With the seismic results of last November’s elections in the Netherlands, the right-wing Partij voor de Vrijheid (PVV) won the most seats after being largely frozen out of government since 2012. After multiple months of discussion, on 15 May 2024, a coalition agreement was finally reached. The coalition partners were the largest party in the last 5 elections, the centrist Volkspartij voor Vrijheid en Democratie (VVD), the agrarian and populist right-wing Boer Burger Beweging (BBB), and the newly-formed Nieuw Sociaal Contract (NSC), who prioritise good governance and social security. 

Eventually, it was agreed that the new government would be one where Geert Wilders, leader of the PVV, would not govern. Instead, the government would be an extra-parliamentary one, defined by the coalition partners as one where the government would have greater distance from parliamentary groups, and where party leaders would not form part of the cabinet. Under this agreement, former General Intelligence and Security Service (AIVD) chief Dick Schoof would take charge of the new cabinet, consisting of ministers from the 4 coalition partners.

Having waited for 12 months to finally receive confirmation about the government’s plans and the scale of the re-allocations of the budget towards their aims, 17 September finally brought an answer. Prinsjesdag, hosted annually on the third Tuesday of September, heralds the submission of the government’s budget. 

The following are therefore the new government’s main changes, as outlined by the 2025 budget:

Notable budget allocations outlined in Budget 2025

Subsidies for citizens

• €300m made available for child benefits
  • Average increase of €72/year per child
• €425m extra made available for child daycare subsidies
  • Specifically for parents with a combined income between €29.400 and €159.200
• €500m allocated towards rent subsidies
  • An increase of around €11,50 per month per applicable household
• €135m extra allocated towards providing free school meals in ‘less affluent’ areas
• ‘Eigen risico’, or risk excess deductibles, are being decreased to €165 per month from 1 January 2027 onwards. 
  • It remains at €385 per month in 2025 and 2026.

Migration and border security

• €50m allocated towards reform of asylum system
  • Includes strengthening of border
• €45m allocated towards the Koninklijke Marechaussee (royal gendarmerie)
  • From 2029 onwards, this becomes €151m

Housing, transport and infrastructure

• 100,000 new homes per year under this cabinet
• €5b annually allocated towards house construction
• €1,8b made available as cash incentives for municipalities that build affordable housing
• €2,5b allocated towards new roads, stations and transport links to new housing development areas
• Plans to raise the highway speed limit back to 130km/h under discussion, no timeframe for implementation raised yet
• The previous government paused various infrastructure projects to meet nitrogen emission targets. 17 of these paused infrastructure projects are under consideration to be restarted. Some have already started, for example:
  • The widening of the A62 at certain points,
  • The full electrification of the Nijmegen-Venlo railway, aka the Maaslijn. This will allow for newer trains to replace diesel-powered trains on this line, and reduce delays. 
    • €358m allocated toward its completion, scheduled for 2027
• The replanting of 602 hectares of trees to compensate for previous infrastructure projects
• €1,8b allocated this year to reinforce infrastructure protecting from water
  • This includes dike strengthening, dams and dunes.
• NS fare prices for trains will NOT be increased by 12% next year, as previously forecast. Instead, the government will subsidise 3% of the rise, and NS will cover an additional 3%. As a result, fare prices will increase by 6% instead.

Nature

• €8m allocated towards maintaining nature reserves
• €43.8m made available for the next 5 years, to stay in line with EU nature preservation guidelines

Energy

• €14b made available for the proliferation of nuclear energy production
  • Borssele power plant to be kept open until 2033
  • 4 additional nuclear power plants to be built as soon as possible
• €354m made available for investment into hydrogen fuel cell technology and infrastructure
• €275m allocated towards investment into clean energy industries and firms, through the climate fund
• €578m in subsidies to residents who make their houses more energy-efficient

Support for Ukraine

• €2,3b in military help in 2025
• €252m in humanitarian help in 2025

Military spending

• €1,5b allocated annually towards Dutch military, forming tank battalions and improving strength of national forces
• €260m made available for hiring extra military personnel

