2025 Tax Plan finalised: important changes to take into account

1. Increased first-time buyer exemption

The property transfer tax exemption threshold for first-time property buyers has been increased from €510,000 to €525,000. Buyers aged between 18 and 35 don’t pay any transfer tax on the purchase of a property up to that amount. If you’re buying a property worth more than €525,000, this exemption doesn’t apply.

2. Gift tax exemptions in 2025

A gift tax exemption means the recipient of your gift pays no gift tax up to a certain threshold. There are various types of gift tax exemption. These are the main ones in 2025: 

• Children: €6,713 per year. If your child is aged between 18 to 39 years inclusive, the annual gift tax exemption increases to €32,195. This exemption applies only once. It increases to €67,064 if the gift will be spent on a costly training course or degree. 
• Other recipients: €2,690 per year 

According to an assessment by the Dutch Ministry of Finance, the one-off increase to the tax exemption threshold for gifts with no set spending objective has a limited effect. The Ministry estimates that scrapping this exemption would save the government €43 million. The government will share its response to these findings in the spring of 2025. Be sure to stay up to date.

3. Mortgage interest deduction is being reduced

Many cost items cannot be deducted at the highest rate (49.5%). The deduction rate on owner-occupied homes, for example, will be limited to 37.48% as of 1 January 2025. You may be able to save by repaying your mortgage or making extra repayments. This is the case if your mortgage payments – minus mortgage interest deduction – are higher than the post-tax return on your savings or investments.

4. General tax credit lower

In 2025, the maximum general tax credit will go down from €3,362 to €3,068. From 2025, the amount of general tax credit will not only depend on your income from work and home ownership (box 1) but also on your total income. This is your income from box 1, 2 and 3 as an aggregate. On the other hand, the general tax credit will now only be gradually reduced starting from an income equal to or above €28,406 (an annual salary according to the minimum wage).

5. Think about combining deductions

Some deductible costs, such as charitable donations or healthcare costs, have a threshold before you can deduct them. It could therefore be sensible to make these payments sooner or later, so that you reach that threshold. Did you know that if you donate the same amount to the same charity every year, you can also choose a periodic gift? There is no threshold in this case and you can deduct the gift in full.

6. Submit your 2024 income tax return on time to avoid tax interest

Check your provisional income tax assessment or provisional tax refund for 2024. If you need to make an additional payment for 2024, request a correction of your provisional income tax assessment or refund and submit your income tax return before 1 May 2025. This means you avoid paying 6.5% tax interest.

7. Make sure you can determine your actual return on investments

In 2028, the Dutch government will introduce a new system for box 3 that taxes actual returns. Until then, this is done using the same assumed rate of interest for everybody for returns on bank balances, other assets and debts. 

This may lead to a situation where the actual return in box 3 is lower than the assumed rate used to calculate the return. In 2024, the Supreme Court ruled that it should be possible for taxpayers to state whether the actual return is lower than the assumed return in a given calendar year. In such cases, you must be able to calculate and provide evidence of this. 

The Supreme Court has stated how the actual return must be calculated: taxpayers must consider their entire assets in box 3 (savings and investments) and any realised or unrealised gains. Taxpayers may not deduct costs, with the exception of the cost of improvements to rental properties. The Dutch government has promised to release an ‘Actual Return Statement’ (Opgaaf Werkelijk Rendement) form for this purpose. Taxpayers can submit this as evidence of the actual return and receive a rebate of any excess tax paid. In light of this, be sure to get your records in order and keep any supporting documents such as invoices.

8. Lower tax exemption for green investments

Green investments in box 3 benefit from a partial tax exemption. In 2025, the cap on this exemption will be lowered from €71,251 (€142,502 for tax partners) to €26,312 (€52,624 for tax partners). 

In addition, the tax credit for green investments will go down from 0.7% to 0.1% of the actual exempt amount of green investments in box 3. Both the exemption and the tax credit for green investments will be scrapped on 1 January 2027.

9. Be aware of anti-abuse measures for investments

The assumed return rates for investments are higher than those for bank balances and savings. If you sold investments and put the proceeds into a bank or savings account in Q4 2024, you’ll have to wait at least three months before reinvesting this money. If the money is reinvested within three months, the Dutch Tax and Customs Administration will disregard the transactions unless you can prove that there is a business motive behind them.

10. Put a tax-deductible amount into an annuity account

With an annuity, you can build up more income for later on in life. You can deposit amounts into an annuity account as either savings or investments. If you have a pension shortfall, you can deduct these payments from your income in box 1 at a maximum of 49.5%. The maximum tax-deductible percentage for annuities is 30% (up to €35,798 in 2025) of the premium basis (i.e. your income minus the part over which you will receive your state pension later). 

You can claim any deduction you have not used from the past ten years, up to a maximum of €42,108. The amounts paid in are also exempt from box 3 tax. You only pay tax on them when you have the accrued capital paid out as a benefit. 

For more information on having your annuity paid out, please see our blog post: ‘What options do you have if your annuity is about to mature?’