Local (municipal) taxes
28.02.2024The tax system of the Netherlands is quite complex and confusing, more about it - in our article. In this article we will focus specifically on local (municipal) taxes. Letters about their payment arrive in February-March. Two letters arrive: one about the payment of municipal taxes, the second about Dutch canal maintenance tax (waterschapbelasting or waterschapslasten).
How are municipal taxes introduced and used?
Local taxes and fees are established annually by the municipality (gemeente), go to the local budget and are used to solve problems facing local authorities. The list of local taxes in different municipalities is different, but there is a rule: a tax cannot be introduced if such a possibility is not mentioned in the law. It is for this reason that some municipalities have a tax on dogs, but there is no tax on cats anywhere.
Taxes and fees are different concepts. Taxes go into the general fund of the municipality and are spent at the discretion of the municipal council, rates are set more freely than those of fees. The meetings are held to solve specific problems. The municipality cannot impose fees whose total amount exceeds the planned costs of performing specific tasks paid from the funds collected.
The list of local taxes and fees in different municipalities is different, and the applicable rates also differ. To calculate local taxes in different municipalities, you can use calculator.
Basic local taxes
Most often, residents of the Netherlands have to deal with the following types of local taxes and fees:
- real estate tax (onroerendezaakbelasting - OZB),
- sewerage tax (rioolheffing),
- tax (fee) for waste removal (afvalstoffenheffing),
- tax (fee) for the maintenance of canals (waterschapbelasting or waterschapslasten).
Real estate tax (OZB)
This tax is paid only by property owners; renters do not pay this tax. The tax amount is a percentage established by the municipality of the assessed value of the house (WOZ-waarde), calculated in accordance with Law on Real Estate Valuation (Wet waardering onroerende zaken - WOZ). Many other types of local taxes are based on the WOZ-waarde, so if you think your home's assessed value is too high, you can file a protest with your municipality.
Sewerage tax (collection)
This fee includes:
- transportation/disposal of domestic wastewater,
- drainage and storage of rainwater,
- maintaining groundwater levels,
- construction or sewage management costs.
This fee can be divided between the user and the owner, and in some municipalities it is charged only to the owner. The user's share is calculated based on the number of residents. In municipalities where the user's share is paid, it is paid by the tenant unless otherwise specified in the lease.
Garbage collection tax
Calculated based on the number of residents, it is used for the collection, removal and disposal of household waste.
Tax (fee) for channel maintenance
This local tax is often called a water tax or water tax. The tax is specific to the Netherlands, where canals play an important role. The Netherlands has to pay to treat wastewater, maintain streams, canals, dams and protect against possible floods.
Payers of this tax are divided into 2 categories:
- Residents (ingezetenen): everyone who lives in the municipality. This is usually a flat rate per person.
- Property owners (eigenaar van gebouwde onroerende zaken): this category of taxpayers also pays the second part of the tax, which is equal to a set percentage of the WOZ-waarde.
How are local taxes paid?
There are two dates at the end of the letter you received:
- Vervaldatum 1st termijn (term of the 1st installment),
- Laatste Vervaldatum (last deadline).
The tax can be paid in two installments no later than the specified dates. If you want to pay your tax monthly, contact your municipality (this can usually be done through their website).
Municipal tax benefits
If you cannot pay your council taxes, you can apply to your municipality for a waiver. Often such an appeal can be submitted through your municipality’s website. When making a decision on your request, the municipality will analyze your:
- Resources. Assets should not exceed those for which social assistance is assigned, but the requirements for benefits are more stringent. The municipality will determine your annual solvency.
- Income.
- Vacation pay. Holiday pay is assumed to be 8% of your salary. If you receive more or less holiday pay, you need to report this to the municipality.
- Debt on taxes and fees. If you have debts, report them to the municipality.
Based on the results of the analysis, the municipality will make a decision: you may be refused, or you may be exempted from municipal taxes partially or completely. When making a decision, the municipality must focus on Мanagement.
