Landlords Tax linked to social housing fall, higher rent: Developers

Housing corporations association Aedes, the Housing Association and the association of Dutch municipalities VNG are calling for the landlords tax to be abolished. A study by the University of Groningen showes that the tax has a negative impact on the availability of social housing and on households with low incomes, ANP reports.

The landlords tax was implemented in 2013. The government requires the owners of social housing to pay this tax to make a contribution towards reducing national debt. For that reason, most of the money raised by the tax - 1.2 billion euros in 2014, increasing to 1.7 billion euros in 2017, according to the study - disappears into the state treasury.

This year, the owners of more than 10 social housing homes have to pay the landlords tax of 0.491 percent of the property tax value of their homes. Next year it will be 0.536 percent.

According to the study, the landlords tax discourages landlords from building new social housing or renovating existing homes because it would increase their value and therefore also the tax. It is cheaper to increase rent on their homes to such an extent that they no longer fall under social housing, to sell their social housing home and to build private sector homes.

The researchers conclude that it would be better to extend the landlords tax to include all home types, non-social housing homes and owner-occupied homes.

But Aedes, the Housing Associations and the VNG are calling for the landlords tax to be completely abolished. According to them, the money spent on that tax is needed for more social housing and to keep rents affordable. The number of cheap corporation homes dropped by a third since 2010. According to the associations, corporations are eager to build more, but every euro they have to pay comes at the expense of new social housing.