Hike taxes on multiple homeownership for more fairness in Dutch housing market: Advisors

The Chief Government Architect and Government Advisors (CRa) advocate for a radical change of course to tackle the housing crisis in the Netherlands. According to the central government’s advisory body, a fairer housing system is required to reduce inequality of opportunity in the housing market. Among other things, the CRa advises higher taxes on owning multiple homes.

On Thursday, the CRa made six recommendations to achieve this in the report ‘Home in the Future.’ “Strengthen the position of the least privileged, make access to housing fairer, and allow increases in land value to flow back into societal goals. With public control, more affordable rent, more room for new forms of housing and development, and the phasing out of price-inflating incentives, housing will once again become a common good,” the report states.

Among other things, the CRa advocates limiting the mortgage interest deduction as a benefit for homeowners and increasing the tax on homeownership by the imputed rental value of the owner-occupied home. “Tax multiple home ownership more heavily and use the proceeds for a housing security fund that supports vulnerable target groups. Based on the principle of fairness, it is illogical that people have access to multiple homes while others have no access to suitable housing,” the authors argue. “Additionally, consider a capital gains tax on the capital value of the sale of a second home.”

The CRA also believes that, due to increasing diversity, more communal living arrangements are needed to foster connection and mutual understanding. “Within some communities, it is a tradition to accommodate and care for the elderly at home. For example, for people with an immigration background, living with others is commonplace in their country of origin. The Netherlands has a long tradition of forms of cohabitation, ranging from courtyards, care homes, and sheltered housing to residential groups,” the experts said.

They also predict that cities and the countryside will look very different by 2050. "A walk-up apartment building has gained an extra floor. Through prefabrication and smart assembly, new homes are appearing on rooftops and in courtyards, built with lightweight timber structures, bio-based insulation, and recycled materials. Small-scale housing forms have emerged on vacant farmyards, combined with food production and bio-based materials, nature restoration, care, or workspace."