🦜 PerchPulse - The Netherlands Market Update September 2023 🦜

A warm welcome to the September issue of PerchPeek’s Netherlands Market Monthly update! 

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Here’s where you’ll find the hottest updates around employee relocation and international talent strategy, insights from our experts on housing and cost-of-living news affecting your staff, the latest trends in global mobility, and tips and tricks on ways to support your teams. 

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A fly-by summary

• The 30% tax ruling for expats in the Netherlands will be capped for the first time as of 2024, impacting the highest earners - what this means for HR process and strategy
• Despite the rental crisis and increasing calls to limit international student numbers, student applications are up +7% YoY, to 18,000 - new rental market trend for HR leaders
• In light of rental crisis, Amsterdam authorities launch new web tools to facilitate moving to the suburbs - key intel on various areas to share with home-hunting employees

• The cost of learning to drive in the Netherlands has shot up to over €3,000, up +24% since 2021 - a reminder of licence rules and tips on car sharing to help support staff

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Talent strategy: 30% tax ruling for expats to be capped in 2024 for the highest earners - what this means for HR leaders and TA strategy

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The 30% tax ruling for expats in the Netherlands is to be capped as of 2024, but what does this mean in practice, and what will be the impact on HR? Here PerchPeek breaks this update down for global mobility professionals, and considers the potential longer term implications.

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What is the 30% ruling?

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• The 30% ruling is a tax advantage for highly skilled migrants working in the Netherlands
• The taxable amount of an employee’s gross salary is reduced from 100% to 70%, meaning 30% of the wage is tax-free
• The employee must meet certain conditions to be eligible, including being recruited from outside the Netherlands, having a certain skill set or expertise that is in short supply in the labour market, and the length of time spent living outside the country beforehand
• It’s long been a massive draw for expats to choose the Netherlands as their new home!

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What’s changing?

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• As of 1st January 2024, the allowance will be capped for the first time
• This means that the 30% ruling may not be applied to employment income that exceeds the “WNT-norm” or “Balkenende-norm” (general remuneration maximum)
• The 2023 WNT-norm is €223,000, meaning a maximum tax-free allowance of €66,900

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This comes some years after a fairly significant change to the scheme in 2019, where the maximum period that expats can use the 30% facility was shortened from eight to five years.

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PerchPeek insights

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This cap on the 30% ruling would not appear to pose an immediate challenge for HR leaders, aside from of course updating the necessary documentation and procedures to ensure that all employees are being taxed correctly! Since this change would only affect the highest earners in an organisation, it’s unlikely to be a big driver of change in HR strategy for many companies.

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However, it’s worth considering whether this change is a sign of further restrictions to come. The 30% ruling has been a huge boon for companies in terms of attracting the best talent from abroad. If this proposition continues to become less appealing, it may have an adverse effect on the number of people keen to make the Netherlands their new home.

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Home-finding: Despite student housing crisis, international student nos. up +7% vs 2022 - impact on relocating employees looking to rent

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As the new academic year starts, the Netherlands has again seen an increase in the number of international students arriving in the country, despite repeated calls to limit numbers in order to assuage the rental crisis. Here are the latest facts and figures for global mobility leaders.

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For the last several years, international students have flooded into Dutch universities, leading to a serious shortage of student housing. In late 2022 MPs called on universities to stop actively recruiting students from abroad, to try to counteract this issue, and to prevent the so-called ‘internationalisation’ of Dutch universities (e.g. offering more and more courses in English).

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However, international student numbers are still on the rise - check out the details below:

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Student facts and figures

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• Between January and July 2023, nearly 18,000 international students applied for a residence permit via the Immigration and Naturalisation Service (IND)
• This represents an increase of 1,200, or +7%, compared to the same period last year 
• Around 98% of these permit applications are approved by the IND, and the majority of these students hold American, Chinese, Indian, Turkish or Indonesian citizenship

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How is this affecting the market for shared accommodation?

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• The shortage of student housing in the Netherlands has now reached over 27,000 units, according to the Telegraaf
• In Amsterdam it now takes an average of three years on the waiting list to be allocated an official student room, a rise of over six months on one year ago
• This is pushing more and more students to search for private accommodation, putting increased pressure on the already insufficient housing stock
• Overall, the price of rooms in shared accommodation via platform Kamernet has increased by +8% this year, with the average room costing €715 per month

PerchPeek insights

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There’s no doubt that the influx of international students to the Netherlands is reshaping the Dutch rental market. To support relocating employees grappling with this tricky market, global mobility professionals must adapt to the changing landscape by:

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• Empowering staff with the knowledge and tools to carry out effective home searches
• Fostering cross-cultural understanding of the nuances of the market
• Ensuring compliance with local regulations to avoid any process issues

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Of course, welcoming international students not only benefits the education sector but also contributes to the broader growth of the Dutch economy. Looking at the bigger picture, those students will be a real asset to the talent pool a few years down the road.

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However, it’s clear that right now this situation is putting more and more pressure on the rental market, and may lead the housing situation to a breaking point in terms of undersupply, and so it’s likely that calls to reduce international student numbers will continue.

