Dutch Cabinet Increases Mortgage Interest Deduction for Higher Incomes

Published by Economisch Bureau Amsterdam on

Professor Raymond Gradus, an associate partner at the Amsterdam Bureau for Economics, reflects on the mortgage interest deduction for higher incomes in an article published in ESB. Since 2013, the government has been gradually moving toward a harmonized deduction rate, but the Schoof administration is deviating from this course in the 2025 tax policy.  

Currently, the interest on a mortgage may only be deducted at a flat rate equal to the lowest income tax bracket of 37%. However, the Dutch coalition parties are planning to introduce an additional income tax bracket, aimed at increasing incentives for labor. As a result of this measure, the mortgage interest deduction will increase for the first time in years, further fueling demand in an already overheated housing market. Reducing the mortgage interest deduction to the lowest bracket in 2025 is expected to generate approximately €400 million annually for the treasury. 

Raymond’s full article (in Dutch) can be read for free on the ESB website. 

Categorieën: Bulletins

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