Almost all working people in the Netherlands will be better off in 2024. This is due to higher tax credits on the taxes they pay. As a result, your client will keep more of their gross salary net. For example, someone with a gross salary of €3,395 will receive €80 more per month net. For Dutch people on minimum wage who work 40 hours per week, the increase is more than €260. This is due to the increase in the minimum wage.
In 2024, the gross minimum wage will increase. This will also increase benefits such as AOW, Wajong and social assistance. The Nibud (Dutch Institute for Budget Information) states that the net social assistance benefit will increase by €130 per month next year for married couples and cohabiting partners. Single people can expect an increase of €90 per month.
In January 2024, the AOW (General Old Age Pension) age will increase to 67 years for most people. This is an increase of 2 months. After next year, the AOW age will remain the same until 2028. The AOW benefit from the state will increase considerably on January 1st. You can read the exact amount on the website of the Social Insurance Bank (SVB).
If your client has more assets than €57,000, they will pay wealth tax (with a fiscal partner €114,000). For the part of your assets above €57,000, the Tax and Customs Administration assumes a certain return. Your client then pays tax on this. This tax will increase from 32% to 36% in 2024.
In 2023, the calculation of box 3 income changed
When calculating box 3 income, the Tax and Customs Administration uses the actual distribution of assets over 3 asset categories:
• Bank and savings deposits and cash
• Investments and other assets
Life insurances fall into the category of 'Investments and other assets'. A return percentage of 6.17% (2023) applies to this. This percentage is independent of the actual return achieved. The rules for box 3, in which assets are taxed, will change. As things stand now, the changes will not take effect until 2027. Until then, there is a transitional arrangement. You can find more information on the website of the Tax and Customs Administration.
Energy tax is decreasing in 2024, while the maximum deductible mortgage interest rate is going down. Mortgage rules are getting stricter, but there's more borrowing room for energy-saving improvements.
The government is increasing the discount on energy tax from €603.04 to €631.35 per year. This is a fixed amount per connection, regardless of consumption. The €1,300 energy grant for vulnerable households is ending in 2024.
Inflation means customers can borrow less with the same income in 2024. The Nibud determines what a client can spend on their mortgage.
The better the energy label of a home, the more your client can borrow. For a home with label C or D, that's €5,000 extra, and for a label A++++ with an energy performance guarantee, it's even €50,000 extra.
Buying a home in 2024 with a less-than-stellar energy label? Extra borrowing room is available for energy-saving measures. For houses with label E, F, or G, this can be up to €20,000.
Single people with an annual income of more than €28,000 can borrow up to €16,000 extra in 2024.
The €106.671 tax-free gift for buying a home is abolished. In 2024, a one-time tax-free gift of €28.947 is still possible.
Homebuyers under the age of 35 pay no transfer tax on purchases up to €510,000 in 2024.
The maximum rate at which mortgage interest can be deducted drops to 37.03% in 2024. This mainly affects clients with an income of €68,507 or higher.
In 2024, the actual monthly payment of the student loan counts towards calculating the maximum mortgage, not the starting amount.
The limit for the National Mortgage Guarantee (NHG) rises to €435.000 in 2024 (up from €405.000 in 2023). The NHG limit is €461.000 if energy-saving measures are implemented during purchase.
With these financial shifts, navigating through your financial planning and investment decisions can seem daunting. Financial Consultancy Holland stands ready to assist with personalized advice and tailored solutions that cater to these changes. Whether it's optimizing your net salary benefits, revising your investment strategies due to box 3 taxation changes, or making the most out of the new housing and mortgage regulations, our team of experts is here to guide you. Don't navigate these changes alone. Let us assist you in optimizing your financial strategy to make the most of the 2024 financial adjustments.
Do you have questions about your financial situation in the Netherlands or would you like to get in touch with us? You can do this via our contact form and we will contact you as soon as possible. Looking forward!
Sources: ADP, Belastingdienst, Nibud, Dienst Toeslagen, Sociale Verzekeringsbank, Rijksoverheid, UWV.