Garden plant sales could fall 14.3% if VAT rises

Moving ornamental plants and trees to the general VAT rate would raise prices by 11% if shops pass the full increase on, and demand for garden plants and trees would then fall by 14.3%. That is the estimate in research cited by State Secretary Eerenberg (Finance) in answers to parliamentary questions, received on 6 November 2026.

The research was done in 2026 by the firm Decisio for the Dutch ornamental horticulture sector (sierteelt). The 14.3% drop follows from a price elasticity of -1.3 for garden plants and trees, based on GfK consumer research.

Municipalities and provinces will not pay more, Eerenberg said. They can reclaim VAT on public green spaces through the BTW-compensatiefonds, the VAT compensation fund, so the change does not raise their VAT burden.

The cabinet cannot quantify what the increase would do to the greening of private gardens. It points to earlier Motivaction research for the infrastructure ministry (IenW), which found that greening is mostly driven by intrinsic motivation and that price weighs less. The main reasons people gave for not greening were a garden that is too small, no green fingers or a lack of time, and price far less so.

"This government thinks greening is important," Eerenberg wrote, but there are several ways to encourage it. A 2023 evaluation of reduced VAT rates by Dialogic found that a general VAT cut is not an efficient tool for specific policy goals such as greening.

The cabinet also points to local help: 60 municipalities now have a tile removal service (Tegeltaxi), and many municipalities, provinces and water boards offer subsidies for greening measures.