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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

#91

Post by maxldn »

appreciatorBus wrote: post #68
icegreentea2 wrote: post #40

Earlier quoted context omitted.

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…

I totally get that it’s an understandable political strategy. I just think it’s in defensible as anything but a political strategy, and that it will ultimately make life worse for more people versus simply treating assets as assets, including homes. If homeowners do not wish their homes to be treated as assets, then they could simply forgo the right to profits, but I suspect they will not do that.

While I don’t disagree, I think it’s worth noting that the Netherlands has a pretty good level of social housing. Not perfect, but I think it’s 26% based on the stats link in the parent. Also rent controls. Although these also tend to reward people who have been in the system longer (which _might_ be by design, but that’s just like my opinion)

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

#92

Post by lateforwork »

krageon wrote: post #88
lateforwork wrote: post #70

Earlier quoted context omitted.

Yes, the tax can be thought of an extra expense ratio. Same impact on you, at the end of the day.

It can be thought of the same way, but not from the perspective that's under discussion. As such it doesn't really add anything except a new perspective. Why are you introducing it, what does it add?

You don't have to worry about tax implications when timing stock sale.

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

#93

Post by lape »

ivankra wrote: post #29
tschellenbach wrote: post #6

The title here mostly doesn't match the article right? Quote: "But unlike the capital growth tax, capital gains tax will, in principle, only be levied at the time of realisation. This is usually when the relevant asset is sold, but also when immovable property exits Box 3 for another reason, such as emigration."

Looks like they're coining a new legal term "Capital Growth Tax", under which they are going to tax unrealized capital gains. I'm not aware of any other country that taxes them like that (besides wealth/exit taxes), so maybe they're the world's first here! Some countries have wealth taxes - but they are usually flat or scale with wealth, not the yearly increase in wealth. Note that currently NL does de facto have a w…

Germany is also already taxing unrealized capital gains of funds (Vorabpauschale).

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

#94

Post by burnt-resistor »

abtinf wrote: post #50

It is difficult to imagine a more catastrophically destructive economic policy. If this is actually implemented, the Dutch are toast.

"A number of my friends who belong in the very high upper brackets have suggested to me on several occasions of late, that if I am reelected president, they will have to move to some other Nation because of high taxes here. Now, I will miss them very much." (audience breaks into laughter)

- FDR

(Spoiler alert: The rich always act like victims and whine about having to move.)

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

#95

Post by analognoise »

ivankra wrote: post #63
mbesto wrote: post #47

Earlier quoted context omitted.

> I'm not aware of any other country that taxes them like that (besides wealth/exit taxes), so maybe they're the world's first here! Real estate taxes. > not the yearly increase in wealth. Real estate taxes.

For real estate, yes, but it's a quite different type of asset with a stable value that (mostly) only goes up. What about stocks or crypto (the assets this new law targets)? They can have wild value fluctuations in a year. If your crypto or startup's options have +1M paper gain this year and turn worthless the next year, is it fair to ask people to cough up some 300-500k of real cash in tax?

Yes, and we absolutely should.

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

#96

Post by hnburnsy »

mbesto wrote: post #47
ivankra wrote: post #29

Earlier quoted context omitted.

Looks like they're coining a new legal term "Capital Growth Tax", under which they are going to tax unrealized capital gains. I'm not aware of any other country that taxes them like that (besides wealth/exit taxes), so maybe they're the world's first here! Some countries have wealth taxes - but they are usually flat or scale with wealth, not the yearly increase in wealth. Note that currently NL does de facto have a w…

> I'm not aware of any other country that taxes them like that (besides wealth/exit taxes), so maybe they're the world's first here! Real estate taxes. > not the yearly increase in wealth. Real estate taxes.

Not really, property taxes in the U.S. are revenue-driven (sometimes called “budget-driven”), not rate-driven. The taxing authority adds up how much money it needs, then apportions it based on property values.

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

#97

Post by Volundr »

lateforwork wrote: post #70
dwightgunning wrote: post #65

Earlier quoted context omitted.

That's not a tax, that's the expense ratio, which is basically describing fees captured by the fund manager. Funds accessible to Dutch investors involve similar ERs. It's not an alternative.

Yes, the tax can be thought of an extra expense ratio. Same impact on you, at the end of the day.

Calling the expense ratio a tax is like calling the labor cost of your car repair a tax. The expense ratio is what the fund manager is charging to cover their labor and expenses. It's not a tax on the transaction going to the government.

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

#98

Post by lordofgibbons »

bpodgursky wrote: post #55
nimih wrote: post #49

Earlier quoted context omitted.

I think in that case, you, the hypothetical wage worker, got hoodwinked pretty effectively by the beancounters when they were able to get away with compensating you in contracts that are apparently worthless to you.

Do you think about the things you say, or is it just reflex? Everyone working for a startup knows it may be 5 years to a liquidity event. We're all big boys, we work on uncertainty and expectation. If the government changes the rules halfway through, it's pretty brain-damaged to blame the beancounters for hoodwinking the employees, and not using their magic oracular powers to predict how the laws would change under t…

5 years used to be true 15 years ago. IPOs are happening much later now, probably 10+ years, if you're lucky

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

#99

Post by igor_akhmetov »

ivankra wrote: post #76
askmike wrote: post #31

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 rea…

It is essentially a wealth tax system. But I wouldn't call it low: currently, 6.17% fictional yield x 32% tax rate = 2% wealth tax rate - it is at the high end among countries with a wealth tax ( https://en.wikipedia.org/wiki/Wealth_tax )

The current rate is 36%.

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

#100

Post by igor_akhmetov »

archagon wrote: post #80
abtinf wrote: post #50

It is difficult to imagine a more catastrophically destructive economic policy. If this is actually implemented, the Dutch are toast.

The Netherlands has had a form of "Box 3" wealth/unrealized capital gains tax for years. (This is just an update to existing policy.) So far, the country has not imploded. Time to update your priors.

That's one of the reasons the housing market is so inflated. The goverment forces people to invest into housing.
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