In the Netherlands, capital gains and actual rental income on a property are currently not taxed. Instead, the Dutch tax authority assumes a fixed yield of up to 6.04% on your total asset value as per January the first, regardless of the actual return on your assets. However, this system is set to change soon, as the government soon plans to transition Box 3 into a system in which the actual return is taxed, including capital gains.

What will the new system look like?

Under the new box 3 system, which is expected to be introduced in 2026, unearned income such as interest, dividends, and rental income will be taxed annually. Additionally, tax will be levied on changes in the value of assets, including capital gains or losses on shares and appreciation or depreciation of property values.

What is the difference to the current system?

Currently the Tax Office assumes a fixed fictitious percentage of your wealth to be unearned income. A distinction is made between three different categories; these are bank accounts, debts, and other assets. For 2024 the fictitious yield is 1.03% for bank accounts, 6.04% for other assets, and 2.47% for debts. On this yield, 36% tax is due.

This system can be advantageous if you have assets with a high return (higher than the fictitious return) as you only pay tax on the lower fictitious return. However, if your assets have a lower return, the tax can be disproportionately substantial. In the new system this will no longer be the case, and you will be taxed on your actual income and capital gains.

What about the tax-free threshold?

It is expected that instead of a tax-free wealth threshold in Box 3, there will be a tax-free income threshold instead. Income from assets that exceed this exemption will be subject to taxation.If you would like to inquire about the latest box 3 developments and how your assets and unearned income are taxed, please contact us and we will be glad to advise you!

Suurmond Tax consultants

Untaxing taxes!