Tax regulations are changing in 2025, and private individuals have plenty to look forward to, including increased deductions and simplified processes. Here are the top five updates that will affect you and your family.

1. Increased basic allowance

The basic income tax allowance will increase to €12,084 in 2025 (up from €11,784 in 2024). This increase ensures more of your income is tax-free, benefiting lower—and middle-income households.

2. Higher childcare deduction

Parents will benefit from increased deductions for childcare costs. Starting in 2025:

• Deductible Portion: 80% (up from 67%).

• Annual Cap: €4,800 per child (up from €4,000).

🧾 Keep receipts for daycare, kindergartens, and childminders to maximize your deductions.

3. Enhanced child tax allowance

In 2025, the child tax allowance will increase to €3,336 for single parents and €6,672 for married couples, providing additional financial relief for families.

🧮 Use Norman’s tax calculator to evaluate whether the child allowance or child benefit (Kindergeld) is more beneficial for your family.

4. Increased tax-free healthcare bonuses

Healthcare bonuses from your insurance provider are now tax-free up to €150 per year (previously €75). This means receiving incentives for fitness programs or preventative healthcare won’t reduce your deductible expenses.

5. Simplified taxation for photovoltaic systems

Tax benefits for solar panel installations will improve in 2025. The tax-free limit for photovoltaic systems is now standardized at 30 kilowatt-peak (kWp) per residential or commercial unit, regardless of whether it’s a single-family or multi-family property. This replaces the previous 15 kWp cap for multi-family units.

Summary

2025 offers valuable updates to ease your tax burden, from increased allowances to simplified solar panel taxation and childcare deductions. These changes reduce stress and put more money in your pocket. Norman can help you navigate these updates effortlessly, maximizing your savings.