New box 3 system: Dutch Senate demands mitigations

On 12 February 2026, the bill on the Actual Return Box 3 Act was adopted by the Dutch House of Representatives and has since been before the Senate. The starting point of the bill is taxation in box 3 based on the actual return from 2028. The bill offers a solution to the 2021 Christmas judgment, in which the Dutch Supreme Court ruled that the flat-rate box 3 system is in violation of the European Convention on Human Rights. The State Secretary is currently investigating several desired mitigations, which may lead to an amending act on the bill. In addition, the definition of startups is also subject to change.

What does this mean for you?

The new system is a hybrid system based on an asset accumulation tax, combined with a capital gains tax for real estate and shares in and profit participation certificates of startups and scale-ups.

Although the bill has been adopted by the House of Representatives, the final form has not yet been determined: the State Secretary is investigating mitigations and will present a letter on feasibility and coverage before the summer. Depending on this, an amending act may follow.

Depending on the composition of your box 3 assets, this new box 3 system, which should come into effect in 2028, could have a considerable impact. The bill responds to the strong criticism of the current box 3 system and will for the most part no longer levy tax on assets on a flat-rate basis.

A disadvantage is that the new system is quite complex and requires greater effort from taxpayers. It is therefore important to consider what the consequences are for your administration.

Until the entry into force of the new system, the current box 3 system of fixed returns will continue to apply. Under the Box 3 Rebuttal Scheme Act, you have the option of demonstrating that your actual return is lower than your lump sum, in which case you must pay tax on the actual return.

Asset accumulation tax as the main rule

As the main rule, the new box 3 system taxes the actual return on savings and investments based on asset accumulation. This will then be taxed annually on both income from capital (such as interest, dividend and rent) and the increase in value of the capital. This requires an annual valuation of assets and debts according to their fair value. A disadvantage is that you also must pay tax on value developments that you have not yet realized ('paper profits').

Capital gains tax as an exception

For less liquid assets, such as real estate and shares in and profit participation certificates of start-ups and scale-ups, taxation will only take place when the value development has actually been realised. These assets are valued at the acquisition price upon acquisition; When you sell it, you pay tax on the difference with the sales proceeds.

The House of Representatives has passed a motion to investigate how shares in family businesses can fall under the capital gains tax. However, due to the risk of unlawful state aid, the government does not see any scope currently to propose an exception for family businesses in the new box 3 system.

State of the process: discussion in the Senate

During the discussion of the bill, the House of Representatives expressed a lot of criticism of the asset accumulation tax system. A majority of the House then supported motions to have the system transformed into a full capital gains tax. The further development of the box 3 system into a capital gains tax was also included in the coalition agreement of the Jetten cabinet.

The House has also adopted motions requesting mitigating measures such as a carry-back loss set-off and updating the percentages for the real estate addition.

On 12 February 2026, the House of Representatives adopted the bill on the Actual Return Box 3 Act, despite the criticism, and it has since been before the Senate. The Senate has also asked critical questions about this bill.

The State Secretary has promised to come up with a letter before the summer about the outcome of the investigation into the feasibility of these mitigating motions. Should this research lead to an amendment to the bill, it will probably be in the form of an amending act that follows the 2027 Tax Plan. The intended effective date of the bill remains 1 January 2028.

Main aspects of the new box 3 system

Property valuation

For assets that are already owned at the start of the new system, the market value will apply on 1 January 2028. For homes, the bill is in line with the WOZ value with reference date 1 January 2028 (WOZ decision 2029). The vacant value ratio applies to rented homes.

Maintenance and improvement costs

Costs related to the collection, maintenance and acquisition of regular benefits (such as interest, dividend and rent) are directly deductible, for example maintenance and management costs. Interest on box 3 debts counts as negative box 3 income.

Improvement costs and acquisition costs are considered 'deposits' in the asset accumulation tax. In the case of capital gains tax, they increase the acquisition price, so that the costs are only deducted when they are sold. Certain costs are by definition not deductible, such as mixed costs (telephone subscriptions, literature, conferences), fines, penalties and dividend and gambling tax.

Cash system

Deductible costs and regular benefits follow the cash system as the main rule. The system of claims applies to periods that relate to a period longer than one year or that end more than six months after the end (costs) or before the start (benefits) of the calendar year.

Categories of real estate

For immovable property, the bill distinguishes three categories:

Rented out at least 90% of the year: tax on the rental and rental income received.

Not rented out all year: tax on a real estate addition of 3.35% of the WOZ value is taxed.

Mixed use (less than 90% rented): levy on the highest of the rental income or the real estate addition.

Annual maintenance and other periodic costs are deductible in all situations. Improvement costs are activated. The government wants to recalibrate the percentage of the real estate addition for the first time after five years.

