Prince’s Day 2025: What will change for taxes, housing and mortgages

In this article, you’ll read what might change in 2026, how it affects your wallet, and how the announced tax benefits for some are actually extra taxes for others.

Prince’s Day 2025 is unique: for the first time, a caretaker minority cabinet is presenting plans for the coming year. The main goal: protecting purchasing power, especially during this election season. But the key question is: will you really pay less tax in 2026, or does it just seem that way?

What will change? A detailed overview of the plans for 2026

Below is a bullet-point overview of the key changes for 2026.

Important to know: on Prince’s Day, plans are proposed. Only after debate and approval by the House of Representatives and Senate can they be implemented as law.

1. Income tax 2026: a lower rate, more taxes (Table 1)

In Table 1, you see the proposed tax rates for 2026 alongside those of 2025. The rate in the first bracket drops slightly (from 35.82% to 35.70%), while the second bracket increases. At first glance, that looks like good news.

But back to the key question: will you really pay less tax in 2026, or does it just seem that way? The answer: it only seems that way. Because the table correction factor (normally full inflation adjustment, this year 2.9%) is applied at just 57%, that means you move into higher tax brackets more quickly, while your tax credits grow more slowly.

What does this mean in euros?

If you earn around € 75,000 per year, you’ll pay approximately € 75 more in income tax in 2026 compared to 2025.

Do you earn less than € 38,000 annually? Then you’ll pay less tax in 2026: the tax rate in the first bracket is lower, and you’ll benefit from a slightly higher labour tax credit.

Tax credits and deductions: gains for those with employment, the self-employed lose some

The general tax credit and the labour tax credit both increase slightly. That gives a modest boost, especially for lower and middle incomes.

The self-employed, however, take a hit: their deduction drops from € 2,470 to € 1,200. This continues a trend of gradually phasing out self-employment tax benefits.

Other credits – like those for seniors or single parents – will also rise marginally. But because the inflation correction is only partial, the real value of those credits increases less than prices do.

2. Housing and mortgages: summary of the plans

So, some breathing room for renters, first-time buyers, and even investors (lower transfer tax on second homes). But homeowners of pricier properties and landlords will bear a higher fiscal burden.

What stands out in the proposals for the housing market?

First, the good news: there is more attention being paid to the housing shortage. The Budget Day documents indicate that the national government will take a stronger lead in the construction of 100,000 new homes per year.

In addition, the new policy will aim to make better use of existing buildings, reduce vacancy, and encourage cohabitation/shared housing. Municipalities will receive support for this through legislation, financial incentives, and knowledge sharing.

And the bad news for owner-occupiers? It’s mainly the imputed rental value tax (“eigenwoningforfait”) that is expected to generate additional tax revenue. Why:

• Due to rising property values (WOZ), this tax already brings in significantly more.
• In the Spring Memorandum 2025, it was announced that the rate would drop to 0.30%—but that plan has now disappeared. The rate remains at 0.35%.
• The threshold for the so-called “villa tax” (the higher rate for homes above € 1,330,000) is being raised only slightly to € 1,340,000. This is well below inflation and below average property value increases. As a result, a larger portion of expensive homes will be taxed at 2.35%, the rate that applies above this threshold.

4. VAT and excise duties 2026: holidays pricier, discounted fuel stays

In the Spring Budget, there was still talk of increasing the VAT on culture, media, and sports. That plan has been scrapped: the reduced VAT rate of 9% will remain in place for those sectors.

However, for accommodation (such as hotels and glamping), VAT will increase from 9% to 21% as of 2026. This will make holidays noticeably more expensive.

Example: a hotel stay that currently costs € 218 will increase to around € 242 next year (not accounting for inflation).

Excise duties:

• The fuel excise discount will be extended for one more year
• The tobacco excise duty remains unchanged
• The gambling tax will rise from 34.2% to 37.8%

5. Sustainability in 2026: Flight Tax Depends on Distance

Sustainability is not really a key priority for the outgoing cabinet. Still, several measures are being proposed to move the Netherlands toward a greener future:

As of 2027, a distance-based flight tax will be introduced:

• € 29.40 for destinations within the EU/Europe. This also applies to Dutch overseas territories.
• € 47.24 for specific countries in Africa and Asia
• € 70.86 for long-haul destinations or unknown end locations

Conclusion: the farther you fly, the higher the surcharge.

Other sustainability measures include:

• €1.6 billion for offshore wind farms, district heating networks, and hydrogen production
• The temporary energy tax credit for households will become permanent starting in 2026 (€ 100 million allocated)
• Increase in the waste tax for companies, to take effect by 2030
• Lowering road tax for emission-free vehicles
• Promoting the greening of the personal transport market

6. Annuities and inheritance law: mostly technical tweaks

Besides the major topics, there are various smaller changes. The 2026 Tax Collection Act (Fiscale Verzamelwet 2026) includes updates regarding annuity deductions and inheritance law.

These are mostly technical clarifications or simplifications. Those interested in the details can consult the explanatory memorandum or the summary published by accounting firm BDO shortly after Budget Day.

For most households, the impact is minimal. One notable exception: the tax treatment of unequal ownership shares in jointly owned homes. Married couples who deliberately choose an unequal ownership split when buying a house may now face higher taxes on gifts or inheritance.