Important changes to Dutch law in 2019
When the clock struck midnight on December 31, 2018, a new year began and a great number of new rules and regulations came into effect. Take a look at what changed on January 1, 2019.
Dutch law changes affecting families
This year, a few changes that will affect families have already come into effect, namely the increase of partner leave from two days to five, for partners who work five days per week. Those who do not work full-time are entitled to leave equivalent to the number of hours they work per week.
Childcare benefit will also increase this year to help cover the cost of daycare and after-school care. Childcare providers will also face changes this year, as stricter quality requirements must be adhered to.
For example, the maximum number of children per childcare employee must now be three, instead of the previous maximum of four. Childcare providers are now also obliged to give feedback on a child’s pedagogical development.
Dutch employment, income and pensions
The maximum duration of the 30% ruling has now been cut from eight years to five. This tax advantage allows highly-skilled migrants, who meet certain requirements, to receive 30 percent of their wages tax-free. There will be a transition period for the cut to this benefit until 2021.
This year marks the first steps in the changes to the Dutch tax system. With an increase in employee tax credit and general tax credit, those working in the Netherlands can expect to take more pay home. The government will also be increasing the minimum wage, some unemployment benefits and the transition allowance for employees who have been dismissed.
Corporate tax is also transitioning, with Box 1 rates now at 19 percent and Box 2 at 25 percent. As for pensions, the state pension has increased and those of pension age will benefit from a higher tax credit.
Healthcare developments in the Netherlands
Own risk or eigen risico is still frozen at 385 euros and the basic package set by the government is now more comprehensive; however, premiums have risen this year. In order to offset the higher monthly premiums, the amount of healthcare allowance those that meet certain requirements are entitled to has increased.
Additionally, personal contribution for the purchase of prescription medicines has been capped at 250 euros. Once this threshold has been met, your insurer must reimburse your prescription costs.
Consumer prices on the up
Low VAT rates have gone from six to nine percent. This means that your groceries, water costs, books and trips to the hairdresser will be more expensive, amongst other things. Not only will you pay more for groceries, but also for using gas in your home, as the tax on gas increases. The tax on electricity, however, will decrease.
Housing changes in 2019: rent and mortgages
If you are renting a house, your rent may increase by a maximum of 5,6 percent from July 1, 2019. For those living in social housing, monthly rent is capped at 720,42 euros. Mortgages can now only be borrowed for up to 100 percent of a home’s value. Costs that you accrue when buying a house, such as a notary, advice and appraisal fees, can no longer be financed from your mortgage.