On Thursday, February 12, the House of Representatives approved the new wealth tax system (box 3), which should come into effect from 2028. After years of legal wrangling and political discussion, this finally provides clarity about how savings, investments and crypto coins such as Bitcoin (BTC) and Ethereum (ETH) will soon be taxed. However, if the Senate does not approve the bill before March, its introduction will be postponed to 2029.
What will change from 2028?
The new law puts an end to the controversial system in which the Tax Authorities assume a fictitious return, separate from what someone actually earns on their assets. In 2021, the Supreme Court ruled that this approach is unlawful. From 2028, a hybrid model will apply: a combination of tax on actual return and on realized profit, depending on the type of investment.
Investments in savings, shares or cryptocurrency are subject to the so-called capital growth tax. This means that tax is levied annually on interest, dividends and price gains, even if they have not yet been cashed out. The rate has been provisionally set at 36 percent.
An exemption applies to the first 1,800 euros of return. Tax partners may jointly earn 3,600 euros tax-free. Only the excess is taxed.
Exceptions for real estate and start-ups
A separate scheme applies to investments in real estate and young companies (start-ups and scale-ups). This is where a capital gains tax comes in: tax is only levied on the realized profit upon sale. Losses may be offset against profits in other years. Annual income from real estate, such as rent, is taxed, but costs such as maintenance are deductible.
According to the government, this approach ensures that real estate investors do not have to pay tax every year on paper increases in value that they have not yet cashed.
What does this mean for crypto investors?
For owners of Bitcoin and other crypto coins, the new box 3 system means that they will have to pay annual tax on price gains from 2028, even if they have not sold their coins. Only investments in young companies are excluded from this scheme.
That makes the system more complex. The tax authorities will soon have to calculate the actual return for every taxpayer. Banks, investment platforms and other ‘chain partners’ must adapt their systems in a timely manner, which is why the government is aiming for approval by the Senate before mid-March.
Limited loss offset: risk of tax on paper profits
A striking point of criticism: losses may only be offset against future profits. Anyone who achieves a significant price gain in 2028, but suffers a loss in 2029, will still have to pay tax for 2028, even if that money is no longer available in 2029. That could force investors to sell assets at a loss to pay their tax bill.
According to critics, this creates a new imbalance. One investment is taxed on sale, the other on increase in value, regardless of whether this has been realized.
What happens next?
The coalition agreement stipulates that the Netherlands ultimately wants to switch to a complete system based on capital gains. Tax is only levied upon sale, not annually on paper profits. That system is fairer and simpler, but is not yet technically and budgetarily feasible.
Political divisions remain great. The right sees the growth tax as a temporary solution. Left-wing parties fear that a switch to capital gains tax will make tax avoidance easier.
Source: https://newsbit.nl/tweede-kamer-stemt-in-met-nieuwe-box-3-zo-gaat-vermogen-straks-belast-worden/
