Dutch Coalition Under Fire Over Plans to Abolish Tax on Unrealized Gains

Plans by Dutch coalition parties to stop taxing unrealized gains — income from shares, property, and other investments that have not yet been sold — have caused significant controversy. The key question facing the government: how to compensate for revenue losses, as funding sources remain undefined. Last week, the coalition announced its intention to accelerate the reform of the Box 3 wealth taxation system, which is set to take effect in 2028. Under the new model, taxes would only be levied on actual profit after assets are sold, rather than on "paper" gains that investors have not yet received.

During parliamentary debates, ChristenUnie MP Pieter Grinwis questioned whether the coalition had considered the impact of these changes on the treasury, given that no reserves have been allocated. Acting State Secretary for Finance Eugeen Heijnen (BBB) agreed with this criticism, noting: "I also read the coalition agreement and the financial framework — and had the same question."

Heijnen, who supports introducing a capital gains tax, called the current proposal an "intermediate step" and emphasized that the final decision would be made by the new cabinet and parliament. "I assume that attention will also be paid to the budgetary consequences," he added.

So far, the government has only calculated the impact of exempting unrealized gains from property and startup shares. According to estimates, this would cost the treasury 23 billion euros over ten years. Heijnen stressed that a full transition to a capital gains tax would require new, broader financial calculations. Despite the uncertainty, a broad majority in parliament is forming in support of a full capital gains tax. Supporters include coalition parties, JA21, and BBB. Meanwhile, GroenLinks-PvdA representative Luc Stultiens criticized the coalition's approach, saying it is "incredible" how these parties can support the reform without knowing its actual cost.