The housing cost overburden rate is the percentage of the population living in households where the total housing costs ('net' of housing allowances) represent more than 40 % of disposable income ('net' of housing allowances).
Housing costs refer to the monthly expenses associated with the right to live in a dwelling. This includes the cost of utilities such as water, electricity, gas, and heating. Only the housing costs that are paid are taken into account, regardless of who covers them. This includes expenses such as structural insurance, mandatory services and charges (e.g., sewage and refuse removal), regular maintenance and repairs, taxes, and the cost of utilities (water, electricity, gas, and heating). For homeowners, the housing cost calculation includes mortgage interest payments net of any tax relief, and gross of housing benefits (i.e., housing benefits should not be subtracted from the total housing cost). For tenants, the calculation includes rental payments gross of housing benefits (i.e., housing benefits should not be subtracted from the total housing cost).
The housing cost overburden rate is used in the Social Scoreboard of the European Pillar of Social Rights, which monitors progress in the context of the European Semester. More specifically, it is part of the Joint Employment Report (JER), which is one of the key publications of the autumn package of the European Semester.
Related concepts
- EU statistics on income and living conditions (EU-SILC)
- Overcrowding rate
- Severe housing deprivation rate