[andyt]

Brenda Brenda:

It's a deductible, not a subsidy.

A high income person who rents in the Netherlands is an idiot.
The deductible makes it possible for lower than middle class incomes to buy a house, making it cheaper than renting, which is the whole idea.

Exactly, because he does't get the tax write off, while a poor person who can't afford to buy doesn't - ie it's the reverse of progressive taxation. I'm sure the deductible inflates house prices, so probably lower incomers are no better off. Lots of discussion about all this in the US, including the harm it causes. But of course it's hard to repeal once it's in place, tho they are talking about it.

Let's be like Sweden is (or was?) where you could write off all interest on everything. Cars, etc. Great bonus for the finance industry.

[Brenda]

Heh, you get taxed 20% on your lease car

The poor person who can't afford to buy gets rent assistance. Once you don't get that anymore because you earn too much, you can afford to buy. It also means, that you amortize your house till the day you die, because if you don't, you pay tax over the value of your home, and you don't get your interest deductible.

[bootlegga]

andyt andyt:

Yep, you're confused. What you wrote above is true, as I said, hard to have renting part of your house pay the whole mortgage, unless you live somewhere where people are desperate to rent.

But you keep presenting it that somehow getting less rent than you pay in house costs is better than if you could get more rent, that you make more money in the former case. That's what had ASL questioning you too, seeing dollar signs in his eyes.

Again, renting out part of your house means you get to deduct mortgage interest and presumably taxes, maintenance, heating etc against the rent income, which you would not be able to do if you didn't rent out. You profit even if your rental income is less than your expenses. You would profit more if your rental income was more than your expenses tho, and this is where your terminology is confusing, making it seem like you get more profit for a loss than a profit. Just can't happen.

No, I agree that making a profit is a good thing, and I fully understand that 75% of a profit is better than having a loss but I'm saying that it's win-win.

However, as I've said several times, with mortgage prices these days, very few people are making a profit in the first 5-10 years of renting out their property.

If you make a profit, great, if not, a loss can be very beneficial financially too.