Amsterdam Considers Another Tourist Tax Hike

The potential tax adjustment is part of a broader "Tourism in Balance" ordinance, a policy framework grappling with tourist volumes that reached nearly 24 million last year, exceeding the city's established cap of 20 million annual overnight stays. This policy was initiated after a citizen's initiative garnered 30,000 signatures, demanding more stringent control over the tourism industry. The city is legally obligated to act when projections surpass 18 million overnight stays. Awaiting the impact of a national VAT increase on hotel stays from 9% to 21%, which brings the total tax burden to approximately 33.5%, the city will consider a further local tax hike in 2027 if tourist numbers do not sufficiently decrease. The current municipal tourist tax stands at 12.5% of the accommodation cost. A citizen initiative has proposed a more aggressive increase to 32% over four years, estimating it could generate 900 million euros. Revenue from an increased tourist tax is earmarked for a municipal real estate fund, a proposal championed by Alderman for Economic Affairs, Sofyan Mbarki. This fund is designed to acquire and repurpose properties in the city center, particularly on streets like Warmoesstraat and Oudezijds Voorburgwal, converting them from tourist-focused businesses to residential housing or spaces for local businesses. This strategy directly intersects with Amsterdam's significant housing shortage. The city's housing policy has been under pressure, with a nationwide deficit of 350,000 homes and a notable decrease in available rental properties in the capital. The tax-funded property acquisition is one of several measures aimed at reclaiming housing stock from the tourism sector. The conversion of acquired properties also aligns with Amsterdam's ambition to be a fully circular city by 2050. The "Amsterdam Circular 2020-2025" strategy emphasizes circular construction principles for renovations and maintenance. This includes the use of sustainable and bio-based materials, with a target for 50% of all building refurbishment to follow circular principles by 2025. The city's approach is multi-faceted, extending beyond taxation. Other measures within the "Tourism in Balance" framework include a ban on new hotel construction unless another hotel closes, a reduction in the number of river cruises, and stricter limits on holiday rentals. For instance, as of April 2026, private holiday rentals in central districts will be capped at 15 nights per year. Despite these efforts, the 20 million overnight stay cap has been a point of contention. The municipal government has argued in court that this figure is an "administrative target" rather than a legally binding limit, a stance challenged by citizen groups who have initiated legal action to enforce it. The debate over the tourist tax highlights a core tension in Amsterdam's spatial economics: balancing the significant economic contributions of tourism with the urgent need for affordable housing and improved livability for its residents. The proposed policy attempts a systemic intervention by directly linking tourism revenue to the creation of residential space in the urban core.