to the rate for the third tax band. Each year we will transfer the additional revenues generated by this measure in a budget-neutral way back to the group affected by it: half by lowering the income tax rate for the highest tax band, and half by raising the upper limit for the third tax band. The problem of residual debt remaining after property sales will be effectively tackled by making interest payments on residual debt temporarily tax-deductible (for a maximum of five years), under certain preconditions. The facility of the Dutch Municipal Housing Incentive Fund for loans to new buyers on favourable terms will be expanded.
•    Housing benefit will be preserved intact to ensure the continued availability of affordable housing to low-income people. This will make it possible to raise rents by different amounts for people with different incomes. For tenants with household incomes of less than €33,000, the increase will be 1.5 percentage points above the rate of inflation; for tenants with household incomes between €33,000 and €43,000, 2.5 percentage points above the rate of inflation; for tenants with household incomes above €43,000, 6.5 percentage points above the rate of inflation. Lessors will be able to use an approach based on aggregate rental income. The system will be retained of setting a rent above which rents are deregulated. The home valuation system will be drastically simplified by taking as a base 4.5% of the assessed value under the Valuation of Immovable Property Act, thus eliminating the complicated points system. For tenants with incomes higher than €43,000, the maximum rent under the home valuation system will be temporarily suspended; as soon as the sitting tenants vacate, the maximum rent will be applicable again. This will enable us to tackle the problem of distortion in the rental market while maintaining the existing stock of social housing.
•    Housing associations must be made to serve the public interest once more. We will limit their tasks to building, leasing and managing social housing and, as a subordinated task, real property with a social function directly linked to social housing. Housing associations will be directly supervised by municipalities. Municipalities with more than 100,000 inhabitants will be given additional powers. The size of a housing association must correspond to the scale of the regional housing market and to its core societal function. The additional rental income that housing associations will receive as a result of measures in the rental sector will be creamed off through taxation. The regulation of the remuneration of housing association managers will be accelerated using the new Top Incomes (Standardisation) Act.