Income Distribution and Housing Expenses in Flanders and the Netherlands

This study explores the role of housing in income inequality and poverty in Flanders (northern part of Belgium) and the Netherlands in 2005 – 2006. It analyses the distribution of disposable income before and after housing expenses by comparing disposable income with equivalent residual income. The Gini coefficient was used to measure income inequality, while a poverty threshold was set at 50% of the median equivalent income. The most significant conclusion is that income inequality and poverty increase in both ‘countries’ when equivalent disposable income is corrected for housing expenses. The results for Flanders and the Netherlands differ according to tenure. In the Netherlands, after deduction of housing expenses, the rise in poverty rate and income inequality was found to be greater among homeowners than among tenants, whereas in Flanders the opposite applied. In both countries the percentage of owner-occupiers on or below the poverty threshold, after deduction of housing expenses, was lower for outright homeowners. The housing allowance, which is generally granted to low-income households in the rental sector, plays a greater role as a subsidy mechanism in the Netherlands than in Flanders. Accordingly, the inequality gap after deduction of housing expenses turned out to be relatively small in the Netherlands compared with Flanders. In the case of tax benefits stemming from, say, mortgage interest relief the situation was reversed, i.e. the inequality gap was wider in the Netherlands than in Flanders. These conclusions also applied to the households on or below the poverty threshold.status: publishe

Security and Rental Housing: New Perspectives

Abstract not available

Een nieuwe rol voor de private huur. Deel 2: internationale verkenning

nrpages: 96status: publishe

Optimal taxation: Belgium compared

Belgium will devolve the responsibility and the budget for the favorable income tax treatment of owner-occupied dwellings to its administrative regions by 1 January 2015. This change would allow the regions (e.g. the Region of Flanders) to design their tax systems. This paper examines a reorientation according to the principles of the optimal tax theory based on the proposals of the Mirrlees Review. These principles imply that as little distortion in the behaviour of tax payers as possible should be achieved in order to minimize welfare losses to society. The principles are concerned with realizing a progressive and neutral tax system implying that the tax system should be considered to operate as a whole system; it should seek neutrality between types of activities and groups of people in order to avoid undesired behaviour; and it should achieve progressive taxation as efficiently as possible. This paper uses these principles as benchmark to determine the extent of subsidization of housing of private person owners of dwellings via the tax system in Belgium. The analyses of the tax system cover taxes at the point of acquisition (stamp duty, VAT), during the period of occupation/ownership (income and property taxes) and on sale of the dwelling (capital gains tax). This exercise is also carried out for four other countries (Denmark, Germany, the Netherlands and United Kingdom) in order to test for the use of theoretical principles in tax systems. Based on the empirics in the five countries it is concluded that none of countries come close to optimal taxation in housing. Based on theory and empirics it is analysed how the Belgian tax system and more specifically the future Flemish taxation could move closer to the optimal one.status: publishe

De verdeling van de woonsubsidies. Vlaanderen en Nederland vergeleken

nrpages: 86status: publishe