The federal government has agreed on a series of tax measures, including extended fiscal deductibility for hybrid vehicles and a reduction in VAT from 21% to 6% for demolition and rebuilding projects, according to the office of Finance and Pensions Minister Jan Jambon on Saturday.
The tax measures and pension reforms are essential to get the country back on track, the Jambon office stated. Part of the effort will come from the strongest shoulders, through better monitoring of the securities tax, phasing out federal housing tax benefits, reforming DBI deductions, and increasing VAT from 6% to 21% for fossil fuel boilers.
As electric vehicles may not be an option for everyone, a longer transition period for hybrid vehicles is introduced. The government aims to persuade self-employed individuals to switch to newer, more efficient models. Over 300,000 self-employed individuals still drive cars with combustion engines older than five years, despite tax incentives for electric cars. A 75% deductibility rate will be available until the end of 2027, gradually reducing to 0% by 2030, but only the greenest hybrid cars will qualify.
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Construction federation Embuild expressed satisfaction with the permanent 6% VAT rate for residential demolition and reconstruction projects. They see it as a significant boost for the renewal and expansion of the housing stock.
The limit for tax-free supplementary income with a flexi-job will increase from €12,000 to €18,000. Additionally, there will be substantial increases in the fiscal thresholds for student employment, ensuring that parents are not penalised if their student earns slightly more.
