On 24 June 2026, the Council of the European Union adopted a recommendation setting out the economic, social, employment, structural and budgetary policies for the Netherlands. The recommendation, published as a Council note, establishes binding net expenditure growth limits from 2026 to 2030 and calls for reforms to reduce tax distortions, increase housing supply, and improve long-term care cost-effectiveness.
The fiscal path requires the Netherlands to limit net expenditure growth to 4.7% in 2026, 3.5% in 2027, 3.1% in 2028, 3.5% in 2029, and 3.7% in 2030, with cumulative growth from the 2025 base reaching 19.9% by 2030. The Council notes that in 2025 net expenditure grew by 7.2% annually and 10.6% cumulatively over 2024-2025, exceeding recommended rates by 1.5% and 1.0% of GDP respectively. For 2026, projected growth of 4.9% exceeds the recommended 4.7% by 0.1% of GDP.
On tax reform, the Council recommends reducing unequal treatment of mortgage interest deductions, imputed rent, pension contributions, and assets in closely held companies, with a possible transition to a capital growth tax by 2028. To address housing supply bottlenecks, the Netherlands should streamline planning and permitting (currently taking 6-7 years), simplify building regulation, make more land available, and tackle labour shortages, nitrogen deposition, and grid congestion. In the private rental market, the Council advises recalibrating regulated rents in line with property valuations to stimulate investment and reduce mortgage debt incentives.
For long-term care, the recommendation calls for aligning co-payments with care costs and investing in prevention and community-based care, with the coalition government aiming for structural savings of about 0.2% of GDP. The Council also urges rapid deployment of new investments from the mid-term review of cohesion policy, linked to five priorities in the Mid-Term Review Regulation.
The Council assesses that the Netherlands is no longer experiencing macroeconomic imbalances, as vulnerabilities related to household debt, the housing market, and the current account surplus have lessened. However, it warns that remaining vulnerabilities require continued monitoring and structural reforms.
Stakeholder impact - Dutch government: Must adhere to strict net expenditure growth limits, requiring fiscal discipline and potentially difficult spending cuts or tax increases. The recommendation is legally non-binding but carries political weight under the EU's economic governance framework. - Homeowners and mortgage borrowers: Tax reforms targeting mortgage interest deductions and imputed rent could increase housing costs, while a shift to capital gains taxation may affect property investors. - Housing construction sector: Streamlined planning and permitting, along with measures to address labour and grid constraints, could accelerate project timelines and reduce costs, benefiting developers and construction firms. - Long-term care providers and patients: Aligning co-payments with care costs may increase out-of-pocket expenses for some patients, while investment in prevention and community-based care could shift service delivery models.
Institutional follow-up The Council recommendation is addressed to the Netherlands, which is expected to reflect it in its national policies and report on progress in its annual Stability Programme and National Reform Programme. The European Commission will monitor compliance and may issue further recommendations if deviations persist.