Prinsjesdag 2026: What's proposed, postponed & scrapped in new budget

On Tuesday afternoon, September 15, the Dutch government unveiled its financial roadmap for the coming years in a flurry of ceremonial briefcases, royal speeches and complex tax policies. Presented by Minister of Finance Eelco Heinen (VVD) to the House of Representatives (Tweede Kamer) at 3.30pm, the 2027 Budget Memorandum (Miljoenennota) and Tax Plan package bring a wave of fiscal shifts that directly impact residents across the Netherlands.

The Jetten cabinet's budget strategy

While budget leaks just before Prinsjesdag (Prince's Day) are a longstanding Dutch tradition, spending plans surfaced faster than usual this year when broadcaster RTL obtained confidential documents less than 24 hours after gruelling negotiations concluded between D66, VVD and CDA.

Titled "Re-earning Prosperity" (Welvaart opnieuw verdienen), the budget presented by the Jetten minority coalition focuses heavily on structural reforms, curbing welfare state spending and expanding defence capabilities. 

Although the government highlighted a headline 1,5 billion euros purchasing power package, detailed financial tables reveal a tighter reality: average purchasing power will decline by 0,1 percent in 2027, with working families facing an aggregate net tax increase of approximately 12 billion euros over the cabinet period.

Economic reality check & expert criticism in the Netherlands

The decision to place the financial burden predominantly on working households rather than wealth or consumption has drawn sharp criticism from leading economic institutions. 

Experts at the Netherlands Bureau for Economic Policy Analysis (CPB), De Nederlandsche Bank (DNB) and the Ministry of Finance have consistently warned that labour in the Netherlands is taxed too heavily, while wealth, corporate profit and consumption are taxed too lightly, as reported by de Volkskrant. 

How the Dutch government plans to cut administration costs

To keep the budget deficit below the EU 3 percent ceiling without raising corporate taxes, Finance Minister Eelco Heinen has relied on accounting measures that critics question. This includes booking 3 billion euros in projected savings by assuming ministries will fail to spend their full budgets on time due to staffing shortages, a phenomenon known as "under-execution" (onderuitputting).

The cabinet has also booked spending cuts on civil servants, aiming to save 400 million euros across 2028 and 2029 through an accelerated workforce reduction, rising to 1 billion euros per year from 2030. However, the CPB has repeatedly questioned these administrative reductions, having previously labelled similar headcount cuts "implausible".

Overview of the Dutch 2027 Tax Plan (Belastingplan)

The cabinet's tax proposals for 2027 offer a mix of subtle rate adjustments, targeted tax hikes on higher earners and changes to workplace benefits.

1. Income tax changes for workers & freelancers

Income tax rates in the first and second tax bands will drop by a minor 0,06 percentage points. However, this slight cut is offset by previously scheduled tax increases, resulting in net income tax revenues rising by nearly 4 billion euros next year and 7,8 billion euros by around 2030. This includes 3,4 billion euros collected as a "freedom contribution" (vrijheidsbijdrage) earmarked for defence spending.

Key updates for workers and the self-employed include:

• People earning over 80.000 euros gross face a collective tax hike of 750 million euros. 
• The tax-free commuting allowance (reiskostenvergoeding) increases by 0,02 euros to 0,25 euros per kilometre.
• Self-employed workers lose the starter's tax deduction (startersaftrek), which is being completely scrapped.
• Tax exemptions for staff Christmas hampers (kerstpakket), company outings and 20 percent employee discounts on company products are eliminated.

2. Consumer taxes, transport & travel

Everyday expenses will see several targeted tax adjustments across consumption, travel and motoring.

Key changes for consumers and travellers include:

• VAT on flowers, ornamental plants and hot-air balloon rides rises from 9 percent to 21 percent.
• Alcohol excise duties will resume tracking inflation.
• Tap water tax increases by 0,10 euros per 1.000 litres.
• Fuel tax relief on petrol and diesel remains extended, with the diesel discount phase-out postponed until 2028.
• Commercial delivery van motor vehicle tax drops by 50 percent, while heavy goods vehicles pay zero.
• Long-distance flight tax is fixed at 59 euros rather than 70 euros to maintain Schiphol Airport's competitiveness.

3. Housing, education & climate investments

To address housing shortages, housing corporations will be exempted from EU anti-tax-avoidance rules, costing the state up to 175 million euros annually but unlocking 6 billion euros in loans for social housing. Private developers constructing mid-market rental homes can also claim up to 10.000 euros per unit between 2029 and 2033.

Education receives an additional 668 million euros, largely undoing higher education cuts implemented by the previous administration. Basic grants for students living away from home increase by 50 euros per month from 2028, alongside 346 million euros for teacher training and new funds for scientific research centres.

Defence spending increases by 600 million euros in 2027 to nearly 29 billion euros, including 3,1 billion euros in direct military aid to Ukraine. Additionally, 1,3 billion euros is allocated for North Sea carbon dioxide storage alongside sustainability grants for farmers.

Which Dutch budget cuts were delayed or scrapped?

Operating without a parliamentary majority, the Jetten cabinet had to delay or completely abandon several controversial spending cuts to secure support from opposition parties.

Postponed policy measures:

• Box 3 wealth tax reform: Major updates to the asset tax system remain parked in the Senate until spring 2027 due to coalition disagreements over taxing unrealised versus realised capital gains.
• Unemployment benefit cuts: Proposals to shorten the maximum unemployment benefit (WW) duration from two years to one year have been delayed until 2029.
• Healthcare deductible increase: The planned 60 euros hike to the health insurance deductible (eigen risico) is delayed by a year, rising only modestly with inflation from 385 euros to 400 euros in 2027.
• Employer transition payments: Scrapping the transition payment compensation (compensatie transitievergoeding) for all employers is delayed until January 1, 2028.

Scrapped proposals:

• Accelerated state pension age hike: The proposal to raise the state pension (AOW) age at a faster pace was fully abandoned, saving state pensioners 2,8 billion euros.
• Daily benefit payout cap: Reductions to the maximum daily wage payout for maternity and invalidity benefits, dubbed the "maternity penalty" by trade unions, were scrapped.

What does the 2027 Dutch budget mean for expats?

The 2027 budget combines targeted tax hikes for higher earners with freelance changes and minor transport relief.

Higher earners and freelancers

• Internationals earning over 80.000 euros gross face a collective 750 million euros tax hike and a projected 0,2 percent drop in purchasing power.
• Employers can no longer offer tax-free perks (kerstpakket, staff outings, 20 percent employee discounts), reducing overall compensation packages.
• Freelancers (ZZP’ers) lose the starter's tax deduction (startersaftrek), tightening margins for new businesses.

Healthcare & living costs

• Compulsory health deductible (eigen risico) increases modestly to 400 euros, while basic monthly premiums are expected to rise by around 12 euros.
• Residents will pay higher taxes on tap water, alcohol, flowers, and plants, while petrol excise discounts remain extended.

Transport & education

• Commuters benefit from an increased tax-free allowance (reiskostenvergoeding) of 0,25 euros per kilometre.
• Long-distance flight tax is capped at 59 euros from Schiphol Airport.
• International students and researchers benefit from a 668 million euros education injection and a 50 euro monthly grant boost for non-resident students starting in 2028.

What happens next?

The main budget proposals will be debated in Parliament with Prime Minister Rob Jetten and Finance Minister Eelco Heinen over the coming days, where opposition parties will attempt to negotiate further amendments before final voting.