While I’m personally also not thrilled about such taxation, it does not automatically signify the end of a country. I personally think that the combination of high taxes, including unrealized capital gains tax, and high governmental trust and many free services can also be a working country model. I see Denmark as a prime example for this. Having a happy population, low corruption and livable cities seems to make the package as a whole attractive.
In other words, if you tax on unrealized capital gains, you also have to offer something in return. Not sure what the Dutch offer is.
If this passes in the Netherlands and becomes tax law to be enforced, the financial industry friendly banks will come up with products that allow retail investors to invest in such a way that the tax issue will be taken care of at the fund / ETF level (for a small fee).
Too bad that the previously savvy retail investor investing directly into companies (or funds / ETFs without such a wrapper) will be left standing in the rain, but rest assured that the professional asset managers will find a way around this and mostly remain unscathed.
If regarded as too political, please feel free to move this post to the censored pile as well. /s
The problem: taxation is based on wealth as at 1st January (if I correctly understand)
The solution: sell all your assets on 31 December and buy them back on 2 January. No tax on unrealised gains.
Taxation: no tax on unrealised gains (the question of whether there is tax on realised gains is quite another matter; I am not aware of this being the case in the Netherlands).
Based on the reports from IMI Daily and recent developments in February 2026, here is a 3-short bullet point summary of the new Dutch tax law:
Flat 36% Rate on Paper Gains: Starting January 1, 2028, most liquid assets—including >cryptocurrencies, stocks, and bonds—will be taxed at a flat rate of 36% on their annual increase in value, even if the assets are not sold.
Replacement of “Fictive” Returns: This legislation (the Actual Return in Box 3 Act) replaces the old system of taxing “assumed” profits, which the Dutch Supreme Court ruled unconstitutional, but introduces significant liquidity risks by forcing investors to pay tax on cash they haven’t yet realized.
Exemptions for Real Estate: Unlike liquid securities, real estate and startup shares are exempt from the annual unrealized tax; they will instead be taxed only upon sale (traditional capital gains approach) to avoid forcing owners to sell illiquid assets to cover tax bills.
I personally find this just dumb (given the anticipated consequences for the Netherlands), regardless of what poltical view one might have, but of course your view might be different and I might be completely wrong.
Practical question:
If they tax unrealised gains (the new unrealised gains every year I guess?), what happens if the asset value declines?
Example:
I buy stocks for 100 €
First year they have gone up 100€ to 200€ → 36 € tax
Second year they go up 200 € to 400 € → 72€ tax
Third year - 75%, - 300€ , back down to 100 € → ?
We’d need to dive into the the details of Dutch taxation, it’s not clear to me it’s worse for investors than their current system (where before it was struck down by courts, you could be taxed on more than your actual gains, even with losses). It’s a flat rate rather than progressive so if you get market return (5-6%) you end with the same overall tax in the old and new system (tho old system was smoothed).
If you do beat the market then yeah you’ll be taxed more (but maybe those beating the market are also more likely to have large losses and revert to the mean long term)
In all fairness, I never liked the old system either. It was one thing when the assumed gains were ridiculously underestimated, but a ~2% tax is kinda killing for FIRE purposes if a SWR is 3-4%.
a realized CGT is just advantageous for FIRE as the worst “sequence of returns” likely mean you have no/little gains (maybe except for runaway inflation), and hence you pay little tax in the worst case and you pay a lot of tax in the good case. A more constant wealth tax (and Switzerland absolutely suffers this, it is just less of a problem due to the tax being lower) doesn’t have this effect as much (of course you pay tax on a lower base if the market is down, but you still pay a bunch).
Now my problem with the unrealized CGT:
The level is relatively high, among the highest in Europe I believe (e.g. Germany, France, Poland, UK are lower)
It punishes the volatility we see by going mostly into stocks.
You can’t defer the taxes, though the net effect of this is lower than most people assume (IIRC I ran tests on the S&P 500 with a deferred and non-deferred 20% tax, and IIRC the difference was only 0.1-0.2 percentage points in returns. Maybe a bigger effect with the higher taxes)
Additionally in the recent elections, a bunch of parties proposed a wealth tax on top of this, as well as an increase of the capital gains tax rate. Like D66 (one of the now government parties), wanted to increase the CGT rate to 40% and introduce a 1% wealth tax on wealth above 1 million euro, making it hard to beat inflation after tax (e.g. assuming 3% inflation you’d need a nominal return of 6.6% pre-tax) That said, election programmes and actual execution are different things, so who knows what will happen.
Note that e.g. real estate is excluded from the new rules, but since a year or two there’s been an increased scope for rent controls, so I’m not sure how much of an escape hatch it would be (and in Switzerland I’ve been on the REIT train due to it being completely hands off).
But I’m increasingly pessimistic about moving back to the Netherlands if/when FIREing, as the increase in tax will likely more than offset the lower cost of living. There are a couple of cheaper options in Europe that seem reasonable like Germany (I already learned German in Switzerland) or the UK, but both have recently also discussed increasing or actually increased tax rates. Like in Germany there was something about paying social contributions on capital gains, and the UK has increased both dividend and capital gains tax rates with the current Labour government. And with the high deficits in most European countries and lots of anti-rich people rhetoric, I suspect this won’t be the last tax increase seen here.
So this highlights every country has some regulatory risk and while the Netherlands looks particularly bad right now, it is no guarantee other countries will be better. So
Do you still have relatives in the Netherlands? How do they feel about those changes since, as Netherland is a democracy, they voted exactly those people in power?
I don’t know, I think I’m the only one on the “make enough to FIRE” track in the family and
I feel there are bigger issues in the Netherlands (like housing crisis)
A bunch of the elected parties actually wanted a realized gains tax, but for whatever reason this was considered more difficult to implement and the tax service has been a continuous disaster as not being able to keep up with the changing tax code. So since the legal system decided that the current system was illegal, I can see why they went for the quick instead of the wanted solution.
Now of course since the problem is “fixed” I strongly suspect the pressure is gone to tweak the system more, so I doubt the realized CGT will come anytime soon.
Note that with >5% ownership in a company you get a different realized CGT system already, so this mainly impacts “somewhat rich” folks putting things in public stock market funds rather than big company owners. So us FIREing folks are probably the hardest hit group actually.
I think the issue with standard capital gain taxes was that you would have a transition period where there would be almost no tax revenue (too few sellers during the first years).
Talking about nasty tax surprises: This reminded me the UK didn’t have CGT till the Beatles circumvented the at the time 95% top income tax rate in the 1960s.
The treatment of ETFs by Ireland, the de facto home of the European ETF, is much much worse, to the point that no Irish residents buy UCITS ETFs.
With a clear head, I am not sure where this type of conversation fits in this forum. Given these are not Swiss taxes we’re talking about they don’t impact any Swiss tax resident. Perhaps it’d fit better along “country to FIRE” type conversations.
That said, this type of discussing the news and policy is very interesting to me, both in terms of education, staying up to date, but also discussing through the what/why/how and hearing other members’ opinions. The sting in the left tail of this type of discussion is that it does get heavily into politics - not policy - which means the question is “what does this forum want to be?”. If it wants to be a strict Swiss FIRE forum then…it’d be useful as a resource but boring as a forum (sorry, not sorry!). If it wants to be a broader forum for discussing economics, finance, investing philosophies/methodologies/news as mature educated adults then that’s a ton more interesting to me - which is of course meaningful only at the individual member level.
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and revert to the mean long term)