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A Peek into the Netherlands 2025 Budget Priorities
In late September, the Netherlands presented its 2024 budget, totaling 457 billion euros. Key changes include adjustments to the 30% tax ruling, an increased tax rate on culture and recreation, a reduction in the public transport budget, and a priority to build new housing and neighborhoods.
Income, Taxes, and Purchasing Power
While household purchasing power was expected to rise by 1.1% in 2025, it's now projected to increase by only 0.7%, according to the Central Planning Bureau.
Furthermore, some significant tax-related changes are on the horizon:
30% Tax Ruling Adjustments: Instead of phasing out the popular 30% tax ruling for highly skilled migrant workers, the benefit will be reduced to 27% from January 2027. This tax break remains a key advantage for expats, although at a slightly lower rate.
New Income Tax Bracket: A lower tax band will be introduced, meaning those on lower incomes will pay less than the current 37% rate, easing the financial burden for many.
Lower Transfer Tax: Investors and small landlords will benefit from a reduced transfer tax rate when purchasing property, dropping from 10.4% to 8%.
Higher VAT on Culture & Recreation: Expats enjoying the Netherlands' rich cultural offerings will see a sharp rise in VAT on accommodation, books, concerts, museums, and theatre performances, increasing from 9% to 21%.
Company Tax Cuts: Businesses will see a 1.5 billion euro reduction in taxes annually.
Housing and Infrastructure
Housing Construction: The Dutch government has committed 5 billion euros to build 100,000 new homes each year. An additional 2.5 billion euros will go towards developing new neighbourhoods, making it easier for expats to find housing in the years ahead.
Public Transport Budget Cuts: Public transport services in Amsterdam, The Hague, and Rotterdam will face budget cuts of 110 million euros starting in 2026. This funding will be redirected to provincial and municipal governments to ease administrative burdens, potentially impacting expat commuters.
Healthcare
Rising Healthcare Allowance: To help offset rising insurance premiums, the healthcare allowance will increase slightly.
Lower Deductible: The health insurance deductible will gradually decrease from 385 euros to 165 euros by 2027, offering more affordable healthcare access.
Education
Free School Meals: Subsidies for free school meals will continue, benefiting children from low-income families, including expat families.
Compensation for School Book Costs: With the VAT increase affecting books, the government has introduced a compensation scheme to keep education costs manageable.
Rural School Support: More funding will be available for rural schools, ensuring they remain open even with fewer students.
Focus on Dutch in Universities: To save 293 million euros annually, the government aims to reduce foreign student admissions and promote the use of Dutch in universities.
Crime and Security
Increased Defense and Police Funding: The government has pledged to spend 2% of GDP on defense, aligning with NATO standards. The Dutch police force will also receive more funding, with incremental increases starting in 2025. Additionally, a new early retirement scheme will be introduced, benefiting various workers, including those working in the public sector.
The 2025 budget outlines significant changes for expats in the Netherlands, particularly in taxes, housing, education, and healthcare. Whether you're already living in the Netherlands or planning a move, these updates will shape your experience in the years to come.
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