Tax-free donation great success
Far more people than the Cabinet expected will use the temporary scheme to donate up to 100,000 euros tax-free to children or friends. That will cost the Treasury 1.04 billion: ten times more as what was expected. This is according to figures from the Court of Audit.
During the economic crisis, the government came up with the scheme to make the struggling housing market more smoothly. From October 2013 to January 2015, everyone was free to donate a tonne to children or friends, provided that this was used to purchase a home, renovate it or pay off the mortgage. The cabinet estimated that 20,000 people would make use of the scheme. This turned out to be much too low: 159,000 people donated an average of 60,000 euros.
Decline in mortgage debt
One of the effects of the many donations is that the rise in mortgage debt has stabilized since 2013 and has even declined in recent years. The average mortgage debt per homeowner has also decreased.
In the meantime, a new scheme has been active since January 1st of this year: it is possible to donate a tonne tax-free for owning a home, provided that the recipient is between 18 and 40 years old. The Court of Audit expects the same effect as with the temporary scheme: reduction of the total mortgage debt. Due to the age limit, the effect on the mortgage debt will be less than with the temporary scheme: people in their twenties and thirties mainly use the scheme to buy a home.