This is stated in the plans that State Secretary Marnix van Rij of Taxes (CDA) sent to the House of Representatives on Friday afternoon. It is his final proposal for the reform of the capital gains tax (Tax Box 3). Van Rij proposes to tax savings deposits and securities portfolios annually based on the actual return achieved (capital growth tax).
For savings deposits, this is a percentage (Van Rij suggests 33 to 37 percent) of the savings interest credited. The wealth tax on shares, bonds and other securities amounts to the same percentage of the total price gain over one calendar year. If the return on the securities portfolio in a tax year is negative on balance, the investor may offset those losses against the price gains in subsequent years.
About the author
Yvonne Hofs is a political reporter for de Volkskrant and writes about finance, economic affairs and agriculture, nature and fishing.
A capital growth tax, which is settled annually by the tax authorities, is not suitable for real estate. Real estate is subject to large increases and decreases in value in one year. In 2021, house prices rose by as much as 20 percent in some municipalities. Some taxpayers would then receive such a high tax bill that they could only pay it if they sold the property – perhaps at an unfavorable time.
Difference between purchase and sales price
Van Rij therefore opts for a capital gains tax on real estate investments. This means that real estate investors only have to deal with the tax authorities when they dispose of their property. The seller then pays wealth tax on the difference between the purchase and sales price. Maintenance and other costs become tax deductible.
If there is a loss upon sale, the home owner may also offset his loss here. The annual rental income from rented property is added to the capital gain and also taxed in one go when sold. In the event of death or emigration, the tax authorities must be settled immediately, even if the property is not sold.
Own home out of harm’s way
Your own home remains out of harm’s way. The notional rental value for income tax (Box 1) continues to apply.
Van Rij also recommends a new scheme for owners of a second home that they do not rent out. About a third of Dutch people who own a second home only use it as a holiday home. So they do not collect rental income. To limit the administrative burden for this group, Van Rij also wants to tax non-rented holiday homes at a flat rate. The taxpayer then pays a fixed percentage of wealth tax every year, just like on the first home, regardless of the value development of that property. Anyone who owns more than two homes must pay capital gains tax on the third and possibly fourth homes, even if those properties are not rented out.
Capital gains tax, which the taxpayer only pays when he sells his assets, also applies to small shareholders (less than 5 percent of the share capital) of family businesses and to investors in start-up companies. Van Rij wants to treat these groups differently from other shareholders, because their shares are not as easy to trade as other securities. The government also wants to stimulate investments in innovative start-ups.
Plans are anything but certain
Whether the new wealth tax regime will actually look like Van Rij has in mind is anything but certain. The parliamentary debate will have to wait a while. The proposal is now available for internet consultation. This means that interest groups and experts may first give their views on the proposal.
Van Rij or his successor can adjust the proposal based on these expert opinions before it goes to the Council of State. Only after the Council of State has advised on it will the bill be placed on the agenda of the House of Representatives.
The reform of the capital gains tax has been enforced by the Supreme Court, which ruled at the end of 2021 that the way in which assets have been taxed in the Netherlands since 2017 is unlawful. Because the Tax Authorities assumed a fictitious return that in recent years was much higher than the actual, very low savings interest rate, the Supreme Court found that the government is infringing on the property rights of savers. Since then, a bridging scheme has been in place whereby savers pay less tax than security holders.