Dutch gov't to push billions into tackling the housing crisis: report

The Dutch government will announce multiple measures aimed at tackling the housing shortage on Budget Day. A fund of 1 billion euros in subsidies will be created for municipalities starting new building projects, and housing corporations who build new homes will receive up to a billion euros in tax discounts. First-time homeowners may also be exempt from transfer tax, the Volkskrant reports based on sources.

The transfer tax exemption is still being tested for feasibility, according to the newspaper's sources. The government is also looking into whether landlords and real estate investors can be taxed more when they purchase properties.

The fact that the housing shortage is reaching epic proportions is clearly dawning on the government, according to the newspaper. Minister Kasja Ollongren of Home Affairs described it as a "housing crisis'. According to the Minister, there is currently a shortage of nearly 300 thousand homes. Her goal is to build around 75 thousand new homes per year by 2025, but that target was not reached last year and will likely also not be reached this year.

The government is therefore setting up a construction fund with "a maximum of one billion" euros in subsidies, with which municipalities can be enticed to designate more locations for new construction by making it profitable to do so. Similar funds were set up in the past, for example for the development of vinex neighborhoods, though with significantly more money. Municipalities and builders have been calling for the re-establishment for such a subsidy pot for some time, according to the newspaper.

The Rutte III government is also taking steps in other areas. The government wants housing associations to play a greater role again. The so-called landlord's tax, a tax on social rental housing, will therefore be cut again. Housing corporations who start new construction projects can receive a discount on this tax of a total of one billion euros over the next ten years - an average of 100 million a year. The total landlord's tax fluctuates around 1.7 billion a year, which makes the discount a modest amount. But the government hopes that this will prompt corporations to start building again.

The limited supply on the rental- and owner-occupied market combined with the rising house prices means that first-time homeowners and middle class households have an increasingly difficult tie finding an affordable and suitable home, especially in the cities. Mortgage adviser De Hypoteker recently calculated that the average Dutch worker can only afford 6 percent of the homes currently on the market.