VVD won't touch mortgage interest deduction; Will avoid coalitions with plans to cut it
The VVD will not touch the mortgage interest deduction and won’t form a government with a party that wants to reduce or abolish the benefit, party leader Dilan Yeşilgöz said on the program WNL Op Zondag. “Households really rely on the mortgage interest deduction,” she said. “If you’ve managed to buy a house with a lot of effort, we can’t just take it away.”
With this statement, the VVD leader has officially turned the mortgage interest deduction into an election issue, and complicated future cooperation with the CDA and GroenLinks-PvdA after the election on October 29.
The CDA and GroenLinks-PvdA both have in their election program that they want to phase out this benefit. GroenLinks-PvdA wants to do it over eight years, while the CDA wants 30 years. The two parties point to countless experts and institutions that have been advocating for scrapping the mortgage interest deduction for years. The measure disrupts the housing market because it gives home buyers more room to borrow for their mortgage and bid higher amounts on the scarce housing supply, driving up home prices. It also gives homeowners a significant advantage over tenants because they pay significantly less tax.
Abolishing the mortgage interest deduction could, however, mean that homeowners would pay hundreds of euros more per month. Though mortgage experts have calculated that this won’t be devastating if the benefit is phased out slowly enough. “I realize this is a difficult measure, but we must do what’s necessary,” CDA leader Henri Bontenbal said about phasing out the benefit.
While the VVD is now strongly opposed to adjusting the mortgage interest deduction, the party did vote in favor of an accelerated phase-out during the Rutte III Cabinet. Yeşilgöz explained the shift by saying that the housing market now “needs peace and stability.”
The VVD’s youth division, JOVD, opposes this position. “The ‘own-driveway-first’ nonsense is back,” the JOVD wrote on X. “Create policy for the entire housing market instead of just the homeowner.” Young first-time buyers, in particular, are struggling to enter the overheated Dutch housing market. They typically have lower incomes and don’t have money saved up to contribute to their mortgage, without which it is nearly impossible to afford a home.
It wasn’t only the youth division that revealed division in the VVD’s ranks on Sunday. Caretaker Defense Minister Ruben Brekelmans (VVD) also created confusion about whether or not the VVD was willing to work with GroenLinks-PvdA in an upcoming Cabinet, NOS reported. Last week, Yeşilgöz said no, though she was unwilling to explicitly say that the liberals ruled out working with the left-wing cooperation when pressed.
On the television program Buitenhof on Sunday, Breukelmans said that Yeşilgöz’s words about the mortgage interest deduction shouldn’t be taken to imply that the VVD doesn’t want to govern with GroenLinks-PvdA. “If you look at the polls now and say: we exclude that party on principle, then the country will be very difficult to govern.”
He retracted his position on X a short time later. “I didn’t express myself well on Buitenhof,” he wrote. “Therefore, let me be very clear: governing with GroenLinks-PvdA is completely inconceivable for the VVD. With that party, we don’t see a Cabinet that is stable and makes the right choices for the Netherlands.”
The VVD has been dropping in the polls. In the latest Peilingwijzer, the liberals stand at between 14 and 18 seats, putting them in a distant third place behind the PVV (29 to 35), GroenLinks-PvdA (23 to 27), and the CDA (22 to 26). If the VVD won’t work with the PVV or GroenLinks-PvdA, and will also exclude the CDA due to its position on the mortgage interest deduction, the party’s inclusion in a future Cabinet seems increasingly unlikely.
