I am a very unusual creature in that I have no debts at all. No study loan, no apartment loan, no car loan, no credit cards. And for this I need to be punished. Allow me to explain.
In Sweden if you have a mortgage you get tax relief on the interest payments. It’s around 30% if I’m not mistaken. This can be a reduction in the region of 1500 Euros per year for the average person. However if, like me, you rent your apartment then you get a tax relief of zero.
So, as a buyer, you own the place you live in PLUS you are subsidised by the taxpayer so that you can afford a better place than you otherwise could. You are effectively being rewarded for being in huge debt.
I heard that in the 80s in Sweden the relief rate was much higher than 30%. The banks then would happily give mortgages that exceeded the value of your property and properties with mortgages attached were sought after, as a way to reduce your tax.
I must admit that I don’t understand this at all. Surely I should be getting a bonus for paying my way and not borrowing huge chunks of money? It’s almost as if the state wants me to borrow money. Which, of course, they don’t. Mmm, yeah.
Does this system exists in other countries, that the tax payer subsidises borrowing? Come on readers, tell me, as I have no idea. It’s all too adult for me. The more I find out about the world, the less I get it all.
Oh well, at least I get to gloat when the interest rates go up as then I am richer compared to most other people. And when I pop my clogs I might actually have money to give the family members I leave behind, instead of the huge debt that most of my contemporaries will be leaving after them. Debt, and real ugly houses.
/ paddy (still in the black)