What the 2026 Budget Memorandum Brings: Key Changes
The 2026 Budget Memorandum has been published, and although the cabinet is in a caretaker role, it still contains decisions that can affect your financial situation. This article summarizes the main points: what will change, what you can expect, and what to look out for.
Introduction
Every year on Budget Day, the Dutch government lays out its plans: which expenditures will rise, which taxes will change, and where investments will go. Because the cabinet is demissionary, few major changes are expected. Still, some adjustments will be made, which we outline below.
Main changes for 2026
Taxes & purchasing power
- Adjustment of tax brackets and tax credits
Brackets and tax credits are only indexed for about 46.2% of inflation. This means they do not fully keep up with rising prices, leading to a higher relative tax burden for many people.
- Purchasing power grows slightly
On average, employees, benefit recipients, and pensioners will see a small increase in purchasing power.
- Health insurance premium
Premiums will increase moderately, by around €10 to €13.
Wealth & box 3
- Notional return and tax-free allowance
The notional return for “other assets” in box 3 rises from 5.88% in 2025 to 7.78% in 2026. At the same time, the tax-free allowance decreases from about €57,684 to €51,396 in 2026.
- Bond taxation loophole closed
Rules for bonds with accrued interest are tightened: the exemption for short maturities lapses for the rebuttal scheme (except for bank deposits). Bonds must be valued at fair market value.
- Vacancy ratio for rented homes
Rented properties can be valued at market value if that value is at least 10% lower than the value under the vacancy ratio. Rules are also tightened for non-arm’s length rentals between related parties.
Entrepreneurs, self-employed & income tax
- Self-employed deduction reduced further
The self-employed deduction remains at €1,200 in 2026 (with a final reduction to €900 in 2027).
- Alternative to “lucrative interest” regime
Options are being considered to tax “lucrative interests” (e.g., private equity shares granted as compensation for work under highly favorable conditions) differently, possibly partly in box 1 instead of box 2.
- Abolition of partial non-resident taxpayer status
From 2026, it will no longer be possible to opt for partial foreign taxpayer status.
- Annuity payments
Payments that do not meet conditions for tax-free treatment will be taxed as regular income, with retroactive effect from April 2025 in some cases.
Mobility & energy
- Fuel excise duty reduction extended
The temporary discount on fuel excise duties will be extended by one year. As of January 1, 2026, the discount remains about 17.3 cents per liter for petrol and 11.1 cents for diesel.
- Motor vehicle tax (MRB) for electric cars
Between 2026–2028, electric cars will receive a 30% discount in MRB (higher than the previously planned 25%). From 2030, the discount will be eliminated entirely.
- Company car tax for EVs
From 2026, new electric cars will be taxed at the same 22% rate as petrol and diesel cars, ending the lower EV benefit-in-kind rate.
Other important measures
- Planned cuts to public transport in major cities will not go ahead.
- The budget deficit is expected to be around 2.9% of GDP in 2026, just below the EU norm of 3%, with a decline expected in later years.
- Extra investments are allocated to the tech industry, prisons, and certain social programs. For example, the education opportunity scheme for disadvantaged children will receive additional resources.
- The reintroduction of reduced-duty red diesel will not take place.
Impact & what to watch out for
- Savers and investors: people with assets above €51,396 will likely feel the impact of higher box 3 taxes, especially those with shares or second homes.
- Self-employed and partnerships: the further reduction of the self-employed deduction makes profit and cost planning more important. This may lower the point at which incorporating as a BV becomes fiscally more advantageous.
- Car owners / EV drivers: buying an electric vehicle in 2025 may be more attractive, as new MRB and company car rules will apply from 2026.
- Families and lower incomes: limited inflation adjustment means that rising costs (energy, rent, etc.) are not fully compensated. Purchasing power grows slightly, but margins remain tight.
Conclusion
The 2026 Budget Memorandum shows that the government mainly opts for continuity: many measures continue existing policies, with stricter rules in areas such as wealth taxation, mobility, and self-employed deductions. Inflation pressure remains tangible, and while purchasing power improves slightly, many adjustments are incomplete.
