The Netherlands will begin taxing unrealized gains on savings and investment assets at a flat 36 % rate from 1 January 2028. The change applies to Dutch tax residents and will affect portfolios that increase in value even when no assets are sold.
Why the law changed
- The previous Dutch system taxed investment income on a “fictional” rate of return, regardless of actual earnings.
- In December 2021 the Dutch Supreme Court ruled that this approach violated property rights under the European Convention on Human Rights because it taxed income that had never been received.
- The ruling eliminated a source of revenue estimated at €2.3 billion per year, prompting lawmakers to devise a quick replacement: a tax on unrealized gains.
How the new system is structured
The Dutch personal‑income tax is divided into three “boxes”:
| Box | What it covers |
|---|---|
| 1 | Employment income |
| 2 | Income from owning ≥ 5 % of a company |
| 3 | Savings and investments (the box that was overhauled) |
Box 3 now taxes actual returns – which include both realized and unrealized gains – at a flat 36 % rate.
Example
- 1 January 2028: portfolio value = €110 000.
- 31 December 2028: portfolio value = €120 000.
- Unrealized gain = €10 000.
- Taxable amount = €10 000 – €1 800 (annual exemption) = €8 200.
- Tax due = 36 % × €8 200 ≈ €2 952.
Exemptions and loss carry‑forward
- Annual exemption: the first €1 800 of returns each year is tax‑free.
- Losses: losses exceeding €500 can be carried forward indefinitely and offset future gains.
Which assets are affected
- Taxed under the mark‑to‑market rule: stocks, bonds, mutual funds, ETFs, and cryptocurrencies. The tax authority assesses the portfolio value each year and taxes any change.
- Exempt from annual mark‑to‑market: real estate and shares in qualifying startups. These assets are taxed only when they are sold (traditional capital‑gains treatment).
The exemption for real estate is intended to avoid liquidity problems, but the same consideration was not extended to stocks or crypto.
Liquidity risk
Because the tax is payable each year regardless of cash flow, investors may need to:
- Sell part of the asset to raise cash, potentially triggering additional tax on the sale, or
- Use other income sources to cover the bill.
The burden is especially acute for investors heavily weighted in illiquid assets such as cryptocurrency or a single stock.
How the Dutch approach compares in Europe
| Country | Capital‑gains tax timing | Typical rate on investment income |
|---|---|---|
| Netherlands | Taxed annually on unrealized gains (Box 3) | 36 % (flat) |
| Norway | Taxed on realization | – |
| Germany | 25 % withholding tax on realized gains | – |
| France, Austria, Denmark | Taxed on realization | – |
| Bulgaria | Flat 10 % on income | – |
| Romania | Flat 10 % on income | – |
| Hungary | Top rate 15 % on income | – |
Most European jurisdictions tax capital gains only when the asset is sold, making the Dutch annual mark‑to‑market rule an outlier.
Options for affected investors
- Restructure the portfolio – shift assets toward exempt categories (e.g., real estate or qualifying startup shares) to avoid annual taxation.
- Utilise loss carry‑forward – strategically realize losses in years with gains to reduce the taxable base, remembering that only losses > €500 qualify.
- Relocate tax residency – move to a jurisdiction that does not tax unrealized gains. Countries such as Italy, Greece, Malta, and Cyprus offer regimes with flat taxes, territorial taxation, or full exemption on foreign investment income.
Each option carries its own administrative and financial considerations, and the choice should be aligned with the investor’s overall asset allocation, cash‑flow needs, and long‑term residency plans.
Bottom line: Dutch residents have roughly two years to assess the impact of the upcoming unrealized‑gains tax and to adjust their investment strategy or residency status before the 2028 implementation date.
