Budget day 2024

September 17, 2024


With Budget Day (prinsjesdag) 2024 now behind us, the Dutch government has laid out its financial plans and priorities for the upcoming year. The Miljoenennota 2024 reflects a balancing act between supporting vulnerable households and maintaining fiscal responsibility. Several developments are particularly relevant for expats living in the Netherlands:

30% ruling

In a significant move, the Dutch government has largely maintained the existing expatriate tax regime known as the 30% ruling:
  • The tax-free percentage will be slightly reduced from 30% to 27% of the salary.
  • This adjustment is much less severe than previously proposed reductions, reflecting the government's recognition of the regime's importance in attracting international talent.

Income tax

The government plans to introduce changes to the income tax system that could affect expats:

  • An additional tax bracket will be introduced in the income tax structure.
  • The rate for the first bracket will be lowered, potentially benefiting middle-income earners.
  • However, a reduction in the general tax credit may partially offset these benefits.

Housing market

For expats considering property investment or rental:

  • The transfer tax (overdrachtsbelasting) for houses that buyers do not intend to live in themselves will be reduced from 10.4% to approximately 8%. This could make property investment more attractive.

Energy and sustainability

Several measures related to energy and sustainability may impact expats:

  • Lower energy tax on natural gas in the first and second brackets, potentially reducing energy costs.
  • The net metering scheme for solar panels will be phased out by January 1, 2027. While owners will still receive compensation for excess electricity, it will be at a lower rate than the current scheme.

Transportation

For expats considering electric vehicles:

  • From 2026, there will be a new discount on motor vehicle tax for fully electric and hydrogen vehicles.

Healthcare

Changes in healthcare costs that may affect expats:

  • The healthcare insurance deductible will be halved from €365 to €165 per year, starting in 2027. Until then, it remains frozen at €365.

International travel

A new measure that could impact expats who frequently travel:

  • From 2027, an additional tax will be imposed on long-distance flights to compensate for higher CO2 emissions. The exact amount is yet to be determined.

While the 2024 budget aims for "solid budgeting for prosperity and stability," it presents a mixed bag for expats. The preservation of the 30% ruling, although with slight modifications, is undoubtedly positive news. Changes in property taxation, energy policies, and healthcare costs may offer new opportunities and challenges for internationals residing in the Netherlands.