In implementation of a motion by the House of Representatives, the government will also conduct additional research into returns on self-owned holiday homes and a legal analysis of a sustainable real estate addition for these homes. A possible adjustment of the real estate addition could be done via an amending act linked to the 2027 Tax Plan.

Start-ups and scale-ups: definition still in flux due to internet consultation

Capital gains tax applies to shares in and profit participation certificates of start-ups and scale-ups. The bill on the Actual Return Box 3 Act currently defines a start-up and scale-up as (i) a company (BV or NV) that (ii) runs a business, (iii) was established no more than five years ago and (iv) has an annual turnover of no more than €30 million. In addition, no more than 25% of the shares may be owned by a company that is not itself a startup or scale-up.

New definition

Because the definition in the bill on the Actual Return Box 3 Act does not sufficiently match the characteristics of start-ups and scale-ups, a new definition is introduced that is workable in practice and feasible for the Tax and Customs Administration. On 1 April 2026, the bill on the Tax Incentive for Startups and Scale-ups Act was published for internet consultation.

According to the draft bill submitted for consultation, a startup or scale-up is a company that is focused on rapid growth through a scalable and repeatable revenue model that has its origins in innovation. The shares may not be traded on a regulated market and the shares may not be directly or indirectly owned by a listed entity for more than 25 percent.

A scalable and repeatable revenue model means that a company, thanks to technology, can grow its revenue quickly without a commensurate increase in costs and resources. The draft bill defines innovation as the development or improvement of products, services, processes or technologies that involve technical innovation or substantial functional improvement in relation to the market.

The Netherlands Enterprise Agency (RVO) assesses by decision whether a company meets the criteria on request. A decision is valid for eight years and can be extended a maximum of three times by five years, so that the startup/scale-up status is possible for up to 23 years. The intention is that the new definition will apply in the new box 3 system in 2028.

For more information, read our Tax News item 'Consultation on legislative proposal for tax incentives for startups '.

Rate and tax-free income

The current tax-free capital will be replaced by a tax-free result of € 1,800. Small annual returns in box 3 therefore remain untaxed. The rate in box 3 will remain at 36%.

Loss relief

Losses in box 3 can be offset indefinitely forward against positive box 3 income from subsequent years, with a threshold of €500 per year. Loss set-off is only possible within box 3. Carry-back loss relief is not possible in the current bill.

However, the House of Representatives has passed a motion requesting the introduction of loss carry-back. The State Secretary has indicated that he is investigating a limited carry-back of one year (from 1 January 2029). The Deputy Minister does not want to consider a carry-back with a period longer than a year because of the substantial budgetary loss and the impact on implementation by the Tax and Customs Administration.

The State Secretary will set out the technical elaboration, feasibility and coverage in the letter that he will send to the Chambers before the summer; any adjustment could be made via an amending act linked to the 2027 Tax Plan.

Exemptions

The current exemptions in box 3 will largely be maintained. Exceptions are the exemption for short-term instalments and obligations and the exemption for green investments (which will expire on 1 January 2027 anyway under the 2025 Tax Plan). Movable property for personal use (such as cars, caravans and boats) is not taxed, unless it is mainly held for investment.

Arm’s‑length principle

In related relationships (for example, between parent and child or between the taxpayer with his own company), as in box 1 and box 2, an arm's length test applies to determine the actual return.

Rights of enjoyment

Specific valuation rules apply to rights of enjoyment, such as usufruct or leasehold rights. Periodic payments are taxed as direct income for the bare owner and deductible for the beneficiary. Value changes are calculated proportionately over time. When purchasing bare ownership of real estate or shares in start-ups and scale-ups, the increase in value is only taxed upon disposal or end of tax liability.

Debt cancellation benefit exemption

The bill contains a remission benefit exemption for financially incomplete claims, similar to those in income and corporation tax.

Emigration

Emigration leads to a fictitious disposal of shares in and profit participation certificates in start-ups and scale-ups and of real estate located abroad, in order to secure the Dutch tax claim. For this, the taxpayer is imposed a protective assessment with deferral of payment that is unlimited in time.

What is next?

The coming months will be crucial for the final design of the new box 3 system:

Bill on the Actual Return Box 3 Act: Before the summer, the Deputy Minister will issue a letter with the outcome of the investigation into mitigations (including carry-back), the feasibility and the coverage thereof from the broad asset domain (the owner-occupied home, box 2, gift and inheritance tax, the corporate income tax rate and box 3).

Amending act: Only when adjustments prove feasible and coverage has been found may an amending act follow, linked to the 2027 Tax Plan.

Start-up/scale-up definition: Submission of the bill on the Tax Incentive for Startups and Scale-ups Act to the House of Representatives is scheduled for September 2026.