Dutch coalition plans higher healthcare deductible, saves mortgage tax relief

Dutch political parties D66, CDA and VVD have finalised a coalition agreement. The plans include raising the healthcare deductible and keeping the mortgage interest deduction, which was set to be chopped. 

Dutch health insurance deductible to rise

The outgoing cabinet wanted to halve the health insurance deductible (eigen risico), but these plans were put on hold once PVV pulled out of the coalition and collapsed the Schoof I cabinet. The plan was to reduce the deductible from 385 euros to 165 euros starting in 2027, however experts argued that this would drive up health insurance premiums by 199 euros per year. 

The new coalition between D66, CDA and VVD wants to raise the deductible instead. According to insiders who have seen the coalition agreement, the incoming government plans to increase the deductible by 75 euros, from 385 euros to 460 euros, in 2027. The coalition also wants to ensure that from 2028, residents don’t pay more than 150 euros per treatment towards their deductible, reports AD. 

Plans to scrap Dutch mortgage interest deduction off the table

In the coalition’s plans, the mortgage interest deduction, which allows homeowners to deduct part of the interest they pay on their mortgage, is set to remain in place. Leading up to the 2025 snap elections, there were several discussions about scrapping the tax relief. 

The Netherlands offers the highest tax relief for homeowners in Europe, and the mortgage interest deduction forms part of that. However, together with the Affordable Rent Act, this has the downside of making it more difficult and expensive for residents to find rental homes in the Netherlands.

The Organisation for Economic Cooperation and Development (OECD) urged the government to shift from encouraging homeownership to increasing housing supply to improve housing affordability. Gradually reducing the mortgage interest deduction was one suggestion to do this.

Several parties realised the need for this, including D66 and CDA, which proposed phasing out the tax relief in their election manifestos. VVD, on the other hand, had opposing plans, with party leader Dilan Yesilgöz going so far as to say that the party would not join a coalition government that wants to get rid of the mortgage interest deduction. 

D66, CDA and VVD finalise coalition agreement

The parties which are set to form a rare minority cabinet have finalised their coalition agreement. The full plans will be officially presented during the afternoon on Friday, January 30, after which it will be debated with the informateur’s report by the House of Representatives (Tweede Kamer). 

The prospective prime minister, who is likely to be D66 leader Rob Jetten, will then go about forming the rest of the cabinet. February 23 has been pencilled in as the date that the new government will be sworn in by King Willem-Alexander.