Box 3 in 2026: How Does It Work and What Does It Mean for Investors?
Box 3 is understandably raising questions among investors. A lot has changed in recent years, and a completely new system is (expected to be) introduced starting in 2028. What does this mean for you, and how does an investment in a real estate fund like Goldberg Gardens I fit into this picture? In this article, we outline the current state of affairs.
What is Box 3?
Box 3 is the section of the Dutch income tax system where your income from savings and investments is taxed. You pay 36% tax on this income (2026 rate). Box 3 income can be determined in two ways:
Flat-rate. In this case, the tax authorities do not base their calculation on what you actually earned, but on an assumed return on your assets as of January 1 of the tax year.
Based on the actual return, including increases/decreases in value. Interest may be deducted, but other costs may not.
The income tax return generally uses the flat-rate method. If you also report your actual return, the method that is most advantageous to you will be applied automatically.
What flat rates apply for 2026?
The flat-rate return percentages are set annually. For 2026, the percentages are:
Bank balances: 1.28% (provisional)
Investments and other assets: 6.00% (final)
Debt: 2.70% (provisional)
The percentage for investments and other assets is set at the beginning of the year and is therefore already final for 2026. The percentages for bank balances and liabilities are provisional and will be finalized in early 2027. The percentages for 2027 are not yet known.
Under the flat-rate system, a tax-free allowance applies. You do not pay tax on this amount. For 2026, the tax-free allowance is €59,357 per person and €118,714 for married or domestic partners combined.
How is a vacation home valued under Box 3?
Residences, including vacation homes, are assessed based on their WOZ value. The reference date for that WOZ value is January 1 of the year preceding the tax year. Therefore, the WOZ value as of January 1, 2025, will be used for the 2026 tax return.
For long-term rentals, the value of homes in Box 3 can be reduced using the vacancy value ratio. The vacancy value ratio does not apply to vacation homes that are rented out on a short-term basis.
Actual return
Following rulings by the Supreme Court in June 2024, the law has been amended to allow Box 3 income to be calculated based on actual returns as well. If you report your actual returns on your tax return, the system will automatically apply the most advantageous method (flat rate vs. actual returns).
For Box 3, the actual return consists of income received (such as interest, dividends, and rent) and the increase or decrease in the value of your assets, less interest paid on debts in Box 3. Other expenses, such as maintenance, management fees, or insurance, may not be deducted.
Three key points to keep in mind are:
The actual return must be applied to your total Box 3 assets, not to individual assets. Therefore, you may not choose between the flat rate and the actual return on a per-asset basis.
For actual returns, there is no tax-exempt allowance or income; all gains (including unrealized capital gains) are included
A negative actual return does not result in a tax-deductible loss. In that case, the Box 3 income is set at zero.
What is the tax deduction for personal use of a second home?
Starting in 2026, when calculating the actual return, an additional tax liability will be included for a second home—such as a vacation home—for the period during which it is available for your personal use. To determine this additional tax liability, you may choose between two methods:
The economic rental value, i.e., the rent that would be charged for a comparable dwelling under normal circumstances; or
5.06% of the assessed value.
The Tax and Customs Administration assumes that a privately owned vacation home is available for your personal use on every day that it is not rented out. This directly affects private owners of vacation homes. However, the properties at Goldberg Gardens are not at your disposal, even when they are vacant. For this reason, the additional tax liability for personal use does not apply to the properties of which you are a co-owner through your shares. The only exception to this is for the days on which you personally use a property via your Goldberg Gardens Credits.
Please note that the additional tax liability for a second home or other real estate is likely to be structured differently under a future Box 3 system.
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When is the actual return more favorable?
In practice, the actual return is particularly attractive when the actual return falls short of the flat rate—for example, due to limited income or declines in value. When there is strong growth in value, however, the flat-rate system tends to be more favorable.
How is my ownership interest in Goldberg Gardens I ?
