‘Prinsjesdag’ Budget Day – Plans for 2021

Binnenhof with Grote Kerk in the background
Published:
16/09/2020

‘Prinsjesdag’ Budget Day – Plans for 2021

On ‘Prinsjesdag’, the Dutch government announces its plans for the coming year. This year, the Opening of the Parliament was held in the Grote Kerk instead of the ‘Ridderzaal’ (Hall of Knights) as was traditionally done. Many things have changed because of the coronavirus and  King Willem-Alexander gave credit to the people for their resilience in his Speech from the Throne.

He expressed his admiration and gratitude “to all the healthcare workers and everyone else in our society who has done all they can to deal with the COVID-19 crisis". And assured that "the government is opting not to cut spending at this uncertain time, but instead to invest in preserving jobs, good public services, a stronger economic structure, and a cleaner country, both now and in the future. These are the pillars on which rest the government’s plans for the year ahead.”

Following is a summary of the plans for 2021 (these plans are subject to approval by the House of Representatives and the Senate):

 

Taxes

The Tax Plan 2021 package aims to stimulate economic growth in the coronavirus crisis, and the cabinet has reserved €1 billion for tax relief.

Personal tax

  • Savers and small investors with assets up to €50,000 (or €100,000 with a tax partner) will no longer pay tax on those assets from 2021. The tax rate, however, will increase slightly from 30% to 31%.
  • In 2021, the basic income tax rate will decrease from 37.35% to 37.10%. The government will lower this rate further between 2022 and 2024, to 37.03%. Tax credit for the elderly will also be increased.
  • From 2021, home buyers aged 18 to 35 will no longer pay transfer tax. However, investors are going to pay more: from 6% to 8%.

Corporate tax

  • The high corporate tax rate will not be reduced, instead it will remain at 25%.
  • The reduction in low corporate tax rate from 16.5% to 15% will proceed as planned. In addition, more SMEs will pay this lower rate in the coming years. From 2021, the low rate will apply to profits up to €245,000 instead of €200,000. In 2022, this limit will increase further to €395,000.

 

Healthcare

  • In addition to the agreed bonus of €1,000 nett in 2020, healthcare workers will receive a second bonus of €500 nett in 2021.
  • To make working in the healthcare sector more attractive, the government will allocate an extra €20 million from 2021. This budget will increase in the coming years.
  • Municipalities will receive an additional €300 million in 2022 earmarked for youth care.
  • €26 million will be invested in eight expertise centres for children and young people with multiple and complex problems.
  • €200 million has been earmarked for accommodation with guidance support for the homeless.

 

Work and income

  • From 2021, the cabinet will invest €1.4 billion to retrain or re-educate people who have lost their jobs or businesses to help them transition to another line of work.
  • The state pension age will remain 66 years and 4 months in 2021. After that, the state pension age will rise annually, up to the age of 67 in 2024.

 

Education and culture

  • In addition to the general support measures, the cabinet is earmarking €482 million extra for the cultural sector. The cultural and creative sector can also rely on the general support measures from the emergency fund. This means that more than €700 million is expected to be available for culture in 2021.
  • The cabinet allocates €32 million annually to help overcome the shortage of teachers.
  • In 2021, the cabinet will support the education sector with € 195 million to overcome youth unemployment.
  • The government will allocate €234 million in 2021 to cover the extra costs due to more students than was forecasted.

 

Housing

  • The government has earmarked a total of €150 million to invest in housing so that starters and tenants have a better chance of finding an affordable home.
  • In 2021, the transfer tax for starters will be reduced.
  • Tenants with a low income and a relatively high rent can request a rent reduction in 2021. That was already possible before, but was not mandatory for housing corporations. The cabinet is working on a bill that will make this mandatory.

 

Climate

  • In the coming years, the Ministry of Infrastructure and Water Management will invest €200 million in modifications to deal with the consequences of extreme weather.
  • From 2021 onwards, more money will be made available every year for tackling the nitrogen issue.
  • Until 2030, the cabinet will make €300 million available annually to reduce greenhouse gas emissions.

 

Entrepreneurs and businesses

  • The cabinet expects to spend €12 billion on the economy and labour market recovery. This is necessary to support companies, employees and job seekers who are facing problems due to the coronavirus crisis. The money is part of the third support and recovery package to help businesses during this coronavirus crisis. Read more about the extended coronavirus support.
  • Over the next 5 years, €20 billion will be made available in the National Growth Fund for long-term investment in prosperity.

 

For more information about the government’s plan in other sectors, please visit rijksoverheid.nl (in Dutch).