Everything is getting more expensive: New fees and taxes from July 2025!

Everything is getting more expensive: New fees and taxes from July 2025!

Finance Minister Markus Marterbauer (SPÖ) presented the double budget for 2025/26, which will bring comprehensive changes for the population from July. The budget summarizes numerous measures to consolidate the state budget, which are intended to generate additional income in the coming years. The government plans to generate a total of 760 million euros by 2029, while only 20 million euros are planned for relief. The details of the key savings and tax adjustments were already announced in the first package of measures, which was passed in March. These include the cancellation of educational leave, the increase in tobacco tax and the end of the sales tax exemption for solar systems.

On May 22nd, the National Council will vote on another legislative package that, among other things, provides for higher fees for official documents and increasing health insurance contributions for pensioners. In particular, the fees for official processes will be adjusted to inflation by 48.2 percent. For example, a passport will now cost 112 euros instead of 75.90 euros, while a driving license will increase from 60.50 euros to 90 euros. This fee increase will take effect on July 1, 2025. The Ministry of Finance expects additional income of 65 million euros for 2025, which is expected to rise to 150 million euros in the following years.

Health contributions and insurance are increasing

In addition to the changes in the state budget, there are also adjustments to health insurance contributions. The contribution for pensioners is scheduled to rise from 5.1 to 6 percent on June 1, 2025. Another important point are the changes in statutory health insurance (GKV), where the average additional contribution increases to 2.5 percentage points. This corresponds to an increase of 0.8 percentage points compared to 2024. Nursing care insurance is also affected, whose contribution rate will be increased to 3.6 percent on January 1, 2025.

The new framework also includes adjustments for students, who now have to pay a monthly contribution of 87.38 euros including additional contributions for individual health insurance companies. The income limit for non-contributory co-insurance in family insurance will also be increased. In the future it will be 535 euros per month, which could increase the financial burden for many households. A limit for additional payments is set at 2 percent of annual gross income, while 1 percent applies to chronically ill people.

Financial policy framework and challenges

The 2025 federal budget was agreed in July 2024 after intensive discussions within the traffic light coalition. A central point is the targeted “global underspending” of 17 billion euros, the reduction of which could result in further cuts. The ideas for cost savings come primarily from the Chancellery. Specifically, it is about converting grants to Deutsche Bahn and the Autobahn company into loans, but this is controversial. Legal opinions have already expressed concerns that such a conversion could be unconstitutional.

The debate about reforming the debt brake, which has only allowed structural debt of 0.35 percent of GDP since it was enshrined in the Basic Law in 2011, continues to be a hotly debated topic. Political decision-makers are faced with major challenges, particularly in light of a ruling by the Federal Constitutional Court in November 2023, which declared the granting of loans from a special fund unconstitutional for the time being. In particular, compliance with budgetary principles and the need to ensure financial stability remain an urgent task for the future.

The assessment of the Stability Council, which advises the federal levels on the preparation of budget and financial plans, is also particularly important. The need to take the new financial framework into account and keep an eye on the demands for reform will shape the political discussions.

Overall, the upcoming changes show that both citizens and relevant institutions must prepare for profound financial adjustments that will affect many aspects of everyday life.