Flemish nationalist N-VA, socialist Vooruit and Christian democrat CD&V have reached a coalition agreement for a new Flemish government. VRT News has been given access to the substance of the accord. What does it mean for our taxes?
Tax cuts and hikes!
The new government has promised significant new investments. Investing costs money. Say government finances and you immediately think of taxes. Some taxes will now be increased, others will be reduced.
To start with the good news: inheritance taxes are being cut.
Registration fees on the purchase of a first owner-occupied home will also be lowered, from 3 to 2 per cent, from 1 January 2025.
The government is also planning a new Flemish tax shift ‘making electricity gradually cheaper at the expense of fossil fuels’.
Taxes on betting and games of chance are going up.
The government is also introducing a completely new tax: a road tax on electric cars. Until now, owners of electric cars were exempt from road tax, but that tax party is now coming to an end.
Balanced budget by 2027
Earlier last week, negotiators for N-VA, CD&V and Vooruit reached an agreement on the Flemish budget. As budget minister, the new Flemish PM Matthias Diependaele (nationalist/N-VA) already insisted on the importance of a balanced Flemish budget by 2027 during the last parliament.
The parties have now agreed that in three years' time, the Flemish government's expenditure and revenue should be balanced.
‘We envisage and will maintain a balanced budget from 2027 onwards. We are making wise choices and will deploy our resources where they are needed most. We want a well-performing government that focuses on its core tasks,’ the coalition agreement reads.
More expensive service cheques (aka titres-services)
Earlier this week, it was suggested that the price of service cheques would rise: from €9 to €10. It will also no longer be possible to deduct the outlay for services cheques from your taxable income. The coalition agreement states: ‘We are improving the pay and working conditions of domestic workers to keep their work attractive and workable.’
‘In the interests of transparency towards consumers and with regard to staff working conditions, the government will hold discussions with the sector regarding administrative costs. Sector profitability will be taken into account.’