The 2027 budget: the main measures and what it means for you

The minority Dutch government published its 2027 budget on Tuesday, outlining the latest economic forecasts and its plans for the coming year. Here are the highlights:

Government and local government finances

• Inflation will average 2.7% in 2027.
• Wages will rise by an average of 3.8%.
• Economic growth will remain in line with earlier projections at 1.2%, without major upsets.
• The budget deficit will rise to 2.7%, well below the EU maximum of 3%.
• The government plans to cut €400 million from spending on its own operations, with the aim of a structural reduction of €1 billion from 2030.
• The local authorities fund will rise marginally to just under €50 billion, or €2,741 per resident.

Taxes

• Spending power will fall marginally for all but pensioners and low-income households.
• Plans to reform the Box 3 asset tax system are due in spring 2027.
• Income tax in the first tax band (up to €39.20) will hit 36.23%, up from 35.75% now.
• The income tax rate in the second tax band (up to €78,400) will rise from 37.56% to 38.16%
• The arbeidskorting – a tax break for people in work – will rise slightly.
• Employers will no longer be able to give workers a 20% discount tax free on the company’s own products.
• The startersaftrek – a discount for the newly self-employed – will be cut to a nominal €10 in 2027 and scrapped altogether in 2028.
• Untaxed travel expenses will rise to 25 cents per kilometre and has been backdated to the start of 2026.
• BTW on plants, flowers and trips by balloon will rise from 9% to 21%.
• Excise duty on alcohol will rise in line with inflation.

Defence and foreign affairs

• €600 million extra will go to defence in 2027, taking the total to almost €29 billion, including €3.1 billion in military support for Ukraine.
• €35 million will be spent on Dutch diplomatic missions abroad, partly offsetting cuts imposed by the last government. The consulate in Antwerp will remain open.
• The development aid budget will rise by €400 million a year for the next three years, on top of the extra money agreed in June to win senate support and the partial reversal of the Schoof cabinet’s €2.4 billion cuts.
• The Netherlands will not hit the OECD target of 0.7% of GDP on aid spending.

Benefits

• Cuts to slash the period for claiming unemployment benefit from two to one year have been delayed until 2029.
• A planned faster increase in the state pension age will not go ahead.
• A lower maximum for payouts to pregnant women and people on invalidity benefit will not go ahead.
• As announced earlier, low income households faced with mounting energy bills will be able to request help from a special energy fund

Healthcare

• The health insurance own risk payment will rise from €385 to €400 in line with inflation.
• €100 million is being allocated to ensure 60 to 69-year-olds can be vaccinated against shingles. The over 70s must pick up the bill themselves.
• The government expects health insurance premiums will rise by €12.50 a month – although health insurance companies decide their own rates.

Housing and infrastructure

• The housing ministry budget will top €7 billion next year.
• Of this, €940 million will be allocated to boost major residential developments in terms of facilities and green spaces.
• €630 million will go to specialised housing for the elderly.
• From 2028, people who earn too much to live in rent-controlled homes will face bigger rent increases. The check will also include a look at individual assets.
• Housing corporations will get a €425 million tax cut, allowing them to borrow an extra €6 billion to build social housing.
• Private investors will be able to claim up to €10,000 for every mid-market rental home they build, from a budget of €500 million running from 2029 to 2033.
• €1.5 billion has been allocated for road and bridge repairs until 2035.
• €300 million will be invested annually in improving transport links to new residential developments, beginning in 2030.

Education and research

• Education will get €668 million extra, largely reversing cuts to higher education imposed by the previous government.
• There will be more investment in trade schools and in scientific research.
• Funding is being set aside for the development of a national super computer and an Einstein telescope R&D centre.
• The basic grant for students living away from home will rise by €50 from 2028.
• €346 million will go to additional training for teachers from 2028.
• More money will be allocated to help people shift into teaching from other professions.
• €23 million is being allocated to provide free fruit in schools that request it.
• The government will introduce a “sport pass” for 12 to 23-year-olds of €100 to €300 to be invested in sports.

Climate

• Money will be allocated to help farmers who want to invest in making their businesses more sustainable and climate-friendly.
• €1.3 billion is being allocated to store carbon dioxide in empty gas fields under the North Sea.
• New measures to combat climate change will be announced in 2027.

Asylum and migration

• The government says spending on refugees will reach €8 billion this year but go down to €5 billion by 2031 because of EU and other measures.
• Local authorities which have not set up their own permanent refugee centres will be placed on a blacklist.
• €22 million will be invested in setting up refugee centres outside the EU in 2027.
• More money will be put into dealing with refugees who commit crimes and in secure accommodation for them.

Travel and transport

• A 10 cent reduction in the price of diesel will be phased out from 2028 not 2027.
• Tax on long-distance flights is being set at €59 instead of €74 to ensure Schiphol is not more expensive than German airports.

Royals

• Spending on staff etc. will rise from €60.8 million to €62.1 million in 2027.
• The king, queen and princess Amalia will have combined income of €2.7 million this year, but Amalia will not claim hers while she is studying.
• The royals’ income rises in line with civil servant pay, which is 0.3% this year.

This article will be updated as more information becomes available.