PFM Articles 
Taxing Owner-Occupied Housing: Comparing the Netherlands to Other European Union Countries
M. PETER VAN DER HOEK AND SARAH E. RADLOFF
PFM, Vol. 7 No. 4,
(2007)
This paper compares owner-occupied housing tax regimes in the Netherlands and the other countries in the EU-15. The Netherlands appears to stand apart in two respects. First, in Luxembourg and the Netherlands owner-occupiers have to include an imputed rental income in their taxable income. Second, in the Netherlands, the tax-deductibility of mortgage interest payments is almost unrestricted.
The tax regime of owner-occupied homes increasingly erodes the personal income tax base in the Netherlands, so that higher tax rates are needed to collect a given amount of revenue. However, elimination or reduction of the mortgage interest deduction can only be realized gradually.
Due to a lack of data both within the various tax regimes and across time periods, a comprehensive multivariate time-series comparison among the various tax regimes in the EU-15 is not possible. Thus, the statistical analysis is limited to bivariate comparisons.
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