This study explores the role of housing expenses and subsidies regarding the income distribution in Flanders (northern part of Belgium) and the Netherlands in 2005 – 2006. It analyses income poverty and inequality, by comparing equivalent disposable income before and after housing expenses with a relative poverty threshold and the Gini coefficient.
Poverty and income inequality increase in both ‘countries’ when equivalent disposable income is corrected for housing expenses. Furthermore the relative position of outright owners and social tenants regarding poverty improves. Housing subsidies play a (partly) different role in Flanders and the Netherlands. The implicit social rent subsidy in Flanders and the explicit housing allowance in the Netherlands yet serve the same goal: they both redistribute income relatively strongly in favour of the low income tenants. The tax relief system on the other hand increases income inequality in society, in both Flanders and the Netherlands, whereas our comparative analysis suggests that tax relief does not have a moderating effect on net housing expenses.