The tax deduction for home owners amounted to more than 33 billion euro in 2011. The tax advantage for home owners totalled more than 14 billion euro, i.e. an average of 290 euro a month per home-owning household.
Home ownership-related tax deduction doubled since 2000
Home ownership-related tax deduction totalled 16.9 billion euro in 2000, but has nearly doubled to 33.4 billion euro in 2011. The largest part consists of deductible interest and financing costs, the so-called mortgage interest deduction (32.3 billion euro in 2011).
Home ownership-related tax deduction
Advantage varies according to income
The home ownership-related tax deduction for the average Dutch household was 670 euro a month last year. The advantage was 290 euro a month in income tax and social insurance contributions. The advantage ranged between 130 euro a month for the lowest income brackets and more than 520 euro a month for the highest incomes.
On average, home owners with the highest incomes paid 3,520 euro a month instead of 4,040 euro a month for income tax and social insurance contributions, an average advantage of 13 percent. The relative effect of the deduction is higher for lower incomes. The levy was reduced by more than half for the lowest income brackets.
Tax and advantage tax deduction for home owners by income category, 2011*
Higher incomes benefit most from tax advantage
High-income households much more often than low income households own the house they live in. Less than 17 percent of the lowest-income households benefited from home the ownership-related tax deduction in 2011, versus 92 percent of the highest incomes.
Due to the relatively large number of home-owning households in the Netherlands and the high average tax advantage, 30 percent of the total amount of 14.3 billion euro went to persons in the highest income category. Nearly 19 percent went to the second highest income category. As a result, nearly half of the tax advantage was received by households with a gross annual income of at least 82.9 thousand euro.
Share in total home ownership-related tax deduction by income category, 2011*
Reinder Lok and Peter Meuwissen