The Dutch wealth tax — officially known as Box 3 (vermogensbelasting) — is one of the most misunderstood parts of the Dutch tax system, especially for expats. Unlike most countries that tax your actual investment returns, the Netherlands taxes you based on a deemed return on your total assets. This unique system can work in your favor or against you, depending on your situation.
This guide explains how Box 3 works in 2026, what it means for your savings and investments, and how to legally minimize your tax bill.
How Box 3 Works
The Dutch income tax system has three "boxes":
- Box 1: income from work and primary residence (progressive rates up to 49.5%)
- Box 2: income from substantial shareholdings (holding 5%+ of a company)
- Box 3: income from savings and investments (wealth tax)
Box 3 applies to your net assets — total assets minus qualifying debts — as measured on January 1 of each tax year. The tax is not based on how much you actually earned from these assets during the year.
The Deemed Return System (2026)
Since 2023, the Dutch government has been transitioning to a new Box 3 system. In 2026, the system works as follows:
- Savings (bank deposits) receive a deemed return based on the actual average interest rate for savings in the previous year — approximately 1.5-2.5%
- Investments (stocks, ETFs, bonds, crypto, etc.) receive a fixed deemed return of approximately 6.04%
- Debts are offset against assets, with a deemed interest cost based on mortgage interest averages
The tax rate applied to the deemed return is approximately 36%.
The Tax-Free Allowance
The first portion of your Box 3 assets is exempt from tax:
- Single person: approximately €57,000 tax-free
- Fiscal partners: approximately €114,000 combined tax-free
Only assets above this threshold are subject to the deemed return calculation.
Practical Example
Let us say you are a single expat with the following assets on January 1, 2026:
- Savings account: €40,000
- Investment portfolio: €80,000
- Total: €120,000
After subtracting the tax-free allowance of €57,000, your taxable base is €63,000. The tax office determines how much of this relates to savings vs investments based on the ratio of your assets. In this case, 33% savings and 67% investments.
The deemed return is calculated as roughly: (€21,000 × 2%) + (€42,000 × 6.04%) = €420 + €2,537 = approximately €2,957 deemed return. At 36% tax, you would owe about €1,065 in Box 3 tax.
If your investments actually returned 12% (€9,600 in real gains), your effective tax rate on actual returns is only about 11%. But if your investments lost money, you still owe the same Box 3 tax based on the deemed return — which is the downside of the system.
Savings vs Investments Under Box 3
The different deemed returns for savings vs investments create an important dynamic:
- Savings are taxed lightly — with a deemed return of approximately 2%, the effective tax on savings is about 0.7% of the total value. If you are earning 2.5% interest on your savings account, you keep most of the real return
- Investments are taxed more heavily on paper — with a 6% deemed return, the effective tax is about 2.2% of total investment value. But if your investments earn 8-12% annually, you come out well ahead
The key insight: Box 3 rewards higher returns. If you earn more than the deemed return, the extra gains are tax-free. If you earn less, you are overtaxed.
The 30% Ruling and Box 3
Expats with the 30% ruling can benefit from a partial Box 3 exemption. Under the ruling, you may choose to be treated as a "partial non-resident taxpayer," which means:
- Only your Dutch-source Box 3 assets are taxable (e.g., Dutch real estate, Dutch bank accounts)
- Foreign investments and savings accounts held abroad may be exempt
However, the definition of "Dutch" vs "foreign" has become more complex. A DeGiro account, for instance, is held in the Netherlands even if it holds international ETFs — making those investments Dutch Box 3 assets. Consult a tax advisor for your specific situation.
Strategies to Minimize Box 3 Tax
1. Use Your Tax-Free Allowance Wisely
If you are in a relationship, make sure to file as fiscal partners to double your allowance to €114,000. This can eliminate Box 3 tax entirely for many couples.
2. Time Your Asset Position Around January 1
Since Box 3 is based on your assets on January 1 only, the timing of large purchases or payments can matter. Paying a large bill in December instead of January reduces your January 1 balance. However, the tax authority is aware of this strategy and extreme manipulation may be challenged.
3. Pay Down Qualifying Debts Strategically
Some debts (above a threshold of approximately €3,700 per person) reduce your Box 3 base. However, your primary mortgage is excluded from Box 3 (it falls under Box 1).
4. Consider Green Investments
Investments in approved "green" funds (groene beleggingen) receive a separate exemption of approximately €65,000 per person, plus a tax credit. This can be a meaningful reduction for larger portfolios.
5. Maximize Pension Contributions
Contributions to approved pension products (lijfrente) reduce your Box 1 income and are not counted in Box 3. For freelancers especially, this can be a powerful tax planning tool. Learn more in our Dutch pension system guide.
The Future of Box 3
The Dutch government has been gradually reforming Box 3 after a landmark Supreme Court ruling in 2021 (the "Christmas ruling") that found the old system violated property rights. The current system is transitional, with the government planning to move toward taxation based on actual returns in the coming years.
This means the deemed return system may eventually be replaced by a capital gains-style tax. For now, the system described above applies, but stay informed about changes that could affect your tax planning.
Filing Your Box 3 Declaration
When filing your annual Dutch tax return, you will need:
- Bank statements showing balances on January 1
- Broker statements showing investment values on January 1
- Any foreign account balances
- Outstanding debts (above the threshold)
Most Dutch banks and brokers provide a year-end tax overview that makes this straightforward. For foreign accounts, you will need to convert balances to euros using the exchange rate on January 1.
Box 3 tax is calculated automatically when you enter your assets in the online tax return at the Belastingdienst website. You will need your DigiD to file.