Real Estate Budget Day update 2026

CORE REAL ESTATE

• The bill to freeze rents in 2025 and 2026 was not submitted following the advice of the Council of State, political developments, and in order to bring stability and progress to public housing. This results in higher expenditures for the rent allowance (492 million euros structurally);
• To accelerate the development of (starter) housing for vulnerable groups, including urgent seekers, displaced persons, and permit holders, the Incentive Scheme for Flexible and Transformation Housing (SFT) is being expanded. Municipalities will receive a total of EUR20,000 per newly realized housing unit, including a component for social management. Of these homes, 30% must be designated for status holders and/or displaced persons from Ukraine. An additional EUR79 million is being made available for this purpose, on top of the already available EUR100 million in the SFT (a cumulative total of EUR179 million);
• As the bill to freeze rents has been withdrawn, the reserved funds (EUR270 million for 2026 and EUR405 million for 2027 and 2028) intended for investments in social housing to compensate for the loss of rental income due to the rent freeze have also been cancelled.

 

ENVIRONMENTAL LAW

Nature

Nitrogen approach
The government aims to reduce nitrogen levels in nature and promote ecological restoration, thereby enabling the issuance of permits for projects in industry, defense, agriculture, housing construction, and airports to resume. In addition to the Start Package, the government is allocating EUR2.6 billion in one-off funding and approximately EUR300 million annually for the nitrogen approach. These funds may be used, for example, for modernizing livestock housing, voluntary farm closures, and ecological restoration measures such as combating soil desiccation.

An additional EUR600 million has been earmarked for agricultural nitrogen reduction measures in the Veluwe and the Peel regions. Furthermore, voluntary cessation schemes for farmers, funding for innovation in livestock housing, and subsidies for nature improvement projects will be introduced. Efforts will also be directed toward the extensification scheme for the dairy sector, designed to reduce greenhouse gas emissions and lower manure production.

The industrial sector will also contribute to nitrogen reduction measures through the Peak Polluters Industry Approach (API). These voluntary, above-legal-requirement measures focus primarily on reducing ammonia emissions from industrial companies identified as major polluters due to their high emission levels.

Agri-Environmental Management

The government will allocate EUR287.5 million annually for agri-environmental management. As a result, the area under active management will increase from 100,000 hectares to 280,000 hectares. In total, the government is investing EUR5.6 billion in measures aimed at restoring nature and reducing nitrogen, alongside EUR500 million annually for agri-environmental management.

Industrial sector

The national CO₂ levy for the industrial sector will be suspended. Although the scheme will formally remain in place, this policy change will reduce revenues from the levy on industrial companies to nearly zero. At the same time, the CO₂ levy for waste incineration plants will be increased, leading to higher expected revenues.

CO₂ Reporting Requirement
The mandatory mileage registration requirement will be lifted for small and medium-sized enterprises (MKB). Since July 1, 2024, employers have been required to record and report all business travel and commuting by employees to the Netherlands Enterprise Agency (RVO) as part of the CO₂ reporting obligation. To reduce the regulatory burden for MKB's the reporting requirement will only apply to employers with 250 or more employees.

 

Energy

Energy Transition
In the 2026 Climate Fund budget, EUR1.6 billion has been allocated for projects including offshore wind farms, district heating networks, and hydrogen production. This will accelerate the transition to a sustainable economy and society. With the update of the National Energy System Plan (NPE) in 2026, the caretaker government will set the direction for the energy transition and the development of the Dutch energy system in the medium term.

One of the major investments is the construction of new offshore wind farms. Wind energy is expected to become the primary source of renewable electricity in the Netherlands in the coming years. To ensure progress, the government is continuing the development of offshore wind capacity. The Offshore Wind Action Plan increases the likelihood of successful tenders by allocating nearly EUR1 billion from the Climate Fund to support the construction of 2 gigawatts of new offshore wind farms next year.

Gas

The government does not want to become overly dependent on a single energy source (green energy) and instead wants to secure a diversified energy mix. To safeguard gas supply security, the caretaker government will ensure that gas storage facilities are filled, and national production is optimized. A budget of EUR7.8 billion has been reserved to enable state-owned company EBN to adequately fill the gas storage facilities. 

Grid Congestion

Grid congestion could delay progress in achieving renewable energy ambitions. In cooperation with regional authorities and TenneT, the caretaker government is working toward a new approach to significantly shorten project lead times. It is also prioritizing the accelerated physical expansion of the national high-voltage grid.

