Dutch municipal housing costs increase annually by an average 2.2%

In the past 15 years, municipal housing costs have increased by an average of 2.2% a year. Sewerage charges rose the most between 1998 and 2013, by an average of 5.6% a year. The immovable property tax and waste collection levy rose much less dramatically. This has been revealed by research conducted by COELO and published today in the magazine B&G. COELO (the Centre for Research on Local Government Economics) is a research institute linked to the University of Groningen.

The sewerage charges cover most of the costs municipalities incur regarding the sewer system and collection of rainwater and groundwater. In the past 15 years, the sewerage charges have risen much more sharply than the immovable property tax and waste collection levy – the average annual increase was 5.6% a year. Over 15 years, that is an increase of € 102. The sewerage charges increased partly because municipalities had to invest heavily to conform to stricter environmental requirements. In addition, the costs coverage, that part of the costs covered by the sewerage charge, also rose.

Immovable property tax (Ozb)

The Ozb is the most important real disposable income for most municipalities. The rate is linked to the ‘WOZ-waarde’, the value of a house for the purposes of the Valuation of Immovable Property Act. The amount that households pay on average only rose by € 6 between 1998 and 2013. This is because the Ozb for occupied dwellings was scrapped in 2006, and only home owners still pay Ozb.

Waste collection levy

The income from the waste collection levy is used to cover the costs of collecting and processing waste. The average waste collection levy for households with several members was € 83 more in 2013 than in 1998. That is an average annual increase of 2.5%. The average rate increased sharply until 2005. After that the increase levelled out, and since 2011 the levy has decreased slightly on average. This is because since 2005, municipalities have more often been able to sign new, favourable contracts with waste collectors.

Municipal housing costs

The Ozb, the waste collection levy and the sewerage charges together form the municipal housing costs. They have increased on average by 2.2 % a year. This is identical to the average annual rate of inflation. This limited increase is partly due to the Ozb rates for occupiers being scrapped. If we leave that out of consideration, the average annual increase is 3.8%.

Uncontrolled increases?

The picture that people have that municipal housing costs are rising indiscriminately is thus not the case. When the costs decrease the municipalities adjust the rates to match, as is shown by the development in the waste collection levy. In the near future, municipalities are going to be getting extensive new responsibilities as a result of three major decentralization projects (the Exceptional Medical Expenses Act (AWBZ), the Youth Care Act and the Participation Act). Only time will tell whether municipalities will be able to fund these via the compensation they will be getting from the national government, or whether the municipal taxes will have to increase more sharply than has been the case for the past 15 years.

More information

- Maarten Allers, tel. 050 - 363 37 45, or Lieneke Janzen, 050 - 363 36 23, coelo@rug.nl.
- L. Janzen, C. Hoeben, Ontwikkeling gemeentelijke woonlasten 1998-2013, tijdschrift B&G, jaargang 40, nummer 4, juli/aug 2013.
- Watch the video in Unifocus on the COELO, Economics of local government