Education

• €335m in annual cuts to starter scholarships and incentive scholarships at the university level
• €500m in additional annual cuts to education funding, €66m of which will affect universities. This will take effect on January 1^st, 2025.
• The budget cut for international education is not yet fully decided. Minister Bruins still wants to discuss this with students, staff, and institutions but has announced the cut starting in 2026. This will cost universities and colleges a total of €293 million.
• The plans for the long-term study fine and the cancellation of the growth fund (€200 million) will proceed. For the long-term study fine, Minister Bruins still wants to examine feasibility and ways to discourage prolonged studies, but the reduction will remain in place.

Gambling tax

• Rises from 30,5% in 2024 to 34,2% in 2025, and 37,8% in 2026.
• This will raise an additional €202m a year by 2026.

Taxes on overnight stays

• Rises from 9% to 21%
• Takes effect on 1 January 2026

Taxes on culture, literature and sport

Taxes on the following will rise from 9% to 21% on 1 January 2026:

• Museum tickets
• Concerts, festivals and other musical events
• Art
• Books, comic books and all books above 32 pages
• Sport, including classes, gym memberships and sport matches

Sidenote: schools will get a subsidy worth €60m a year to offset these tax increases.

Income tax

• For annual incomes up to €38.441, income tax drops from 36,97% to 35,82%.
• For annual incomes between €38.441 and €76.817, a new second tax bracket has been created, with income tax set at 37,48%.
• For annual incomes above €76.817, tax rate remains at 49,5%

Road tax

• Emission-free cars to receive a 25% tax rebate, from 2025 to 2029.
• Hybrid cars no longer fall into a separate tax class from other vehicles.
• Excise tax on gasoline, diesel and LPG extended through 2025. From 2025 onwards, there will be no more inflation correction on this particular excise tax.
• Commuting costs incurred by car are now deductible from income tax at a rate of €0,23/km. Previously, costs had to be calculated by the owner, taking into account fuel, distance etc.
• For sick or disabled individuals incurring extra transport costs, a yearly payment of €925 is now available.

Energy

• Energy tax credits will now be the norm when it comes to tackling increases in energy costs.
• You no longer receive compensation for surplus energy produced from your solar panels. The government estimates it will therefore take more than the current 7 years to pay off an investment into solar panels.
• Energy tax still does not apply to energy produced and consumed at home.
• Gas tax lowered to 2.3¢/m³
  • At usage of 1020m³, the average household saves 29 euros a year.

Real estate transfer tax

• Real estate transfer tax decreases from 10,4% to 8% for 2^nd homes wherein the owner does not intend to live.

Corporate tax

• SMEs to pay more tax under new tax regulation
• Deductible income reduced from €3750 to €2470

Expat tax (30% ruling)

Previously, expats that earned upwards of €46.107, or expats under 30 with a master degree earning upwards of €35.048, were entitled to an exemption on income tax on 30% of their income. This measure was widely supported by the previous parliament, but attacked by certain right-wing factions for benefiting foreigners while locals paid their fair share. To appease both sides while maintaining the Netherlands as an attractive place for skilled migrants to work, the government has done the following:

• The 30% ruling on expat income tax remains as previously ruled through to 2026.
• Starting 1 Jan 2026, this exemption applies to 27% of income, not 30%.
• The income threshold to qualify for this exemption has risen from €46.107 to €50.436.
• For expats under 30 with a master degree, it has also risen from €35.048 to €38.388.

Conclusions

The above represents the most important or major policy announcements in the Miljoenennota, the so-called Budget document. Various changes have been made when compared to the previous, more centrist coalition’s budget plans – especially with regards to defence funding, increasing funding allocated towards addressing migration, and excise taxes on gambling winnings and other cultural activities. Other than that, we hope this overview of new policies and tax plans allows you to inform yourself and form your own opinion, even if you are not a resident or citizen of the Netherlands.