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Netherlands – Capital Growth Tax and Capital Gains Tax for Box 3

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Re: Netherlands – Capital Growth Tax and Capital Gains Tax for Box 3

#31

Post by askmike »

To summarize the current Dutch personal income system: besides income from salary and income from own business (these are taxed quite high), income from investments (stocks, passive investments, real estate excluding your first home) is taxed quite low. The amount is simply a percentage based on the value (as per the start of the year) of your investments.

So in the Dutch tax system there is no difference between realized and unrealized gain. As such it doesn't matter when you buy/sell your investments. It doesn't impact your tax burden. The effect you get is that everyone's wealth just slowly erodes away, just like with inflation (unless your yield outpaces that).

But with this new law that all might change.

Re: Netherlands – Capital Growth Tax and Capital Gains Tax for Box 3

#32

Post by pembrook »

Sometimes we have to place our hand on the stove to learn why we shouldn’t place our hand on the stove.

There’s a bizarre silliness to implementing this compared the relative ease of just increasing capital gains taxes (accrued capital gains are already tracked and reported!) to match income. Will just be a massive jobs program for the bean counters and consultants.

As someone living somewhat Netherlands adjacent, I will happily welcome all Dutch entrepreneurs and investors who wish to grow our local economy instead and not be forced to sell chunks of their company to the state over time.

Re: Netherlands – Capital Growth Tax and Capital Gains Tax for Box 3

#33

Post by temp2441139 »

lordofgibbons wrote: post #18

How are situations like lack of liquidity to pay the taxes handled? i.e, As an employee you get stock options, which you exercise when you leave the startup. Then long before the company has a liquidity event the FMV shoots up because the business is doing well. How do you as a wage worker pay the taxes on your paper riches without a way to sell your shares?

I guess there would be all sorts of megacorps happy to loan you money for this with your assets as collateral.

Remember London and Amsterdam have extremely strong finance industry lobbying, and that shows up in their lawmaking.

Re: Netherlands – Capital Growth Tax and Capital Gains Tax for Box 3

#34

Post by monero-xmr »

lordofgibbons wrote: post #18

How are situations like lack of liquidity to pay the taxes handled? i.e, As an employee you get stock options, which you exercise when you leave the startup. Then long before the company has a liquidity event the FMV shoots up because the business is doing well. How do you as a wage worker pay the taxes on your paper riches without a way to sell your shares?

You need to exit the Netherlands

Re: Netherlands – Capital Growth Tax and Capital Gains Tax for Box 3

#35

Post by tempestn »

appreciatorBus wrote: post #23
kingstnap wrote: post #12

Earlier quoted context omitted.

As I understand it most things like stocks with be under the capital growth scheme, taxed yearly, but they left a carve out for real-estate where it only is levied at sale/realization time.

Classic loophole. We tell ourselves this is to protect the little people who own homes, but the actual little people don’t have homes at all and rent. Meanwhile, anyone with money will get the picture invest all of it in real estate, once again enriching homeowner as well impoverishing the rest of us.

In a way I agree with you that this will cause market distortion in the form of greater demand for real estate over eg. equities. But there are plenty of such tax distortions; for example many countries have favourable tax treatment for domestic dividends.

Regardless, I assume the logic behind this exception is that while you can easily sell a portion of your holdings of publicly traded stocks to cover your annual tax burden, you can't sell a portion of a house. You could of course finance, but that's going to disproportionately benefit lenders.

Re: Netherlands – Capital Growth Tax and Capital Gains Tax for Box 3

#36

Post by SilverElfin »

So can you get unrealized capital losses to turn into tax credits? And can a person build up these credits to use in different years? If not, this is just a big tax increase to support continued government inefficiency instead of fixing spending and efficiency problems.

Re: Netherlands – Capital Growth Tax and Capital Gains Tax for Box 3

#37

Post by temp2441139 »

jmyeet wrote: post #11

Good. IMHO unrealized gains and profit shifting are two of the biggest problems in modern taxation that need to be addressed. Many people will have heard about the Buy Borrow Die strategy by now. In case not, it's basically where you don't sell an asset (and thus have to pay taxes on the gain). You use it as collateral for a loan and just spend the laon while the asset continues to appreciate (hopefully) faster than…

> This is a massive tax break for the wealthy.

Do you have a reference for this?

Any sort of gift or inheritance transfers the cost basis as far as I know.

Re: Netherlands – Capital Growth Tax and Capital Gains Tax for Box 3

#38

Post by yunohn »

andsoitis wrote: post #10

Usually wealth taxes like this only applies to people with (net) assets in excess of a fairly large amount like 50m or 100m, etc. Skimming the article I couldn’t tell whether that’s the case here. If not, it seems like it would have pretty bad implications for the average person who isn’t super wealthy but who are trying to build wealth.

Sadly the threshold for wealth tax in the Netherlands has always been abysmally low - even in 2025, the untaxed “wealth” is only 50k.

Re: Netherlands – Capital Growth Tax and Capital Gains Tax for Box 3

#39

Post by stunami »

tom_ wrote: post #26
kingstnap wrote: post #9

> The capital growth tax will apply to most assets, taxing both realised and unrealised returns, including appreciation in value and income from assets like shares, cryptocurrencies, and savings. Exchange results on bank balances in currencies other than EUR will also be taxed. Ouch. I suppose this is supposed to combat the trend of share buybacks over dividends. Gonna seriously suck to be anyone Norwegian and having…

This won’t obviously apply to Norwegians, as it’s for the Netherlands.

Ah ha, but it would for expat Norwegians living in the Netherlands ! If we're not worried about the minority Norwegian expat groups, what has the world come to.

Re: Netherlands – Capital Growth Tax and Capital Gains Tax for Box 3

#40

Post by icegreentea2 »

appreciatorBus wrote: post #23
kingstnap wrote: post #12

Earlier quoted context omitted.

As I understand it most things like stocks with be under the capital growth scheme, taxed yearly, but they left a carve out for real-estate where it only is levied at sale/realization time.

Classic loophole. We tell ourselves this is to protect the little people who own homes, but the actual little people don’t have homes at all and rent. Meanwhile, anyone with money will get the picture invest all of it in real estate, once again enriching homeowner as well impoverishing the rest of us.

It's true that it's a carve out, and current young generations are having huge problems getting homes in a lot of the world.

But in the Netherlands, the overall home ownership rate is still about 70 percent (https://ec.europa.eu/eurostat/databrowser/view/ilc_lvho02__c... might need to drill down a little).

In the US it's 65 percent.

Carve outs for home owners are some of the most understandable political strategies across the developed world.

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