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The Netherlands' Box 3 2028 reform, explained

If you save or invest in the Netherlands, the way that wealth is taxed is in the middle of its biggest change in decades. The system known as Box 3 is moving away from taxing a deemed return on your assets and toward taxing your actual return, a shift currently planned for 2028. This guide explains, factually, what Box 3 is, why it is being reformed, and what the new design does. The opinion about whether the reform is a good idea, and what it means specifically for renting vs buying, lives on a separate page, linked at the end.

What Box 3 is

Dutch income tax is split into three "boxes." Box 1 covers income from work and from your owner-occupied home. Box 2 covers substantial business shareholdings. Box 3 covers income from savings and investments: bank balances, shares, bonds, second properties, and the like (Rijksoverheid, box 3).

The distinctive thing about Box 3 is that, historically, it has not taxed the income you actually received. Instead it taxed a deemed (forfaitaire) return: the law assumed your wealth earned a certain percentage, and you paid a flat tax rate on that assumed amount, regardless of whether your portfolio actually went up, went down, or sat in cash. Wealth above a tax-free allowance (doubled for fiscal partners) was taxed this way every year.

That design was simple to administer. It was also the source of the problem.

Why it is being reformed

The deemed-return approach increasingly diverged from reality. In years when actual returns, especially on cash savings, were far below the deemed return, taxpayers were paying tax on income they never earned. This was challenged in court, and the Dutch Supreme Court (Hoge Raad) ultimately ruled that taxing a fictional return that exceeds a taxpayer's real return is not permissible where the two diverge (Hoge Raad, 6 June 2024 and the December 2024 follow-up). That string of rulings forced the government into a series of stopgap "bridging" rules and, ultimately, a commitment to replace the system entirely.

The replacement principle is straightforward to state: tax actual returns rather than assumed ones. The difficult part is the detail, and the detail is where the reform becomes consequential.

What the new system does

The planned 2028 system taxes the actual return on your assets in a given year rather than a deemed percentage. Its defining features (Rijksoverheid, plannen werkelijk rendement box 3):

  • "Return" is split into a direct part (interest, dividends, rent, net of costs) and an indirect part (the change in market value of your assets over the year).
  • For most assets the indirect part is taxed on an accrual basis (a vermogensaanwasbelasting), meaning the increase in value is taxed as it accrues each year, even if you have not sold. Certain assets such as real estate are handled on a realisation basis instead.
  • Losses are accounted for, with rules to carry them forward.

That accrual feature, taxing unrealised gains each year, is what most distinguishes the Dutch design from a conventional capital-gains tax. In most countries you are taxed on a gain only when you realise it by selling. Under an accrual tax, the appreciation is taxed as it accrues, year by year, even if you never sell and never see the cash.

Why "deemed return" vs "actual return" vs "realised gain" all differ

It helps to line up three distinct ways wealth can be taxed, because the reform sits between them:

  • Deemed return (the old Box 3): tax a fictional return on your wealth, ignoring what you actually earned.
  • Accrual on actual return (the 2028 plan): tax your real return each year, including paper gains you have not cashed out.
  • Realised capital gains (most other countries): tax the gain once, when you sell.

These are genuinely different in their timing and their cash-flow impact. An accrual tax pulls tax forward in time relative to a realisation tax, because you pay on gains before you have sold the asset that produced them. Over a long holding period, paying tax earlier and repeatedly, rather than once at the end, meaningfully reduces the after-tax compounding of a portfolio.

Who is affected

The reform touches anyone with Box 3 wealth above the tax-free allowance: long-term investors building a portfolio, savers, and holders of second properties and other assets. Because the new tax reaches unrealised appreciation, it falls hardest, in relative terms, on assets that appreciate substantially and are held for a long time without being sold, the classic profile of a buy-and-hold investor.

One asset is conspicuously outside Box 3: your owner-occupied home, which is taxed in Box 1 through the Eigenwoningforfait, with mortgage interest deductible via Hypotheekrenteaftrek (Belastingdienst, eigen woning). That difference in treatment, investments in Box 3 and your home in Box 1, is precisely why the reform matters for the rent-vs-buy decision.

Timing and uncertainty

The reform has been a moving target. Start dates have shifted as the legislation and its implementation have been worked through, and the current plan points to 2028 (Rijksoverheid timeline). As with any tax measure still passing through the legislative process, the precise rates, thresholds, valuation rules, and even the start date can change before it takes effect. Treat any projection that assumes the 2028 design as scenario analysis, not a forecast.

Why this changes renting vs buying

Because the owner-occupied home escapes Box 3 while a renter's investment portfolio does not, the way Box 3 taxes that portfolio directly affects how renting compares to buying. A renter who invests instead of buying carries the Box 3 drag every year; moving to an accrual tax on actual returns, including unrealised gains, changes the size of that drag over a long horizon.

How large the effect is depends on the portfolio size and the time horizon, and it can cut in unexpected directions for small portfolios over short horizons. Rather than assert a conclusion here, the Netherlands calculator lets you switch between three regimes via the Box 3 regime selector, holding everything else fixed, so you can see the difference for your own numbers:

  • 2025 deemed yield: the transitional system in force today, taxing a fictional return on wealth above the allowance.
  • 2028 actual return: the proposed accrual tax on real returns, including unrealised gains.
  • Realised CGT: a conventional capital-gains tax, levied once on sale. This is a counterfactual yardstick for comparison only: the Netherlands has no general capital-gains tax on private investments today, and one is not on the table. It is included so you can see how the Dutch regimes compare to an ordinary one.

For the rent-vs-buy analysis in detail, and for this site's clearly-labelled opinion on the reform, along with links to the campaigns organising around it, see the dedicated Box 3 and the 2028 reform page. For the exact mechanics the calculator implements, see the methodology.

Sources

The 2028 design is still subject to legislative change; treat projections as scenario analysis, not a forecast.

Educational content, not financial or tax advice. Tax parameters reflect rules current at the time of writing and change frequently, so verify against official sources before acting. See the methodology for how the calculator implements these rules.