The Dutch government has a gift for solving one problem while creating three others. After the Hoge Raad (Supreme Court) struck down the old Box 3 wealth tax system for taxing fictional returns, officials promised a fairer system based on actual profits. What they’re delivering instead, starting January 1, 2028, is something most countries avoid like the plague: a tax on unrealized capital gains that could force ordinary savers to sell investments just to pay their tax bill.
This isn’t just a technical tweak for the wealthy. The new vermogensaanwasbelasting (wealth growth tax) will hit anyone with significant savings, ETFs, or crypto holdings, even if they never cash out a single euro. And the political machine is rushing it through, not because it’s good policy, but because delay costs the state €2.4 billion per year.
From Fictional Returns to Phantom Taxes
For two decades, Box 3 worked on a simple fiction. The Belastingdienst (Tax Authority) assumed your assets grew at a fixed rate, around 1% to 1.2% for savings, higher for investments, regardless of reality. In 2021, the Hoge Raad ruled this violated human rights by taxing non-existent income. Fair enough.
The logical fix? Tax actual dividends, interest, and realized capital gains when you sell. That’s what most countries do. It’s clean, predictable, and respects cash flow reality. But the Dutch government rejected this approach for 2028, calling it too complex and too expensive for the state treasury.
Instead, they chose the aanwasbenadering (accretion approach). Every year, you’ll calculate the total value change of your portfolio, price appreciation plus income, and pay 36% tax on that paper gain. Sold nothing? Doesn’t matter. Your assets gained 30% in value? You owe tax on that full amount, even if the next year they crash 50%.
The Crypto Example That Exposes the Flaw
Let’s make this concrete. Imagine you hold €100,000 in Bitcoin on January 1, 2028. By December 31, your holdings are worth €130,000. You haven’t sold, you can’t buy a house with this, but the Belastingdienst sees €30,000 in “income.”
At 36%, you owe €10,800. In cash. Where does that money come from? Critics from across the political spectrum warn you’ll be forced to liquidate assets, potentially at market lows, just to satisfy a tax bill on profits that exist only on paper. As one parliamentary observer noted, this creates a liquiditeitsprobleem (liquidity problem) that particularly punishes long-term investors who prefer to hold through market cycles.
The system does allow unlimited loss carryforward, but that’s cold comfort. If your €130,000 portfolio crashes to €65,000 the next year, you can’t retroactively recover the €10,800 you paid. You can only offset future gains, creating a multi-year cash flow trap.
The Political Hostage Situation
Here’s where it gets cynical. A majority of the Tweede Kamer (House of Representatives) actually prefers taxing realized gains. The VVD, CDA, JA21, BBB, and PVV, totaling 79 seats, explicitly support a vermogenswinstbelasting (capital gains tax) paid only upon sale. Even staatssecretaris Eugène Heijnen (Fiscal Affairs) admits this is the better long-term goal.
So why the rush to implement the inferior system? Budget pressure and artificial deadlines.
The law must pass by March 15, 2026, to enable IT system changes for a 2028 launch. Each year of delay costs €2.4 billion in lost revenue. The government claims it can’t afford to wait for a better system, so citizens must accept a flawed one. PVV parliamentarian Elmar Vlottes called the chamber “opgejaagd en gegijzeld” (pressured and held hostage), forced to sign off on a policy most agree is suboptimal.
The irony? The old fictional system was killed for violating rights. The new system may do the same by taxing income you never receive. As legal analysts point out, if you can’t offset prior-year losses when you finally sell, you’re being taxed on partially fictitious gains, a similar constitutional problem.
The Real Estate Privilege
Adding fuel to the fire, the reform creates a two-tier system. Vastgoed (real estate) investors get special treatment: they’ll pay tax only when they sell, and can deduct actual costs like mortgage interest and maintenance. Crypto and stock investors get no such luxury. Their paper gains are taxed annually, with no deduction for inflation or holding costs.
This distinction seems arbitrary to many. A second home is a more stable, less volatile asset than crypto, yet its owners get preferential liquidity treatment. The government argues this aligns with European human rights law, but to retail investors, it looks like policy favoring traditional wealth over new forms.
Why Ordinary Savers Should Worry
The Reddit investing community is sounding alarms not for billionaires, but for middle-class accumulators. Someone who built a €150,000 ETF portfolio for retirement could face a €5,000+ annual tax bill during bull markets, forcing them to deplete their nest egg prematurely. The threshold for Box 3 taxation kicks in above the heffingsvrij vermogen (tax-free allowance) of roughly €57,000 per person, so this affects far more than the rich.
International residents are particularly vulnerable. Expats who kept foreign investment accounts, digital nomads with crypto holdings, and fiscale buitenlanders (foreign tax residents) with Dutch property all face complex reporting requirements and potential double taxation issues. The system assumes perfect information and liquid markets, conditions that don’t match reality for many.
The “Temporary” Fantasy
Officials insist the 2028 system is a “necessary intermediate step” toward proper realization-based taxation. But as one cynical observer noted, the unspoken hope is that once implemented, the system will be “quickly forgotten” so the government can keep collecting revenue from unrealized gains.
History supports this skepticism. Temporary taxes have a habit of becoming permanent, especially when they generate billions. The complexity of building IT systems for one regime, only to dismantle it later, makes political reversal unlikely. The €5 billion cost of switching to a realization-based system in the first five years is a powerful deterrent.
What You Can Actually Do
With the March 15, 2026, deadline looming, concerned citizens have limited options:
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Contact Parliament: Email the cie.fin@tweedekamer.nl (Finance Committee) and individual MPs. The research shows active discussion, and pressure matters. Be specific about your situation, generic complaints get ignored.
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Consider Pension Wrappers: Pensioenbeleggen (pension investing) may offer shelter, though access rules are strict. Not ideal for flexible savings.
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Plan for Liquidity: If you hold volatile assets, start building cash reserves for tax bills. This contradicts investment best practices but becomes necessary under the new rules.
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Track Everything: The Belastingdienst will require annual statements of all asset values. Use portfolio tracking tools now to establish clean records.
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Watch the Fine Print: The final law may include inflation adjustments or other tweaks. The debate is still active, though time is short.
The Bigger Picture
This reform reveals a deeper shift in Dutch fiscal philosophy. The poldermodel (consensus-based decision-making) tradition is giving way to budget-driven deadlines. Policy quality is sacrificed for revenue certainty. And the relationship between citizen and state is becoming more extractive, taxing not actual prosperity, but the appearance of it.
For a country that prides itself on pragmatism, taxing money you haven’t made is the opposite. It’s a gamble that markets always go up, that citizens have infinite liquidity, and that constitutional challenges won’t succeed. Ordinary savers are about to find out if those bets pay off, or if their financial plans become collateral damage in The Hague’s budget battles.
The clock is ticking. March 15, 2026, is less than two months away. After that, the path to 2028 is set, and your paper gains become the state’s real revenue.
