Budget Day 2019: What will change for you?

Income tax rates are dropping in 2020. Starting in 2020, the two-disc system will be introduced. As a result, you will have more net savings. View the current and future bracket systems '

The health insurance premium will go up but the deductible will remain the same and people with low incomes will receive more health care allowance. Changes are also taking place in the basic package. Read more about health insurance adjustments here.

In 2019, the increase in property taxes (OZB) was tied to a national maximum, the macro standard. From 2020, a benchmark housing costs will be introduced to make the development of local charges more transparent each year. This will allow municipalities to compare OZB among themselves. In addition to the OZB, the sewerage and waste charges will also be included in the benchmark.

In 2020, dual earners can get more mortgage based on both their incomes combined. In 2019, you were allowed to increase the highest income by 70% of the lower income. In 2020, this will become 80% to calculate your maximum mortgage.

The owner-occupied home forfait for homes with a WOZ value between €75,000 and €1,080,000 will go down by 0.5%. In 2020, the rate of the owner-occupied home lump sum will then be 0.6%. This measure is beneficial for homeowners. By decreasing the owner-occupied home lump sum, the deduction from the owner-occupied home becomes higher. As a result, the tax refund could increase. Through this measure, the government wants to accommodate homeowners for the accelerated reduction of the mortgage interest deduction.

The deduction due to no or little owner-occupied home debt will be phased out over a total of 30 years. In 2019, the deduction was already 96.67% of the addition to the owner-occupied property tax credit. In 2020, that percentage drops to 93.33%.

The top deduction rate for certain items such as medical expenses, spousal support and gifts will go down starting in 2020.

The average WOZ value of homes will increase by 8-10% in 2020. This is the expectation of the Valuation Chamber (the supervisor of the implementation of the Valuation of Immovable Property Act (WOZ))

An increase in the WOZ value can result in a higher owner-occupied home tax credit. This means that the owner-occupied home deduction decreases and so does the tax refund.

In 2020, anyone who has more assets than 30,846 euros (or 61,692 euros with a tax partner) from savings or shares, for example, must pay tax on them.

The income tax rate in box 3 will remain 30% in 2020. You can read more about taxation of your savings here.

The state pension age for 2020 is set at 66 years and 4 months. The amount of your AOW is linked to the minimum wage. How much AOW you receive depends on your age and living situation.

The net-metering scheme for solar panels will continue unchanged until January 1, 2023. This net-metering scheme means that electricity that you generate with solar panels and supply back to the grid is deducted from your own energy consumption This keeps it attractive for households and SMEs to invest in solar panels.

Starting in 2023, the balancing system will be phased out over eight years.

Switching a loan without National Mortgage Guarantee to an NHG mortgage may no longer be possible from 2020 if the home value is above the cost limit.

This proposal is not yet final. It will become clear in late 2019 whether this proposal will be approved by the Ministry of Interior.

For a mortgage with National Mortgage Guarantee in 2019, you could still co-finance the buyer's fees and additional costs if the appraised value of the house is up to 6% higher than the purchase price. From 2020, NHG plans to drop this rule. The buyer's costs and additional costs will then be at your own expense.

It will become clear at the end of 2019 whether this measure will be approved by the Ministry of Finance.

Starting in 2020, the duration of spousal support will be shortened to half of the marital period with a maximum of five years. There are a number of exceptions:

• Do you have children under the age of 12? Then parnter alimony continues until the youngest child turns 12.
• In a marriage of at least 15 years, where the alimony recipients are AOW entitled within 10 years, the alimony obligation continues until the retirement date.
• Alimony recipients aged 50 and older who were married for at least 15 years will remain entitled to up to 10 years of spousal support over the next seven years.

Curtailing spousal support can affect your maximum mortgage.

From 2020, the government wants books, newspapers and magazines delivered electronically to be subject to the low VAT rate. This plan is already laid out in a draft bill, but has yet to be incorporated into an actual bill.

