Netherlands Likely to Tax Investment Gains Every Year From 2028

The Netherlands is preparing a major reform of Box 3, the part of the income tax system that covers most private wealth such as savings, shares, investment funds, second homes, and other assets (minus debts). The plan is to move away from the current method, which taxes an assumed (notional) return, and instead tax the actual return you really made. The target start date is 1 January 2028.

Meaning that instead of the tax office guessing what your investments “probably” earned, the government wants to tax what you actually earned, including price increases of investments from year to year.

This reform is mainly driven by years of legal and political pressure. The current Box 3 system has been heavily criticised because it can tax people as if they earned a decent return even when their real return was low, especially for savers during years of very low interest rates.

Until the new law starts, the Tax Administration says it will still use the notional return approach, but with a “counter-evidence” route: if your actual return is lower, you may be able to show that and pay less.

Many countries only tax certain gains when you sell an asset. The Dutch plan goes further for many assets.

Under the proposed 2028 model, most Box 3 assets would be taxed using a capital growth approach, which means you pay tax each year on the increase in value (even if you did not sell). Banks and wealth advisers explain this as an annual tax on your real return, including yearly value changes.

Example in plain language: if your shares were worth €10,000 on 1 January and €11,000 on 31 December, the €1,000 increase can count as part of your taxable return for that year.

Earlier versions of the proposal included a mixed approach: many assets taxed on yearly value growth, while real estate and certain shares (such as in start-ups) would be taxed more like a capital gains tax, meaning taxation when the gain is realized (for example, at sale), not purely on paper gains.

The NLTimes report also notes that real estate investors could be better off in some ways under the new system because certain costs may become deductible, and tax would be linked more closely to actual profit (with extra rules for personal use of a second home).

The exact design matters a lot here, because taxing property annually based on estimated value changes can be difficult and controversial, especially if owners are not selling and do not have cash available to pay tax.

Several tax and advisory sources say the proposal includes a flat Box 3 tax rate in the new regime and a move toward taxing Box 3 income above a tax-free income threshold (rather than only a tax-free wealth amount). Figures and details can still change during the political process, but the main direction is clear: tax on real returns with new thresholds and reporting rules.

The government’s stated aim is to have the new Box 3 system ready in 2028, but the timeline has already been tight because the reform is complex and requires major changes in how returns are calculated, reported, and checked.

Tax specialists have warned for years that the system is hard to design and hard to administer. The Council of State previously criticized parts of the plan as overly complex, and advisers note that delivering a workable model depends on parliament approving the legislation on time and the tax authority being able to implement it.

For many households, the biggest difference will be fairness and volatility.

If your savings account earns little, taxing “actual return” should reduce the feeling of being taxed on money you did not make. But for people with shares and investments, an annual system can mean more tax in years when markets rise, and potentially less in years when markets fall, depending on how losses are treated.

For second-home owners and property investors, the impact could vary widely. The new model may allow deducting certain expenses, but it could also introduce new taxes tied to personal use, and the rules for when gains are taxed (yearly versus at sale) will matter a lot.

The key next steps are political: the bill must move through parliament, and details can still shift. The big questions are how “actual return” will be defined for different asset types, whether annual value changes will be taxed broadly, and how the system will handle losses, illiquid assets, and administrative burden for taxpayers and the Tax Administration.