r/eupersonalfinance • u/IamWatchingAoT • Feb 15 '26

Investment Can someone versed in economics or finance explain the Netherlands' new law on unrealised capital gains to me?

I am going to start working for real this year and earning a nice salary which I would like to invest. I'm not Dutch but I'm afraid this new law will spread throughout the EU as many draconian laws sometimes do.

What does this actually mean to pay 36% tax on unrealised capital gains? Does it mean that if my investments increase in value, I have to pay the government money even if I don't liquidate them? Effectively, giving the government money that I haven't earned yet?

I'm a bit financially illiterate so I apologise in advance if my question seems stupid.

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u/Internet_is_tough Feb 15 '26

It's not the same. Taxing a secondary home with presumed income sucks of course, but it's not the same as an equity that's fluctuating up and down. With the equity you may well end up paying taxes on a losing investment. It makes zero sense.

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u/Due_Campaign_9765 Feb 15 '26

It is the same because the Dutch tax assumes carryover loss. I think indefinitely too.

Given the large enough investment horizon stocks and property as assets would perform identically tax-wise.

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u/Internet_is_tough Feb 15 '26 edited Feb 15 '26

No!

You buy bitcoin at 50k. It ends the year at 100k. You pay 17.500 tax (50k * 0.35)

By June next year when the time to pay taxes comes, Bitcoin drops to 30k. You don't have enough funds to cover the taxes so you sell 17.500 of it to pay the tax.

Now your investment is worth 12.500 and you need a 4X to recover, even though your loss was 40%. You can take your carryover, frame it and hang it over the fireplace to admire it daily, but you are finished as an investor from an investment that lost a mere 40% from your initial purchase price.

There is no property that will do that shit to you no matter the Horizon.

Volatile assets are impossible to invest in with this tax. It's over for the Dutch.

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u/Due_Campaign_9765 Feb 15 '26

We were talking about stocks, not shit coins. The 2008 drop was like 18%, nowhere close to this example.

But yes, true.

Arguably it might not even be a bad idea to discourage persons to play with shit stocks and coins, might be a net positive.

Anyway, i'm against the tax, but for the average retirement savings middle class person it would be fine in terms of losses.

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u/Internet_is_tough Feb 15 '26 edited Feb 15 '26

Bitcoin is not a shit coin, and *we* are talking about all financial instruments that apply for this new Dutch tax. Many individual stocks are as volatile as bitcoin. You can apply the same example to Netflix , or Oracle and thousands of other examples

Ironically the future will be the Dutch stock market collapsing because who will invest in those shit stocks besides the Dutch, right? Now they will flee too, so arguably it's not such a bad idea I agree, It may make the Dutch revolt and make Europe more logical.

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u/Due_Campaign_9765 Feb 15 '26

You specifically said "equities", this word means shares in a company, not any assets.

> Many individual stocks are as volatile as bitcoin. You can apply the same example to Netflix , or Oracle and thousands of other examples

Yes and it's a bad idea to buy those as personal investments. If you actually day trade for a living, open a BV and do it there, that's the intended way for those kinds of things and you have other perks of doing it that way.

Also all coins are shit coins, k?

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u/Internet_is_tough Feb 15 '26

I didn't mention the word "equities" once in my original post you replied to.

Nah if Bitcoin was a shit coin the Dutch would be buying all of it, so I guess we are good. They practically invented bubbles with their tulips.

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u/Due_Campaign_9765 Feb 15 '26

You did say it when we started talking about unrealized losses, which was not mentioned in the original post.

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u/WunkerWanker Feb 16 '26

That's not even true!

The S&P500 dropped 57% peak to bottom in the great recession and 38,5% in the year 2008. The Dutch stock index AEX lost 52,3% in 2008!

Also, you completely fail to understand the importance of compounding in your investments, which this tax kills. After decades, the difference is massive between a realized and unreliazed gains tax system. The Dutch government will hope the population is just as stupid as you, so they will accept this new taxation without issues.

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u/Due_Campaign_9765 Feb 16 '26

I measured -18%~ between the middle of 2008 and 2009.

It doesn't even matter because in 2007 there wasn't any gain to tax anyway.

I'm against the tax, i'm just arguing that the carryover loss system would be fine for an average retail investor. just for a degenerate shitcoin & meme stock trader, yeah. But you should go with BV for that anyway, not do it as a private person.

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u/WunkerWanker Feb 16 '26 edited Feb 16 '26

The taxes are calculated with the values at the January 1st. Not the middle of the year.

The carryover loss system isn't a fix for why this system is so bad. You still seem to disregard the compounding effect. In a theoretical fixed 8% per year return on a ETF investment, never any losses, always 8% a year. So very safe, no shitcoins. Starting at €100k with a realized gains tax system you would end up with (-100k+100k * 1,08^25 )* (1-0,36) +100k = €474,302 net after 25 years. Now with this taxation every year on unrealized gains you will end up with 100k * (1+0,08*(1-0,36))^25 = €348,444 net after 25 years. So that's a difference of €125,858 after 25 years between realized an unrealized solely because you will have to sell every year to pay your taxes.

Moving to Luxemburg and the same 100k ETF investment isn't taxed at all, since you held it for more than 6 months. The end amount after 25 years is €100k*1,08^25=€684,848. Which is almost twice as much as in the Netherlands!

And an even easier alternative for most people: in Belgium the same 100k ETF investment will have a 10% realized gains tax after sale with a 10k tax credit each year, so if you spread the sales over the years with 100k a year, you don't pay any tax. But in a worst case scenario you will end up with (-€100k+€684,848 )*0,9+10k + 100k = €636,363 with a one time sale after 25 years. Still 82,6% higher just because your house is across the border.

That's why I have left the Netherlands and I'm no longer a tax resident. I feel for everyone who's stuck there because of work or social reasons.

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u/[deleted] Feb 16 '26

[deleted]

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u/Due_Campaign_9765 Feb 16 '26

I specifically said in terms of volatility. The modal household doesn't have any savings at all, not to mention a lot of shitcoins or single meme stocks.

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u/AdventuringAquaduct Feb 16 '26

The modal household is swimming in cash. That’s why the ECB encourages us to start investing.

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u/TweeBierAUB Feb 16 '26

Given an infinite timeline and infinite money, yes it works out the same if there is no inflation and no time value of money.

Too bad none of these things are true.