In principle, the transitional law for pre-2001 annuity products ends on Dec. 31, 2020. From this date, these annuities will move from Box 1 to Box 3. The Cabinet intends to continue the transitional law as of Jan. 1, 2020, for hybrid annuities. In addition, the settlement obligation will also be abolished.

With a two billion euro fund, the government wants to address the housing shortage. From that fund, municipalities can receive subsidies for new construction projects. Housing corporations can also count on tax benefits if they start building additional houses.

An additional 15,000 temporary rental homes will be built each year. Housing corporations that build these houses will not have to pay taxes on them. The government hopes this will make it easier to reach the target number of 75,000 houses per year, as agreed in the National Housing Agenda.

Currently, a lump sum payment of personal injury compensation is not taxed in Box 1 (wage or income tax), but counts as capital in Box 3. This is therefore subject to annual tax in Box 3, known as the capital gains tax.

The possibility of excluding personal injury compensation from this capital gains tax is currently being explored.

From 2021 - 2026, the natural gas rate will increase, while the electricity rate will decrease.

Starters in the housing market now often do not get into the big cities. Private investors buy existing houses in order to rent them out again for a lot of money. In order to give starters a fair chance, the government is investigating whether this can be ended with an occupancy obligation imposed by municipalities.

For a company electric car, the additional tax rate is doubled to 8% in 2020. This applies to electric cars with a list price up to €45,000. Above this amount, the additional tax rate remains 22%. The lower rate goes up until 2026 until it reaches 22% and only one rate applies.

Currently, buyers of electric cars pay no bpm (purchase tax). In 2025, a one-time amount of €360 in bpm must be paid. After 2025, this amount will increase with inflation.

People who own electric cars will not have to pay motor vehicle tax (mrb). In 2025 they will have to pay a quarter of the mrb and from 2026 the full amount.

On Jan. 1, 2021 and Jan. 1, 2023, the excise tax on diesel will increase by €0.01 per liter.

As of Jan. 1, 2019, partners will receive birth leave for the weekly working hours. During the leave, wages will be paid in full and employees can take these leave days within 4 weeks of the child's birth.

From July 1, 2020, the father can take additional leave, up to a maximum of 5 weeks. He will then receive benefits of 70% of his income, paid by the UWV.

Some conditions have been established for taking additional leave:

• The weeks of leave must be taken within 6 months of the child's birth.
• Before these weeks of leave can be requested, the employee must first take the standard birth leave.
• Additional leave must be requested in whole weeks.

For first-time buyers, buying their own home is not yet easy. The government plans to solve the problems of starters in the housing market. One possible measure could be to abolish the transfer tax for starters and increase the tax for investors.

Owners of apartments in a VvE will no longer have to pay VAT on the electricity they generate with solar panels and supply back to the electricity grid from January 1, 2020. They will also be exempt from VAT returns and related administrative obligations. This only applies to VvEs in the Netherlands that use new small business scheme(KOR).

If you are an individual with solar panels and already have a waiver of administrative requirements, you will automatically flow into the new scheme.

Reduction in self-employment deduction

The cabinet wants to start reducing the self-employment deduction in 2020. They want to reduce the self-employed deduction by more than € 2,000. It currently stands at €7,280 but will thus go to about €5,000.

The rate for profits over €200,000 falls less than planned in 2021. It drops from 25.0% to 21.7%. For profits up to €200,000.00, the rate drops from 16.5% to 15.0%.

The maximum untaxed compensation from an employer to an employee will be increased to 1.7% of the wage bill in 2020, with a maximum wage bill of €400,000. Over the wage bill higher than €400,000, the 1.2% will continue to apply.

Allowances with a targeted exemption do not come at the expense of free space. Some examples are:

• Travel reimbursement + subscriptions to public transportation
• Meals on overtime
• Moving expenses due to work

From 2020, this will include the Application for VOG (Certificate of Good Conduct).