Healthcare costs for the account of the homeowner
Municipal taxes will rise sharply again this year for homeowners. Dozens of municipalities are implementing an increase in the property tax (ozb) and the waste levy, according to an inventory by the Home Owners Association (VEH). This organization represents the interests of homeowners. On average, the property tax increases by 5.3 percent and the waste levy by 7.8 percent, considerably more than the inflation of 1.3 percent forecast by the Central Planning Bureau.
This is the fourth year in a row that municipal taxes have risen. The tax burden has increased annually over the past fifteen years, with the exception of 2017. The increase this year is remarkably large, according to VEH. “Normally we see taxes increase by 2 to 3 percent annually,” said a spokesperson.
Cut back or tax
The main explanation for the increase in the property tax is the increase in the costs of implementing the Social Support Act (Wmo) and youth care, say municipalities. That would increase by 7 percent annually. In order to meet the obligation to deliver a balanced budget, municipalities can only do two things, says a spokesperson for the Association of Dutch Municipalities (VNG): cut spending or increase taxes. “Municipalities have continuously cut spending in recent years. We have now reached the point where we can do nothing but increase the property tax. It’s the only button we can turn.”
From research by NRC it appears that one in three municipalities in the Netherlands – more than a hundred of the approximately 350 – is in need of money and has difficulty getting the budget around. The financial position of many municipalities has deteriorated further due to the corona crisis. VEH also says it has not yet been informed that the corona crisis plays a role.
Rising house prices
In addition to increasing healthcare costs, rising house prices also play a role. The property tax rate is partly determined by the WOZ value of real estate. “These have risen sharply, so homeowners will be hit doubly if the municipality does not adjust the property tax rate there proportionally,” says the VEH spokesperson. The interest group says it is receiving more and more reactions about the growing tax burden. “We don’t see people getting into trouble yet, but this is a very bad development.”
Both VEH and VNG say that by raising the property tax, two groups will pay for the increased healthcare costs: homeowners and users of business premises. “That’s crooked. The bill should be for everyone,” says the spokesperson for VEH, who argues for a fairer system of burden sharing, for example in the form of a residents’ tax.
The VNG argues for more money from the government to compensate for healthcare costs. “That has been our cry for help for years. The bill now falls to homeowners, but we don’t know how else to do this.”
VEH attributes the fact that the waste levy has also risen to the higher tax that municipalities have to pay for the dumping and incineration of waste. That tax increased last year from 13 to 31 euros per tonne of waste, to promote recycling. The increase is passed on to residents by municipalities.
Last month, the Center for Research on the Economy of Local Governments (Coelo) of the University of Groningen already concluded that municipal housing costs will rise faster than inflation. The survey showed that the property tax will increase by 5.2 percent in the coming year and the waste levy by 9.1 percent.
According to Vereniging Eigen Huis, 53 municipalities will increase the property tax by more than 10 percent this year. The interest group has found the largest increase in the West Frisian municipality of Opmeer, where the levy will rise by 41 percent. In Amsterdam, Ermelo, Renkum and Nunspeet, the local tax will also increase by more than 20 percent.
In a small number of municipalities – including Venlo, Goeree-Overflakkee and Weesp – the municipal tax is falling.