Goldberg Gardens I tax-transparent. This means that the fund’s assets and liabilities are treated as if they were held directly by you, in proportion to your ownership interest. For individuals residing in the Netherlands, the Units are generally taxed under Box 3.
For Box 3, transparency means that you include your share of the fund’s assets (real estate, cash and cash equivalents, liabilities) in the relevant categories in Box 3. The calculation of the actual return is based on your share of rental and other income, increases and decreases in value, and interest expenses. For the days on which you can use vacation homes yourself through your Goldberg Gardens Credits, you must only take the additional tax liability for personal use into account when calculating the actual return for those days. The additional tax liability does not apply to the period during which homes are vacant but are not at your disposal. If you own a vacation home, however, you must take the additional tax liability into account for every day the home is vacant.
There is a specific nuance regarding the timing of acquisition. The Participations will be issued in the course of 2026 and will therefore not yet be in your possession as of January 1, 2026. If you use the flat-rate system for Box 3, the participations will therefore not be subject to taxation until 2027. If, on the other hand, you use the actual return method, the income must already be included in the tax return for 2026.
Possible new Box 3 system starting in 2028
The government plans to make significant changes to the Box 3 system starting in 2028. Under the new system, you will pay income tax on real estate based on the actual return, after deducting expenses. For real estate that is rented out for less than 90% of the time in a given year, an additional tax liability will likely apply, regardless of whether it is actually at your disposal.
There is still much debate in political circles about the final rules, and it is not yet certain whether the new system will be implemented by 2028. We will update this article as soon as more details about the final rules become available.
Want to learn more about investing in mutual funds under the current rules?
We do not provide advice on your tax return, but we are happy to explain how Goldberg Gardens I is structured Goldberg Gardens I and what that means for the returns you will receive. Request the brochure and the Information Memorandum, or schedule a meeting with our investment managers.
Frequently asked questions
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The flat-rate return on investments and other assets, including real estate, stocks, bonds, and mutual funds, will be 6.00% in 2026. This rate has been finalized.
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In 2026, the tax-exempt allowance will be €59,357 per person and €118,714 for tax partners jointly under the flat-rate system. Under the rebuttal rule, no tax-exempt allowance applies.
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You can report your actual return on investment annually on your tax return. The Tax and Customs Administration will then use the amount that is most advantageous to you. When determining the actual return on investment, your entire Box 3 assets are taken into account. Therefore, you cannot apply this rule to only certain assets and/or liabilities.
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Actual return consists of income received and increases or decreases in the value of your assets, minus interest paid on Box 3 debts. Other costs, such as maintenance or management fees, are not deductible. However, investments that demonstrably increase the WOZ value of a home are excluded from the actual return, provided that the municipality took this investment into account when determining the WOZ value.
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Starting in 2026, an additional tax liability will be included in the calculation of the actual return for a vacation home that you can use yourself. You may choose between the economic rental value or 5.06% of the WOZ value, with the additional tax liability determined in proportion to the number of days in the year that the property is available for your own use. If you invest in Goldberg Gardens, your own use will only be counted for the period during which you can use the properties via your Goldberg Gardens Credits. For a vacation home that you own directly, you include the personal use tax addition for every day the home is not rented out.
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Goldberg Gardens I tax-transparent. The fund’s assets and liabilities are deemed to be held directly by you, in proportion to your ownership interest. For individual participants, their interest is generally taxed under Box 3, whereby the pro-rata share in the real estate, cash and cash equivalents, and fund liabilities is reported directly. Within Box 3, the flat-rate system is applied, with the option to use the actual return if it is lower. If your participation is considered part of your business assets, taxation under Box 1 may also apply. However, this is not common.
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The shares will be issued in the course of 2026. If you use the flat-rate system for 2026, your shares will be taxed for the first time under Box 3 in the 2027 tax year. If you use the actual return method, the income from the fund will already be included in your 2026 tax return.
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