Finance Minister Jan Jambon (N-VA) said on Tuesday that he was confident the abolition of the federal mortgage interest deduction for second homes, a measure included in the coalition agreement, would hold up legally.
He was responding in Parliament’s Finance Committee to a question from Open VLD legislator Vincent Van Quickenborne.
The federal government aims to eliminate the interest deduction for people taking out loans for non-primary residences, as stated in the coalition agreement. This affects, for instance, individuals buying an apartment or house to rent out.
Initially, there was some confusion about the measure, but Jambon confirmed earlier in parliament that the deduction would not be retroactively abolished for 2024, as that would be illegal. The abolition will therefore apply from next year’s tax return.
However, Van Quickenborne argued that the government was committing a “breach of contract.”
“This affects thousands of people who have signed contracts, and you’re tearing them up overnight,” he said.
Van Quickenborne believes the government should phase out the interest deduction to protect existing contracts. He also referred to the abolition of the passive housing interest deduction, a similar measure ruled unconstitutional by the Constitutional Court in 2013.
Jambon, however, maintained that the measure would stand up in court. He also insisted that it was justified by the “problematic budget deficit.”
“The government wants to reverse the trend in the interest of the country and future generations, and part of that effort must come from those with the strongest shoulders, including those earning income from real estate,” he said.
He also highlighted a tax reduction of €1.5 billion, specifically benefiting the working middle class.
