Mortgage interest tax relief will continue
Anyone who currently receives mortgage interest tax relief will continue to receive it after the administration passes from the federal to the regional government next year, the government has pledged. Last week, minister-president Kris Peeters, housing minister Freya Van den Bossche and budget minister Philippe Muyters gave an assurance that the system would continue in Flanders, despite advice from the government’s own housing council that it should be scrapped.
“The Flemish government will not go back on promises it has made,” said Van den Bossche. “There is no need for people to be concerned.” The council’s advice, the ministers argued, was in no way binding on the government. The bonus is worth about €1,200 a year to each owner-occupier in tax relief. It remains to be seen how the government will tackle the question of new mortgages after the handover.
In its advice, the housing council said the cost of the scheme was expected to more than double, from €1.2 billion in 2010 to €2.9 million by 2024, and become impossible for the government to afford in its current form. At the same time, the tax relief pushes house prices up and discriminates against tenants, who receive nothing, the advice said. The council recommends winding down the system over 10 to 15 years, with transitional measures to ease the blow for those with existing mortgages.
