Netherlands Parliament Backs Controversial Tax on Unrealized Investment Gains by 2028

2026-01-20 community

The Hague, Tuesday, 20 January 2026.
Dutch lawmakers reluctantly support a groundbreaking tax system requiring investors to pay annual taxes on paper profits from stocks and bonds, even before selling. The measure aims to generate €2.4 billion yearly revenue.

Parliamentary Majority Emerges Despite Widespread Reservations

On Monday, January 19, 2026, the Tweede Kamer (lower house of Dutch parliament) debated the controversial Box 3 tax reform, with parliamentarians posing over 130 questions to caretaker State Secretary Eugène Heijen for Taxation [1]. Despite widespread criticism and reservations, a parliamentary majority has emerged to support the new system, driven primarily by fiscal necessity rather than enthusiasm for the proposal [1][6]. The reluctant consensus includes major parties such as VVD, CDA, JA21, BBB, and PVV, alongside D66 and GroenLinks-PvdA [1]. ChristenUnie parliamentarian Pieter Grinwis captured the prevailing sentiment on January 19, 2026, describing the legislation: “The old law was terrible, it will now be somewhat less terrible” [8].

Financial Pressure Forces Parliamentary Hand

The driving force behind parliamentary support stems from urgent financial considerations rather than policy preference [1][6]. Each year of delay in implementing the new Box 3 system costs the Dutch treasury approximately €2.3 billion annually [1], with the government unable to afford further postponement of the new system [1]. Parliament faces a critical deadline of March 15, 2026, to approve the proposal for implementation in 2028 [5][8]. Failure to meet this timeline would result in a budget deficit of €2.4 billion in 2028 [5][8]. The tight scheduling has effectively eliminated the possibility of substantial amendments, with lawmakers criticizing that “adjustments are now virtually impossible due to the tight planning” [6].

Taxation on Paper Profits Creates Investment Controversy

The most contentious aspect of the new system requires investors in stocks, bonds, and cryptocurrencies to pay annual taxes on unrealized returns—profits that exist only on paper and haven’t been converted to cash [1]. This represents a fundamental shift from traditional capital gains taxation, where investors typically pay taxes only upon selling their investments [GPT]. PVV parliamentarian Henk de Vree has characterized this approach as “unfair,” advocating instead for a pure capital gains tax system that would only tax realized profits [3]. The majority of parties in the Tweede Kamer consider taxing unrealized gains undesirable, but acknowledge the practical constraints [1]. Several coalition partners, including VVD, CDA, JA21, and BBB, explicitly prefer taxation only upon realization for all Box 3 investments [5].

Real Estate Investors Benefit Under New Framework

While securities investors face increased complexity, the new Box 3 system offers significant advantages for real estate investors [1]. Unlike the current system, property owners will be able to deduct expenses from their taxable profits and will only pay tax when they realize their gains through sale [1]. However, there will be an additional tax on personal use of second homes [1]. For vacation homes specifically, the system proposes a real estate addition of 3.35% of the WOZ (property valuation) value, with cost and interest deductions permitted [2]. Under this framework, a non-rented vacation home valued at €100,000 would result in taxable income of €3,350, leading to a tax burden of 1206 = €1,206 at the 36% tax rate [2].

Bronnen

tax policy capital gains