Nuclear Energy

The caretaker government foresees an important role for nuclear energy and is continuing preparations for the construction of two to four new nuclear power plants. It also aims to keep the Borssele Nuclear Power Plant (KCB) operational beyond 2033. To achieve its nuclear ambitions, the government is stepping up efforts in knowledge development and innovation in partnership with industry, research institutions, and educational organizations.

Hydrogen, Heat, and Energy Efficiency

Through subsidies, the caretaker government supports the import and production of renewable hydrogen via H2Global and the OWE scheme (large-scale production of fully renewable hydrogen through electrolysis), as well as the production of low-carbon hydrogen through the SDE++ subsidy scheme.

On July 3, the House of Representatives adopted the Collective Heat Act, enabling the realization of sustainable heat solutions. Additionally, the EU Energy Efficiency Directive is being implemented, aimed at achieving greater energy savings for businesses, institutions, and households.

 

TAX LAW

Temporary transparency election option for entities or funds qualifying as non-transparent FGR

As a result of the changes in the Dutch entity classification rules as 1 January 2025, certain transparent entities or funds which fall within the new definition for Fund for Mutual Account (fonds voor gemene rekening)(FGR) qualify as non-transparent for Dutch corporate income tax purposes as of 1 January 2025. In order to avoid such undesired change, Dutch policy guidelines allowed for entities or funds to change their bylaws or fund conditions prior to 1 January 2026.

As it appears, in practice some entities or funds have difficulties to meet the 1 January 2026 deadline and, given that new changes in the definition of FGR are expected as per 1 January 2027, certain entities or funds are therefore allowed to opt to maintain a transparent status if they meet certain conditions. This prevents a potential situation where an entity of fund would change status (transparent or non-transparent) for Dutch corporate income tax purposes multiple times in a short timeframe. This temporary measure ends on 1 January 2028.

Box 3 reforms - higher deemed returns, lower tax-free allowance

Effective January 1, 2026, significant changes will be implemented in the taxation of assets under Box 3. The deemed return for the category other assets (overige bezittingen) will be increased from 5.88% to 7.78%. At the same time, the tax-free allowance will be reduced from EUR57,684 to EUR51,396 per taxpayer.

These adjustments are part of a broader reform of the Box 3 system, through which the government aims to better align the fictitious return with actual returns. However, the new system based on actual returns has been postponed until at least 2028.

Taxpayers who achieve a lower actual return than the deemed percentage can continue to make use of the so-called counter-evidence scheme. This scheme allows individuals to demonstrate that their actual return is lower, which may result in a reduced tax assessment.

Transfer tax rate lowered to 8% for residential investment properties

As of January 1, 2026, a special transfer tax rate will apply to residential properties. The rate is set at 8% and applies to properties that do not qualify as an owner-occupied dwelling, but are acquired, for example, as an investment. If you acquire a property in which you will reside permanently yourself, the reduced rate of 2% will continue to apply after 1 January.

Introduction of VAT revision rules for certain immovable property services

Until now, (only) (re)construction alone triggered the start of a VAT revision period. This period (generally) spans 10 years from the date of first use. The concept of “revision” means that if the use of the immovable property changes within this period (for example, from VAT-taxed to VAT-exempt rental), the initial deduction of investment VAT must be adjusted. After the year of first use, this entails a correction of 10% per remaining year of the revision period. Thus, if on January 1 of the final year of the revision period the rental changes from VAT-taxed to VAT-exempt, the landlord would, in principle, be required to repay 10% of the initially deducted investment VAT to the tax authorities.

As of January 1, 2026, (substantial) investments in existing buildings may also trigger a new VAT revision period. This revision period will span 5 years. The scheme applies only to so-called “immovable investment services” with a value of at least EUR30,000 (excluding VAT).

21% VAT on Short-Term Accommodation in the Hotel, Guesthouse, and Holiday Sector

Until now, a reduced VAT rate of 9% applied to such services. As of 1 January 2026, the standard VAT rate of 21% will in principle apply to short-term accommodation services provided within the scope of the hotel, guesthouse, and holiday accommodation sector. 

Carbon dioxide levy for industry pause till 2030

The CO₂ tax for industry will be paused until at least after 2030 by reducing the rate of this levy to zero. Currently, the levy in 2025 will be EUR21.14 per ton of CO₂ emitted, on top of the cost of a European emission allowance (ETS).