The Hillen Amendment (Wet Hillen) and Its Phase-Out

Key Takeaways

The Hillen amendment (Wet Hillen) ensures that homeowners whose mortgage interest is less than their eigenwoningforfait do not face a net tax charge on their own home.
It applies primarily to mortgage-free homeowners or those with very small remaining mortgages.
The amendment is being phased out over 30 years (2019–2048) — each year, a smaller percentage of the correction applies.
In 2026, approximately 76.7% of the Hillen correction still applies. By 2048, it will be 0%.
When fully phased out, mortgage-free homeowners will pay income tax on the eigenwoningforfait as a net addition to their Box 1 income.

What Is the Hillen Amendment?

Wet Hillen

The Problem It Solves

Without the Hillen amendment, a homeowner who has fully paid off their mortgage faces this situation:

Eigenwoningforfait: +€1,750 (added to Box 1 income)
Mortgage interest deduction: €0 (no mortgage)
Net eigen woning income: +€1,750
Tax at 37.56%: approximately €657 per year

The Hillen amendment was introduced to ensure that owning your home outright does not result in a net tax charge. It provides an additional deduction equal to the positive balance, bringing the net eigen woning income to zero.

How It Works

Step 1: Calculate eigenwoningforfait          → +€1,750
Step 2: Subtract mortgage interest            → −€0
Step 3: Net eigen woning income               → +€1,750
Step 4: Hillen correction (aftrek geen/geringe eigenwoningschuld) → −€1,750 × correction %
Step 5: Taxable eigen woning income           → reduced or zero

The Phase-Out

In 2019, the government began phasing out the Hillen amendment over 30 years. Each year, the correction is reduced by 1/30th of its original value.

Phase-Out Schedule

Year	Correction Percentage	Lost (Cumulative)
2018	100% (no phase-out yet)	0%
2019	96.67%	3.33%
2020	93.33%	6.67%
2021	90.00%	10.00%
2022	86.67%	13.33%
2023	83.33%	16.67%
2024	80.00%	20.00%
2025	76.67%	23.33%
2026	73.33%	26.67%
2030	60.00%	40.00%
2035	43.33%	56.67%
2040	26.67%	73.33%
2045	10.00%	90.00%
2048	0%	100%

Good to know

The phase-out is gradual — approximately 3.33 percentage points per year. In 2026, you still receive 73.33% of the Hillen correction. The full impact will not be felt for another two decades.

Impact in Practice

Example: Mortgage-Free Homeowner in 2026

WOZ value: €500,000
Eigenwoningforfait (0.35%): €1,750
Mortgage interest: €0
Net eigen woning income before Hillen: +€1,750
Hillen correction (73.33%): −€1,283
Taxable eigen woning income: €467
Tax at 37.56%: approximately €175

Compare this to:

2018 (full Hillen): tax = €0
2030 (60% Hillen): tax on €700 → €263
2048 (no Hillen): tax on €1,750 → €657

Example: Small Remaining Mortgage

If your mortgage interest is less than your eigenwoningforfait, the Hillen correction applies to the difference:

Eigenwoningforfait: €1,750
Mortgage interest: €500
Net positive balance: €1,250
Hillen correction (73.33%): −€917
Taxable: €1,250 − €917 = €333
Tax at 37.56%: approximately €125

Who Is Affected?

The phase-out primarily affects:

Older homeowners who have paid off their mortgage — often retirees who bought their homes decades ago
Homeowners who made extra repayments to become mortgage-free
Wealthy homeowners who bought with cash
Inheritors who received a property without a mortgage

Number of Affected Homeowners

Approximately 1.2 million homeowners in the Netherlands have no or very little mortgage debt. These households will see a gradual increase in their tax bill over the next 22 years.

The impact is modest per household per year (tens to hundreds of euros), but it adds up over time and is particularly felt by retirees on fixed pensions.

Why Is It Being Phased Out?

The government's rationale:

Equity: Homeowners without mortgages benefit from their home's value (imputed rent) without paying tax on it, while renters must pay rent from after-tax income. The Hillen amendment deepened this inequality.
Budget: The Hillen correction costs the government approximately €1.3 billion per year in forgone tax revenue.
Simplification: The long-term goal is to simplify the eigen woning system. Removing the Hillen correction is one step.

Warning

The phase-out has been controversial. Critics argue it penalizes financial responsibility — people who worked to pay off their mortgage are now taxed for their prudence. Supporters argue it restores fairness between homeowners and renters. The political debate continues, and future governments could accelerate, slow, or reverse the phase-out.

Planning Considerations

Should You Pay Off Your Mortgage Faster?

The Hillen phase-out makes mortgage-free homeownership slightly less attractive from a pure tax perspective. However:

The tax cost is still relatively small (a few hundred euros per year in 2026, growing slowly)
No mortgage means no interest costs at all — the savings on interest payments far outweigh the Hillen-related tax increase
Peace of mind — many people value the security of owning their home outright

The Hillen phase-out should not be the primary reason to keep or not keep a mortgage. Interest rates, personal risk tolerance, and alternative investment returns are far more important factors.

Tax-Optimal Mortgage Level

In theory, the optimal strategy might be to maintain a small mortgage where the interest exactly equals the eigenwoningforfait — resulting in zero net eigen woning income without needing the Hillen correction. But in practice, this creates unnecessary complexity and ongoing interest costs.

Common Mistakes

Not knowing about the Hillen correction — Mortgage-free homeowners sometimes do not report the eigenwoningforfait at all, or do not claim the Hillen correction they are entitled to.
Overreacting to the phase-out — The tax increase is gradual and small. Taking on or keeping a mortgage purely to avoid the Hillen phase-out is rarely financially rational.
Not adjusting provisional assessments — If you pay off your mortgage mid-year, your provisional refund (voorlopige teruggaaf) should be adjusted to avoid an unexpected tax bill.
Forgetting the correction exists — The pre-filled tax return (vooringevulde aangifte) usually includes the Hillen correction automatically, but verify it is there.