Dutch VAT and RETT proposals following from the annual Budget Day

Abolishment of reduced VAT rates for cultural goods, services and lodging

The government plans to increase the VAT rate for most cultural, media, sports and hotel services which previously were taxed at a lowered VAT rate of 9% to a very significant 21% rate. As suppliers of these types of services cater largely to consumers, who mostly cannot deduct or reclaim VAT, the likely effect of the increased VAT rate is such services will become (much) more expensive.

Some exceptions apply:

• Schoolbooks
• Camping grounds
• Cinemas
• Day recreation services

We expect these new rules may trigger discussions on the scope of the above categories.

Decrease in RETT rate for investments in residential real estate to 8%

Budget Day plans include an initiative to decrease the RETT rate for investors in residential real estate from the current 10.4% rate to a new 8% rate from January 2026. This is contrary to recent years where the RETT rate has been trending upwards from 2% to the current rate of 10.4%. This is a welcome turnaround for investors in real estate.

Current rates and exemptions available to individuals buying a home as their primary residence remain unchanged.

This means that acquisitions of residential real estate by investors whereby the legal transfer takes place on or after 1 January 2026 are taxed at a lowered rate. Since RETT is a non-recoverable this directly positively impacts return on investment.

Key takeaway

Feel free to reach out to our team to discuss how this may impact your business or any transactions.

Reference

Belastingplan 2025 | Ministerie van Financiën - Rijksoverheid