Where you live in the Netherlands is a major determiner of how much council tax you pay. A new study by the Centre for Research on Local Government Economics (COELO) and the University of Groningen reveals the country’s cheapest and most expensive tax regions.

Why location matters

Municipal governments (gemeenten) in the Netherlands determine a number of taxation requirements. In some cases the amount residents pay for an amenity is simply a reflection of demand: when it comes to garbage disposal and sewage treatment, for example, the gemeente cannot allocate more tax money than the services cost to provide.

But other taxes are decided by local governments themselves, and do not necessarily reflect the direct costs of relevant services.

Wealthy neighbourhoods, higher taxes

Certainly, in the case of home owners, the tax they pay on their homes is - to a large extent - based on how much their homes are worth and, in turn, on their income levels.

Since higher-earning people tend to live in well-to-do communities, where homes are more costly and government subsidies are lower, it is no surprise that affluent communities, like Het Gooi, top the list of most expensive tax regions.

But there are some surprises in the study's list. Houses in Bussum are relatively expensive, but residents pay tax equilvalent to only 0,06 per cent of the property value (WOZ) - much less than in communities like Appingedam and Oldambt, where homes are worth little but are levied at 0,25 per cent of property value.

Explaining discrepancies 

In these cases, municipal policy comes into play as different taxes are balanced against one another. Dog licensing tax, for instance, is set by municipal policy-makers and can vary widely between regions - by a difference of more than one hundred euros per dog in some cases. 

The amount owners must pay may bear no relation to the actual cost of municipal dog-related services. It can, however, affect the tax percentage the municipal government levies on homes.

It all depends on the amount the municipalities receive each year from the national treasury, and whether the municipal budget is flexible or restricted.

Questioning municipal taxes

Such factors have prompted NRCQ to question the "honesty" of regional tax levies, as some populations end up paying disproportionately.

Moving into a low-income area, it warns, may not guarantee a cheaper lifestyle.

A sample of 2015 council tax rates

The following table shows the average amount per household citizens will pay in value-added, garbage disposal and sewage tax in the year 2015 in selected cities.

2015 council tax per household