Netherlands Box 3 Tax Restructure 2026: What Changes After the Supreme Court Ruling

The Netherlands’ Box 3 system — the wealth tax on deemed investment returns from savings and investments — has been in turmoil since a landmark Supreme Court ruling in December 2021 declared it unconstitutional. The court found that taxing people on fictitious returns, when actual returns were significantly lower (or even negative), violated property rights and the principle of fair taxation.

This guide explains what Box 3 is, what the Supreme Court ruling means in practice, how the transitional regime works (it still uses deemed returns, now split by asset category), what is proposed from 2028, and the specific implications for expats — including the interaction with the 30% ruling and the option to exclude foreign assets from Dutch wealth tax.

The Supreme Court Ruling and What It Changed

Before 2022, the Netherlands taxed Box 3 assets on a deemed (fictitious) return. The system assumed investors earned a certain percentage return on their assets, regardless of what they actually earned. For example, the assumed return on savings above the exemption was set at rates that bore no relationship to actual bank deposit rates — particularly problematic during the period of near-zero or negative interest rates from 2015–2021, when savers earned virtually nothing but were still taxed on an assumed return of 2–4%.

In its landmark Kerst ruling of 24 December 2021, the Dutch Supreme Court (Hoge Raad) ruled that this system violated the European Convention on Human Rights (Protocol 1, Article 1 — right to peaceful enjoyment of possessions) and the non-discrimination provisions of the ECHR. The court held that individuals who actually earned less than the fictitious return were entitled to compensation.

Compensation for Objectors

The Belastingdienst implemented a mass objection process. Taxpayers who had lodged timely objections to their Box 3 assessments for 2017–2020 were entitled to a recalculation based on actual returns. Billions of euros in refunds have been issued. Those who did not object in time generally do not qualify for automatic compensation, though some cases are still being litigated.

Political and Legislative Response

The ruling forced the Dutch government to overhaul Box 3 entirely. Emergency ‘bridging’ legislation was introduced for 2023 onwards, and a new permanent system is planned from 1 January 2028. The bill passed the Tweede Kamer on 12 February 2026. The Eerste Kamer held its plenary debate on 30 June 2026 and had not passed the bill as of early October 2026. The debate has been contentious, with significant political disagreement over how to tax wealth fairly while maintaining the tax base.

The Interim Actual Returns Regime (2022–2026)

From tax year 2023 until a new system takes effect, the Netherlands uses a transitional system (Wet overbrugging box 3). Despite the ‘actual returns’ label often used for it, this system still taxes a deemed return — the difference from the old system is that the deemed return now depends on how your assets are actually split between categories:

Asset Categories and Deemed Returns

Each category has its own deemed return rate (2026 figures):

• Bank deposits and cash savings: deemed return of 1.28% (provisional — the final rate is set after the year ends).
• Other assets — shares, bonds, investment funds, crypto, and real estate other than your primary residence: deemed return of 6.00%. Actual dividends, interest and price changes are not used — the deemed rate applies.
• Debts: deductible at a deemed rate of 2.70% (provisional), after a €3,800 debt threshold per person.

If your actual return in a year was lower than the deemed return, you can now claim taxation on the actual return instead (the ‘tegenbewijsregeling’), but you must prove it. Otherwise the system remains fictitious: savers are taxed close to prevailing interest rates, while investors with share portfolios continue to be taxed on a deemed return that may not match reality.

The 36% Rate and Exemption

The Box 3 tax rate is 36% on the net deemed return, which is apportioned to your assets above the exemption. The 2026 exemption (heffingsvrij vermogen) is €59,357 per individual (€118,714 for fiscal partners). This exemption is applied to the total Box 3 asset base — assets below the threshold generate no Box 3 tax.

Proposed 2027 System: Unrealised Gains Tax

The Dutch government has proposed a permanent new Box 3 system from 1 January 2028 (Wet werkelijk rendement box 3) based on actual annual returns including unrealised gains. This system — known as ‘vermogensaanwasbelasting’ (capital increment tax) — would tax:

• Actual interest, dividends, and rental income received
• Realised capital gains from the sale of assets
• Unrealised gains: the increase in the market value of investments, real estate, and other assets held at year-end, even if not yet sold

The proposed tax rate is 36% on the combined actual returns including unrealised gains; the details of the tax-free allowance are set in the bill and may still change before enactment.

Criticism and Uncertainty

The proposed system has attracted significant criticism:

• Taxing unrealised gains is administratively complex, requiring annual valuations of all investment assets
• It creates liquidity problems: investors may owe tax on gains they have not yet converted to cash
• Foreign investors holding Dutch assets would face complex valuations
• Political opposition from several parties has raised doubts about whether the 2028 timeline will be met

As of early October 2026, the bill has passed the Tweede Kamer (12 February 2026) but the Eerste Kamer has not passed it (plenary debate held 30 June 2026; further discussion with the ministers was scheduled for 5 October 2026) — the new system is not yet law and could be modified or delayed. The current transitional system continues until a new permanent regime is legislated. Expats should monitor developments through the Belastingdienst website.

Impact on Expats and 30% Ruling Holders

Box 3 Applies to All Dutch Tax Residents

Box 3 applies to all individuals who are Dutch tax residents, including expats on temporary assignments, 30% ruling holders, and foreign nationals who have become Dutch residents. This means foreign investment accounts, foreign savings, foreign real estate (other than the primary residence), and other non-Dutch financial assets held by Dutch residents are all potentially in scope for Box 3.

The Partial Non-Resident Option for 30% Ruling Holders

The option to elect partial non-resident status (keuzerecht voor partieel buitenlandse belastingplicht) was abolished from 1 January 2025. Under transitional rules, employees who already had the 30% ruling in the last payroll period of 2023 can keep using it until the end of 2026; nobody can use it from 2027. Under this election:

• Box 3 applies only to Dutch assets — Dutch bank accounts, Dutch real estate (other than the primary home), and substantial interests in Dutch companies
• Foreign investment portfolios, foreign bank accounts, and non-Dutch real estate are excluded from Box 3
• The election is made annually on the Dutch income tax return

For an expat with a significant US investment portfolio, UK pension fund, or foreign property holding, this election can eliminate Box 3 entirely on those assets for 2026, the last year it is available. This is a substantial financial benefit that is separate from the income tax saving of the 30% ruling itself.

Practical Example

An expat earning €120,000 under a 30% ruling that began before 2024, with €500,000 in foreign investments, elects partial non-resident status for 2026. Without the election, Box 3 on €500,000 (€440,643 above the €59,357 exemption) would be approximately €9,518 for 2026 (€440,643 × 6.00% deemed return × 36%). By electing partial non-resident status, those foreign investments are outside Dutch Box 3 entirely for 2026 — a saving of ~€9,518 in addition to the income tax saving from the ruling. From 2027 the election is no longer available.

Compensation Claims

Dutch residents who objected to Box 3 assessments in prior years may be entitled to compensation under the mass objection procedure. If you filed Dutch tax returns as a resident in 2017–2020 and lodged timely objections, contact the Belastingdienst or a Dutch tax adviser to assess your entitlement.