Housing taxation in the Netherlands

Houses are prominent in many taxes in the Netherlands. In this chapter we analyze the situation of Dutch housing taxation in local and national taxes. We show that both are intertwined because of the use of one value which is determined at the local level, but used at the national level as well. We briefly discuss the balance between local and national taxation in the Netherlands, the relatively low amount of tax income of Dutch municipalities and the limited autonomy of municipalities to introduce and levy taxes, and the importance of taxation of houses for municipalities. Furthermore, we discuss the issues the preferential tax treatment of home ownership is causing to the Dutch economy. The measures taken to overcome these issues have caused a new problem: a conflict between generations in a time when aging is already causing tensions between older and younger generations. To understand the taxation of houses in the Netherlands, it is important to appreciate the unique housing situation in the Netherlands with a relatively low ownership and high social housing percentages, especially in the big cities. For that reason, we start this chapter with a brief overview of house ownership in the Netherlands.