Modest rise foreseen for 2010 local taxes in large municipalities

Revenues from municipal taxes will rise by less in large than in small and medium-sized municipalities in 2010. Together, the four largest municipalities expect revenues from property tax to be slightly lower than in 2009.

Municipal taxes by size of municipality, 2010

Relatively strong rise in small municipalities

Municipalities with more than 100 thousand inhabitants expect to collect 0.9 percent more in taxes this year than last year. Municipalities with fewer than 20 thousand inhabitants, on the other hand, expect a rise in revenues of 4.5 percent. The difference in these developments is mainly caused by the rise in property tax revenues, which is much lower in large than in small municipalities. Property tax accounts from more than three-quarters of municipal tax revenues.

Taxes in the four largest municipalities

Less property tax revenues in four largest municipalities

Revenues from property taxes are expected to be 0.4 percent lower in the four largest municipalities – Amsterdam, Rotterdam, The Hague and Utrecht – in 2010 than in 2009. Utrecht and The Hague expect a fall, while Rotterdam will remain about the same with a rise of 0.1 percent, and Amsterdam foresees a rise of 1 percent.

In addition, revenues from sufferance tax are also expected to decrease. The Hague anticipates the intended abolition of taxes on cables and pipelines of public utility companies. This will cost the municipality an expected 15 million euro in revenues. All four municipalities expect to collect more parking fees in 2010. The total expected tax revenues in the four large municipalities together will be around the same amount as in 2009 (-0.2 percent).

Funding from general revenues in the four largest municipalities

More withdrawn from reserve

The policy of the four largest municipalities not or hardly to raise property tax rates in 2010 will have consequences for how expenditure is financed. To fund the increasing costs, Amsterdam, Rotterdam and Utrecht expect to have to withdraw more funds from their reserves. This will amount to an estimated net 408 million euro for the four large municipalities together, more than three times the amount in 2009.

Paul van der Beek