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This is cart before horse stuff. As noticed by other commenters some people need to rent. I am blaming 'quantitative easing'. If the central bank buys a whole l
by cjfd 5y ago
This is cart before horse stuff. As noticed by other commenters some people need to rent. I am blaming 'quantitative easing'. If the central bank buys a whole lot of assets where do other investors go?
- varjag 5y agoI believe the Netherlands used to allow full tax write-off of the mortgage interest (dunno if they still do). That certainly is bound to heat up the market.
- dwightgunning 5y agoThis is still in place for PPOR. Does not apply for investment properties AFAIK.
- hvdijk 5y agoThere are a few other cases where it applies as well, but you're right that it doesn't apply to investment properties. Also, it's no longer always a full write off, it's a write off at a capped rate. Those with low incomes have a full write off, those with high incomes see a more limited effect.
- varjag 5y agoSince most people would like themselves a PPOR that still has the effect of heating up the market.
- the-dude 5y agoNote to self : PPOR means 'Principal Place of Residence' here.
- dogma1138 5y agoThat’s not a full write off and it’s only for a mortgage on a property you reside in. BTW many countries in the EU allow you to write off interest from loans even from credit cards but it didn’t cause an inflation of personal credit line or increased utilization.
- varjag 5y agoThe line of credit is not a physical, limited-availability asset however (and not something among basic people needs).
- the-dude 5y agoI am not sure 'full write-off' is the correct term. It is tax deductable, so you are taxed less, typically max 50% of the interest sum.
- varjag 5y agoThat's the explanation I had from a local back in 2003. He said their whole interest part of the mortgage was eligible for tax rebate.
- the-dude 5y agoStill the case for PPOR, 30 years max, no interest-only mortages.
- IkmoIkmo 5y agoNot 50% anymore, the max deductible rate is now 43% and in 2023 it'll be 37% at which point there won't be anymore scheduled reductions. (but I'd be surprised if further reductions won't be announced the coming years). It can be a misleading to say this means only 50% or 37% of your interest can be deducted. It could still be fully deducted. i.e. if your income is taxed at 37% rate, then the 37% rate of 2023 will mean your entire interest can be deducted from your income (100% interest deduction). It means that at higher progressive tax rates for higher incomes, e.g. at 50%, only 37% of the 50% can be deducted.