The housing issue has figured prominently in recent days in the debate on upcoming budgets in the Netherlands. The Cabinet has been in office since January and does not have much room for maneuver, but the majority of Congress agrees to abolish the taxes that, since 2013, are paid by associations of property owners with social rents – those that have a maximum monthly rent of 750 euros—, according to official terminology. This is to ensure the construction of new affordable houses, while preventing low-income groups from being marginalized. This rate, however, pays the State about 1.8 billion euros per year and the right-wing liberal party of Prime Minister Mark Rutte, winner of the elections last March, is reluctant to lose them.
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In June this year, the Netherlands had 8 million homes – between rent and ownership – according to the Central Statistical Office. However, for a population of 17 million, the same service indicates that nearly 300,000 houses are missing. The situation will stabilize around 2030. With the economic crisis just over, in 2013 a tax was introduced for owners of more than 10 – now there are 50 – rental accommodations of no more than 750 euros. The Executive intended with this to obtain income and promote the free rental sector, which starts from that figure.
But the market moved differently than expected: social rental corporations built fewer houses and the free sector grew, but not enough. The result is that long waiting lists were formed for the cheap houses, while the prices of the others rose. In 2016, a study by the University of Groningen indicated that the “social landlord tax” discourages the renovation of existing houses, as well as the construction of new ones. “It ends up raising the rent to the tenant, and it is sold or built, but in the strip without this burden,” the experts add.
The consulting firm Companen estimates that, free of the tax, the sector would have saved about 16,000 million euros between 2013 and 2023. With this sum, “93,500 extra houses could have been built and tenants would have paid 70 euros less per month.” Social democrats and ecologists from the GroenLinks (Green Left) party argue that abolition will lower rents by favoring new buildings. To finance the millionaire sum that will be lost, both parties propose to increase the tax on the profits of large companies. The Government will also invest 100 million euros per year over the next decade to build 900,000 homes.
Unbalanced markets
This is not just a Dutch problem. In January this year, the European Parliament adopted a resolution calling on EU countries to recognize access to adequate accommodation as a fundamental human right in their respective laws. “Between 2010 and 2018, about 10% of the population of the European Community used more than 40% of their income to pay for the house; the disbursement in social housing of the different governments represents 0.66% of the European GDP; in the last three years, house prices have risen an average of 5% in the EU, “said the European Parliament at the time. Demonstrations demanding a decent home – and the control of speculation, which pits young people and newly formed families at rents above 1,000 euros – have taken place in large Dutch cities. The same has happened in Germany, where the national price imbalance has reached the general election campaign held this Sunday.
According to the country’s statistical office, the Dutch market for the sale of houses is not balanced either: they are 78% more expensive than in 2013, when they were worth an average of 373,000 euros. At the moment, in Amsterdam the average sale price is 545,000 euros. In addition, in August prices rose 17.8% compared to 2020. The increase is the highest since September 2000.
source https://pledgetimes.com/the-left-wants-to-remove-the-tax-on-large-landlords-of-social-housing-in-the-netherlands/
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