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Reform of the homeownership regulation
But what is so complicated about the homeownership regulation? The researchers at Panteia have concluded that the current regulation is too compact and, therefore, is not used correctly. The complexity is a result of the sub-regulations that apply to ‘life events’ (for example, a divorce or moving).
The two research agencies state that the current regulation is not maintainable, controllable, feasible and enforceable. In addition, it is also described as ineffective.
Currently, the owner-occupied home is included in box 1: taxable income from work and homeownership. The two options given to the cabinet are:
- Defiscalizing the owner-occupied home, this means it will no longer be involved in taxation.
- Moving the owner-occupied home to box 3: savings and investments.
Advantages of the options
There are advantages to both options:
Defiscalizing will reduce incentives for debt build-up, and this will reduce disruption to housing decisions. Besides, the difficulty for stakeholders (such as the tax authorities, households and mortgage lenders) will decrease considerably. This stated former State Secretary Snel.
If the owner-occupied home will move to box 3, it will be treated neutrally. If this happens, the differences between the purchase and rental markets will disappear. The owner-occupied home will no longer be seen as a source of income but as capital.
Most important: something needs to change
The choice is up to the next cabinet. But the most important thing is that something needs to change. The government cannot ignore that. A key point to take into account is that the costs of homeowners should not rise so far that they will get into financial difficulties.