VVD proposes tax-free savings for first-time homebuyers in the Netherlands

A new housing plan has been submitted by the People’s Party for Freedom and Democracy (VVD), which would allow first-time homebuyers to save to buy a house in the Netherlands tax-free, among other proposals. 

Tax-free savings for starters to buy first home in the Netherlands

With housing prices seeing a sharp increase this year and first-time buyers needing over 90.000 euros in savings to afford a Dutch home, it’s fair to say that buying a house in the Netherlands has become unaffordable for young people and starters. In fact, the average house price is so expensive that first-time buyers often need a combined annual income of 90.000 euros to qualify for a mortgage, reports AD.

"Many people are therefore forced to look for a rental home, while they would actually prefer to buy," VVD MP Peter de Groot said when presenting the proposal. For this reason, the VVD has come up with a new housing plan to make home ownership more affordable.

The main point of the proposal is to allow starters to open a separate bank account to put away money specifically for a house, where they can save up to 75.000 euros tax-free. "This system already exists in Germany, and it works well there," said De Groot. "Many young people there have a separate bank account to save for a house. That money can only be used for a house. There's no reason why that wouldn't be possible here."

VVD wants to make buying house in the Netherlands more affordable

The party also wants to expand the National Affordable Homes Fund that was launched in the Netherlands last month. With the fund, starters and middle-income earners get reimbursed for a portion of the purchase price of a home. 

Currently, the maximum reimbursement amount is 70.000 euros and with 100 million euros allocated for the fund, it can help around 1.500 homebuyers. According to De Groot, this is not enough people and with more budget, more starters could get support. "The fund can be filled with money from pension funds or the National Mortgage Guarantee fund. It's not wasted money, because a loan is always repaid when someone moves."

Other plans include a separate mortgage repayment term for first-time buyers of 40 years to lower monthly payments and reinstating tax-free gifts from family to purchase a home. Just last year, the tax-free donation from parents was scrapped as it was contributing to rising house prices. But the proposed solution for this is capping the gift amount to 30.000 euros instead of 100.000 euros. 

The VVD plans to push for the implementation of these housing proposals if the party is part of the negotiations for a new coalition after the October elections.