This is a summary of an article authored by Stewart Koesten, MSFS, ChFC®, CFP®, CIMA®, AEP®, Cert (IM), GFP Fellow, Chairman at Aspyre Wealth Partners, and recently published on Passport To Wealth.
Why does unrealized gains taxation matter for Americans considering a move to the Netherlands?
Moving abroad is often marketed as simple, with a better lifestyle, lower cost of living, a fresh start. But according to the article, the reality is more complicated, especially when it comes to taxes. As a U.S. citizen or Green Card holder, you’re taxed on worldwide income no matter where you live. If you also become a tax resident of the Netherlands, generally by living there 6+ months a year or establishing your “center of life” there, you may become subject to Dutch taxation on top of U.S. obligations. For Americans with significant investment assets, the article warns that the impact can be dramatic.
How does the Netherlands tax system actually work?
The article explains that Dutch income tax is organized into three categories, or “boxes”:
- Box 1 — Salaries, pensions, and income from work (with deductions for things like mortgage interest and certain healthcare costs)
- Box 2 — Income from business assets in which you hold a substantial interest (5% or more of a business), including related dividends and capital gains
- Box 3 — Income tax on savings and investments, such as bank accounts, brokerage accounts, and rental property
Box 3 is where the article’s central warning lives.
What is the Box 3 wealth tax, and how is it calculated in 2026?
Under current 2026 rules, Box 3 taxes savings and investments based on a fictitious (assumed) rate of return — as high as 6% for brokerage-type investments and around 1.45% for savings — with the result taxed at 36%. There’s a tax-free asset threshold of roughly €59,000 per individual (€118,000 for a couple).
The article walks through an example: a couple with $1,000,000 in Box 3 investment assets (about €1,165,000) would owe roughly €22,600 in tax under this method.
Because a 2021 court ruling found the fictitious-return method violated property rights and non-discrimination principles under the European Convention on Human Rights, taxpayers can currently choose to be taxed on their actual returns (interest, dividends, rental income, and realized gains) if that method results in a lower bill.
What changes are coming in 2027, and why is that a bigger concern?
This is the article’s key warning for high-net-worth Americans. Starting in 2027, the Netherlands is set to tax not just actual returns but also unrealized capital gains, paper gains that haven’t yet been realized through a sale at a flat 36% rate once the tax owed exceeds €1,800.
The article illustrates this with an example: a $1,000,000 brokerage portfolio that grows to $1,200,000 (a $200,000 unrealized gain) could trigger a tax bill of roughly €97,160 once actual returns and unrealized gains are combined. The larger and faster-growing the portfolio, the article notes, the more disproportionate the tax burden becomes; a dynamic it calls a “major deterrent” for wealthy individuals considering relocation to the Netherlands.
Why is taxing unrealized gains especially risky for U.S. expats?
The article flags several risks:
- No offset available. Since the U.S. doesn’t currently tax unrealized gains, there may be no way to credit the Dutch tax against U.S. tax liability.
- Forced asset sales. Without enough cash on hand to pay the Dutch tax, expats may need to sell investments — potentially triggering additional U.S. capital gains tax.
- No loss carryback. Under current rules, a taxpayer who pays tax on a 2027 gain can’t offset that with a 2028 loss in the same portfolio.
The article also notes that the 2027 rules have drawn significant pushback from businesses, individuals, attorneys, and CPAs, and that the Dutch government may reconsider, or potentially moving toward a realized-gains model similar to the U.S. system. Until that happens, however, the article advises high-net-worth individuals to treat this as a real and current planning risk.
What does the article recommend for Americans considering the move?
The article closes with practical guidance for anyone weighing a relocation to the Netherlands:
- If possible, hold off on establishing Dutch tax residency until the unrealized gains tax issue is resolved.
- If you must move, start pre-move tax planning well in advance with a qualified U.S./Netherlands CPA firm experienced in the three-box system.
- If you’re high-net-worth or ultra-high-net-worth, work with a cross-border financial planner to evaluate alternative EU jurisdictions with more favorable tax treatment.
- Review your estate plan with a cross-border attorney, in addition to income tax planning.
Key Takeaway
A move driven by lifestyle should be backed by a cross-border team that includes a CPA, attorney, and CFP® reviewing both your tax exposure and your broader financial plan well before you relocate.
Read the published article here and learn more about Stewart Koesten and Global Financial Planning here.
This post summarizes an article by Stewart Koesten, Senior Wealth Advisor at Aspyre Wealth Partners, originally published in Passport To Wealth. It is intended for general informational purposes and is not individual tax or legal advice. Consult a qualified cross-border CPA, attorney and CFP® before making relocation or tax residency decisions.