92001E0237

WRITTEN QUESTION E-0237/01

by Erik Meijer (GUE/NGL) to the Commission

(7 February 2001)

Subject: Forcing up of house prices in Belgium by new Netherlands mortgage tax-relief option

1. Is the Commission aware that one consequence of the extensive changes to the Netherlands taxation system, effective as at 1 January 2001 is that the option, already longstanding in the Netherlands, of deducting the interest paid on a maximum 30-year mortgage on the first dwelling from income tax is being extended to cover dwellings in other countries, provided that the owner-occupier is someone who works in the Netherlands and pays income tax there?

2. Is the Commission further aware that the tax provision referred to in paragraph 1 is strongly forcing up house prices in Belgium's northern border region, in particular in areas of the Flemish provinces of Antwerp and Limburg within commuting distance of the Netherlands towns of Tilburg, Eindhoven and Maastricht, because Netherlands taxpayers buying there will incur much lower costs than Belgians, thereby forcing many intending Belgian house-buyers to retreat to more affordable areas further away from the border?

3. How does the Commission assess a tax provision that appears to be advantageous to those buying a house for their own use but in practice drives up prices to the advantage of sellers because the latter know that the tax concession enables buyers to afford significantly more than they would otherwise?

4. What action will the Commission take to help to solve the cross-border problem posed in this connection by protecting residents of Belgium's northern border area against steeply rising prices and what amounts to a form of banishment as a result of tax provisions adopted in another country?

Answer given by Mr Bolkestein on behalf of the Commission

(21 March 2001)

1. The Commission is aware of the change in Netherlands tax legislation which extended tax advantages on mortgage repayments applying only to dwellings in the Netherlands until 1 January 2001 to those in other countries, provided the owner-occupier works in the Netherlands and pays income tax there.

2. The Commission understands that Dutch nationals take the new provision into consideration when deciding to purchase a dwelling in Belgium. It further understands that the increased demand for houses in the northern border region of Belgium resulting from the increased interest shown by potential buyers from the Netherlands tends to push up house prices there, a change that is advantageous for vendors.

3. The Commission considers that the new tax provision adopted by the Netherlands is in accordance with Community legislation, which specifically prevents the Member States from imposing tax or other restrictions on their citizens' freedom of movement and freedom of establishment outside their own country.

4. The Commission does not consider that any specific Community measure is necessary to deal with the issue raised in this question.