The impact of the mortgage interest and capital deduction scheme on the Belgian mortgage market

In 2005, mortgage interest, capital deductions and insurance premiums (MICPD) were assembled into one single deduction package to further stimulate home ownership in Belgium. Former research has shown that the MICPD did not raise the probability of becoming a home owner, due to its capitalisation into higher house prices. The objective of this paper is to investigate how the transmission of the capitalisation takes place. The analysis is based on data extracted from the Household Finance and Consumption Survey. The mortgage amount, the mortgage maturity, the interest rate and the house price a... Mehr ...