Finance

Homeowner much richer than tenant, even without counting the house

In addition to the value of their house, Dutch people with their own house have an average capital of 36,000 euros and tenants only 2600 euros. The difference has only increased in recent years. This is according to figures from Statistics Netherlands.

Due to the increased house prices, many homeowners already have a greater wealth on paper than tenants. But even if you ignore the value of the home and the mortgage debt, they are warm compared to tenants.

The average net worth of tenants has remained more or less the same since 2013, but that of homeowners increased by no less than 10,500 euros in the period up to 2020.

‘Loads for homeowners remain the same’

“If you own your own house, you often have more money left over from your income and homeowners invest that in shares, for example,” says Nic Vrieselaar, housing market economist at Rabobank. Tenants often can’t because they spend a much larger portion of their income on paying rent than homeowners on paying interest and paying off their mortgages, he says.

Furthermore, the costs for home buyers will remain roughly the same over time, according to Vrieselaar. “They lock in their housing costs when they buy a house and therefore take out a mortgage. The interest to be paid is often fixed for a longer period of time. But the rents rise every year.”

If you regularly receive a wage increase, homeowners will therefore have more and more money left over, while tenants will be able to skim off part of their possible wage increase because their rent also goes up, explains Vrieselaar.

Mortgage interest deduction

Home buyers also have an advantage due to the mortgage interest deduction, according to Vrieselaar. “Consumers who buy a house more often have a higher income, but they still receive income support.”

“You can also lower the mortgage interest deduction and lower income tax. That would be a boost for tenants, they will then no longer be taxed at a disadvantage and they will have more money left over because they pay less tax.”

60 percent of tenants have a maximum of 5000 euros

Nearly 60 percent of tenants in the Netherlands have little or no capital up to 5000 euros, according to Statistics Netherlands. That only applies to 18 percent of homeowners.

There are also tenants who are pushing the average up considerably. For example, 5 percent of them have a capacity of one ton or more. But among homeowners, that group is much larger at 27 percent.

Young people up to the age of 25 often have few assets or even debts. They also less often own their own home than the rest of the Dutch population.

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