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Home-finding: Amsterdam authorities launch new web tools to encourage moving to suburbs - key guidance to share with relocating employees

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Amsterdam has long been grappling with a rental crisis, and with the recent summer influx of students and relocating workers, it’s more difficult than ever to secure a home. The city’s authorities have now stepped in with handy information and a smart mapping tool for alternative areas to live, and it’s ideal intel for HR leaders to share with relocating employees!

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Here’s PerchPeek’s whistle-stop tour of the areas called out as top picks for home-hunters:

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Alkmaar, Bergen, and Hoorn

North of central Amsterdam, Alkmaar is known for its cheese market and well-preserved historic centre. Further north, Bergen offers an artistic haven with a rich cultural scene and fetching landscapes, while Hoorn, also to the north, is a maritime town with a historic harbour.

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Zaanstreek and Waterland

Located north and northeast of the city, Zaanstreek is famous for its iconic windmills and Dutch industrial heritage. In contrast, Waterland is a serene countryside region with charming villages, providing an ideal setting for leisurely bike rides amidst picturesque landscapes.

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Almere and Lelystad

East of central Amsterdam on reclaimed land, Almere is a modern city with innovative architecture, green spaces, and family-friendly amenities. Lelystad is home to the Batavia Stad outlet shopping centre and offers proximity to the Oostvaardersplassen nature reserve.

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IJmond, Zandvoort, and Castricum

West of the city centre, IJmond is an industrial and port area, notably housing Tata Steel. To the southwest, Zandvoort is known for its beautiful beach and Formula 1 track, while Castricum, located further south, is a peaceful coastal town perfect for relaxation and nature enthusiasts.

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Amstelveen and Diemen

Amstelveen is a suburban oasis with excellent schools, expansive parks, and diverse housing options, making it attractive to families and professionals. Diemen, to the southeast, offers cost-effective housing, drawing in young professionals and families seeking affordability.

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Haarlem and Heemstede

Situated to the west of Amsterdam, Haarlem is a charming city with a historic centre, a vibrant cultural scene, and excellent dining options. Nearby Heemstede is an affluent residential area known for its upscale neighbourhoods, well-maintained parks and elegant living environment.

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Haarlemmermeer, Aalsmeer, and Uithoorn

South of central Amsterdam, Haarlemmermeer is home to Schiphol Airport, business parks, and the bustling city of Hoofddorp. Aalsmeer is internationally known for hosting the world's largest flower auction, and Uithoorn offers picturesque river views and a tranquil atmosphere.

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Hilversum, the Gooi, and Vechtstreek

Southeast of the city, Hilversum serves as the media capital of the Netherlands, with lush green spaces. The Gooi is an affluent region with upscale residential areas, lakes, and forests, while Vechtstreek is known for its canals and historic villages, offering a countryside atmosphere.

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To support relocating employees who are searching for a cost-effective rental property in the Amsterdam area, it’s a great idea to share this information with them to help narrow down their choice of neighbourhood, considering commute times, and find the one that’ll suit them best!

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Support your talent: Learning to drive in the Netherlands costs over €3,000, up +24% in two years - helpful info to share with relocating staff

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The cost of obtaining a driving licence in the Netherlands has shot up lately, which is important knowledge for those relocating employees looking to get around on four wheels! Here’s a summary of the latest changes and regulations, plus car sharing tips, for HR leaders to share.

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Driving licence cost change

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• A recent study by the Central Office for Motor Vehicle Testing (CBR) has shown that the cost of learning to drive and obtaining a driving licence in the Netherlands has risen dramatically in the past two years, to an average of €3,060 per learner driver
• This cost has increased by over €600, or more than 24%, since 2021

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When it comes to relocating employees, this information will be most useful to those looking to learn to drive for the first time, or those with teenage children looking to do so. It’s a good idea to share this data, so they can budget accordingly as well as plan for the time to spend in lessons.

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The majority of employees who already hold a drivers’ licence will not need to retake a driving test, and instead will be able to exchange their licence. Below is a refresher of the rules!

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Netherlands driving licence stipulations for new arrivals

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• EU/EEA licence holders - These driving licences are typically recognised in the Netherlands, and can be used without the need to exchange it for a Dutch licence.

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• Non-EU/EEA licence holders - In most cases, these licences can be used for a certain period (usually six months) from the date of registration at the municipal population register (BRP). After this, it will generally be necessary to obtain a Dutch driving licence.

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• Licence exchange - Depending on the holder’s nationality and the country that issued their licence, they may be able to exchange it for a Dutch licence without taking a driving test. The specific rules can vary, so it's essential to check with the Dutch driving authority (RDW - Rijksdienst voor het Wegverkeer) for the most up-to-date information.

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PerchPeek Top Tips - Car sharing

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After all that, it’s also worth noting that owning a car can be super expensive in the Netherlands, especially for those needing to park in major cities! In July 2023, the municipality of Amsterdam raised parking rates by €0.20 - €0.50 per hour, and extended this to apply 24/7. The Hague has also introduced a flat fee of €50 per day to park on certain streets in the city.

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To get around these pesking parking prices, PerchPeek recommends car sharing - a solution that gives pay-as-you-go access to cars without the hassle of ownership - and parking is often free! Popular providers in the Netherlands include Share Now, Greenwheels and MyWheels.

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We hope you enjoyed this month’s update! 

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If you have any feedback, comments or questions about what's happening in your location, feel free to reach out via the form at the bottom of this page.

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Thanks for reading, and see you next month!

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