Investing for your future is smart, but understanding how your assets are taxed in the Netherlands is just as essential. Whether you’re saving for early retirement, building a safety net, or just letting your money grow, it’s important to factor in the role of taxes. In this blog post, we’ll break down how the Dutch wealth tax works in 2025, how much you can keep tax-free, and what strategies may help you reduce your tax burden.
What Is the Wealth Tax in the Netherlands?
In the Netherlands, individuals pay tax not only on income but also on assets like savings and investments. This tax on your net assets is commonly known as vermogensbelasting or wealth tax. The Dutch Tax and Customs Administration (Belastingdienst) assumes that your assets generate returns and taxes you based on these assumed returns—regardless of your actual profits.
This system helps simplify tax collection, but it also means that even modest returns can be subject to taxation if your total assets exceed a specific exemption threshold.
What Is the Wealth Tax in the Netherlands?
In the Netherlands, individuals pay tax not only on income but also on assets like savings and investments. This tax on your net assets is commonly known as vermogensbelasting or wealth tax. The Dutch Tax and Customs Administration (Belastingdienst) assumes that your assets generate returns and taxes you based on these assumed returns—regardless of your actual profits.
This system helps simplify tax collection, but it also means that even modest returns can be subject to taxation if your total assets exceed a specific exemption threshold.
What Assets Count Toward Wealth Tax?
The Dutch Tax Administration considers several asset categories:
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Cash and bank savings
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Stocks and bonds
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Investment funds
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Rental properties (not your own home)
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Certain insurances
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Cryptocurrencies
Your principal residence and mortgages in box 1 are generally excluded, but second homes or rental properties are included.
Deducting Debts: Lowering Your Taxable Wealth
One way to reduce your taxable assets is by deducting certain eligible debts. However, this doesn’t apply to all types of debt, and there's a minimum threshold you must exceed before it counts.
In 2025, the deduction thresholds are:
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€3,800 without a tax partner
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€7,600 with a tax partner
Any debt beyond these thresholds may be subtracted from your total assets to reduce your tax liability. Qualifying debts can include:
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Personal loans
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Student loans
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Overdraft balances
Note: Mortgage debts related to your primary residence aren’t deductible under this system, as they’re taxed differently (in box 1).
How the Wealth Tax Is Calculated
Rather than taxing your actual returns, the Dutch tax system assumes you earn a fictitious or notional return—a standardized percentage based on the total value of your assets. This return is then taxed under box 3 of your income tax.
The assumed return is split into two parts:
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A conservative return on savings (lower percentage)
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A higher return on investments (stocks, funds, etc.)
The percentages change yearly, based on economic projections. You can check the current figures directly on Belastingdienst’s official website.
Reference Date Matters
The key date is January 1st of the tax year. Your total assets on that date determine your tax obligation for the entire year.
Example:
Let’s say that on January 1, 2025, you have:
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€50,000 in a savings account
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€10,000 in investments
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No tax partner
Your total wealth is €60,000. After subtracting the exemption (€57,684), you’ll be taxed on the remaining €2,316.
Dividend Tax: Don’t Overlook It
If your investments generate dividends, tax may already have been withheld by the broker or fund. This is called dividend tax, and in many cases, you can offset it against your final income tax bill, particularly if your investment platform supports it.
There are platforms, like Degiro, that allow Dutch investors to reclaim part of this tax.
Taxes on your investments might not be thrilling to think about, but with some planning, you can avoid unnecessary surprises. Track your assets, leverage the tax-free allowance, deduct eligible debts, and be mindful of the January 1 reference date. And most importantly, choose an investment strategy that aligns with your financial goals, even in the face of taxes.
If you’re just getting started with investing in the Netherlands, or want to ensure your approach is as tax-smart as it is growth-oriented, taking a few minutes to understand these rules can pay dividends, literally.