Overview of the 2027 Tax Plan
The tax plans for 2027 were announced on Prinsjesdag. What’s set to change in income tax? And what measures have been planned for transfer tax and sustainability? Is anything happening in box 3? We’ve set out the key proposals for you in this overview.
For each topic, you can read in-depth information and where possible, we’ve listed options for you to take action in good time. These are proposals: they may still change during the parliamentary debate.
Income tax
The higher rates in the first and second tax brackets are increasing the tax burden on income from employment. The first bracket for taxpayers under the state pension age is rising from 35.75% to 36.23% and the second from 37.56% to 38.16%. This increase in the first and second tax brackets was intended to offset the planned halving of the health insurance excess. However, the excess will no longer be halved, but the government has still decided to pursue the planned increase. The maximum working person’s tax credit will rise from €5,685 to €5,929, while the maximum elderly person’s tax credit will fall from €2,067 to €1,993.
What’s more, the income tax brackets are only partially being adjusted for inflation. Normally, tax brackets are adjusted for inflation, so that price increases don’t automatically lead to you paying more tax. The tax plan proposes to apply the adjustment at a rate of about half in the first bracket, and not at all in the second bracket. This is due to the citizens’ freedom contribution, which will be used to pay for part of the extra defence expenditure.
Mortgage interest deduction
The mortgage interest deduction will remain in place and last year’s relaxation will not be reversed. Last year, the government introduced an extra tax bracket, creating a three-tier tax system. Mortgage interest deduction was linked to the ‘new’ second bracket, which was advantageous for taxpayers because they can claim their deduction at a higher rate. The government wanted to reverse this relaxation of the mortgage interest deduction, but there’s no mention of this in the 2027 Tax Plan.
Box 3
Tax on actual returns was supposed to be introduced from 2028. The House of Representatives had already adopted the proposal, but the Senate hadn’t yet done so. Within the government, views differ on the changes to Box 3 and its coverage, so the government decided to postpone the reform of Box 3. There will be further updates in the 2027 spring budget.
Transfer tax rate
In 2027, the rate of transfer tax will fall from 8% to 7% for properties in which the buyer doesn’t intend to live themselves, such as rental properties and holiday homes. The measure applies in particular to investors, developers and housing associations that purchase or develop properties for letting. If you’re considering buying a holiday home at the end of 2026, you could save tax by having the transfer of ownership take place in 2027.
Pension
The tax plan proposes not to index the cap on pensions and annuities for the years 2027 to 2032 inclusive. At present, the cap stands at €137,800 (2026 figure). The proposed measure for pensions and annuities means the cap will not rise in line with wage developments.
Gift and inheritance tax
The minister had previously said he didn’t want to meddle with gift and inheritance tax, and he’s kept his word. The rates remain unchanged. However, the tax brackets have been widened, which is good news for taxpayers, as you won’t end up in the higher tax bracket sooner as a result of inflation.
Even so, that isn’t the whole story. The rates may be staying the same, but adjustments to things like calculation rules, exemptions and tax regulations could result in heirs ultimately paying more tax.
We had also expected news about gifts on paper and non-arm’s length loans, but they’re not mentioned in the 2027 Tax Plan.
Sustainability
Until the end of 2026, if you own solar panels, you can still offset the electricity you feed back into the grid against your own consumption (net metering). This scheme will come to an end from 2027.
What’s more, the personal allowance and tax credit for green investments in box 3 will be abolished with effect from 1 January 2028. In 2027, the personal allowance will already be significantly reduced to €200 (or €400 for partners). There were rumours that some measures might return after all, but there’s nothing in the 2027 Tax Plan.
Parliamentary debate
As the parliamentary debate hasn’t taken place yet, these measures may change. We’re monitoring developments closely and will keep you up to speed on the key changes.