Even as the housing market shows signs of cooling, abolishing mortgage interest tax relief remains the right move, according to Olaf Sleijpen, Director of De Nederlandsche Bank (DNB), speaking on Friday at the University of Amsterdam’s Room for Discussion. The central bank has long opposed the deduction, arguing that it effectively amounts to tax relief for homeowners over renters while artificially inflating property prices. Although house price growth has slowed recently, Sleijpen declined to offer explicit forecasts, whilst not ruling out an eventual drop in values. Regardless of where property prices head, he stressed that he remains fully committed to phasing out the tax benefit entirely.
Sleijpen argued that favouring homeowners over renters no longer serves any economic purpose, even if political motives persist, adding that the Dutch economy could comfortably absorb a potential decline in house prices. While several political parties campaigned to scrap the measure ahead of last year’s elections, the current cabinet’s policy agenda makes no mention of its removal, prompting DNB to reiterate its stance. Sleijpen noted that explaining why ending the tax break makes sense from a macroeconomic perspective has been a persistent battle fought by successive central bank leaderships.
Looking back, Sleijpen described the recent era of record-low interest rates as a missed opportunity for structural reform. Had the tax deduction been scrapped during that period, taxpayers would barely have noticed the impact because the actual rebate amounts received from the tax authority were relatively low at the time. With borrowing costs now higher, the debate over ending the controversial tax relief remains as sharp as ever.
@anp | NEWS BRAINPORT
