Munich Personal RePEc Archive

Taxing owner-occupied housing: comparing the Netherlands to other European Union countries

van der Hoek, M. Peter and Radloff, Sarah. E. (2007): Taxing owner-occupied housing: comparing the Netherlands to other European Union countries. Published in: Public Finance and Management , Vol. 7, No. 4 (2007): pp. 393-421.

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Abstract

This paper compares owner-occupied housing tax regimes in the Netherlands and the other countries in the EU-15. The Nether-lands appears to stand apart in two respects. First, in Luxembourg and the Netherlands owner-occupiers have to include an imputed rental income in their taxable income. Second, in the Netherlands, the tax-deductibility of mortgage interest payments is almost unre-stricted. The tax regime of owner-occupied homes increasingly erodes the personal income tax base in the Netherlands, so that higher tax rates are needed to collect a given amount of revenue. However, elimination or reduction of the mortgage interest deduction can only be realized gradually. Due to a lack of data both within the various tax regimes and across time periods, a comprehensive multivariate time-series comparison among the various tax regimes in the EU-15 is not pos-sible. Thus, the statistical analysis is limited to bivariate compari-sons.

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