Why the Box 3 system is changing

The Box 3 system was designed to tax wealth in a simple and uniform way. However, the use of a fictitious return led to situations where taxpayers paid tax on income they did not actually earn.

This was particularly relevant for people with savings or low-risk investments, especially in years with low interest rates or poor investment performance.

Legal Background

The old Box 3 system resulted in legal challenges. The Dutch Supreme Court ruled that taxing assets based on a fictitious return, without sufficient regard for actual income, violated property rights.

As a result, the system was legally unsustainable in its original form.

Policy Direction

Following the court ruling, the aim became to move toward a system that better reflects economic reality.

The focus shifted to:

• Taxation based on actual income and value development
• Avoiding taxation on income that does not exist
• Improving legal certainty and fairness for taxpayers

The shift illustrates a clear trade-off: the old fictitious system was simple but often unfair, while the new actual-return system is fairer but more complex.

This includes taxing unrealized value increases on investments from 2028 onward, even if assets have not been sold, with limited exceptions.