EU Wealth Taxes Rising? Netherlands Plan Explained
By Randal K. Walker | Created on 19th April 2026
The Netherlands is considering a 36% tax on unrealized capital gains under proposed reforms to its Box 3 system. If implemented, savings and investments would be taxed annually based on actual returns, including paper gains on assets such as stocks, bonds, and cryptocurrencies, not just realized profits.
The proposal raises a broader question: could other EU countries follow? With implementation targeted for January 1, 2028, investors and residents have limited time to assess the potential impact and consider their options.
Background: The Dutch Box 3 Reform
The “Actual Return in Box 3 Act” was approved by the Dutch House of Representatives (Tweede Kamer) on February 12 and has already sparked significant debate. Critics argue that taxing unrealized gains could force investors to sell assets to pay taxes on paper profits, discourage long-term investment, and increase the risk of capital outflows.
The Dutch Senate has yet to vote, and amendments are still possible. However, the direction is clear: the Dutch government is moving toward higher taxation of capital.
Why This Matters Beyond the Netherlands
The Netherlands is not operating in isolation. Across the European Union, most countries are running persistent budget deficits, driven by government spending pressures and slower economic growth. Only a handful of countries have achieved surpluses or near balance in recent years.
At the same time, there is a structural imbalance within the EU budget. Roughly ten member states are net contributors, while the majority are net beneficiaries, receiving more than they contribute. Notably, every country that has joined the EU since 1995 has been a net recipient, and current candidate countries are also likely to fall into that category.
This dynamic increases fiscal pressure on wealthier member states. If the Netherlands proceeds with taxing unrealized gains, it may set a precedent. Other EU countries facing similar pressures could adopt comparable policies over time.
Implications for Residents of the Netherlands
If enacted, the new system would affect all tax residents, regardless of citizenship. For investors, this introduces a shift in how and when income is taxed. Instead of paying tax upon realization, individuals could face annual tax liabilities based on fluctuating asset values.
This raises concerns around liquidity, timing, and long-term planning. While relocation is a personal decision, the timeline to 2028 means that those considering a change in tax residency would need to plan well in advance.
The Bigger Trend: Mobility of Capital and People
Global mobility is no longer a niche phenomenon. Around nine million U.S. citizens already live abroad, and across Western economies, tens of millions reside outside their country of birth. Surveys suggest that between 115 and 195 million adults across the United States, Europe, and other Western countries have at least considered moving abroad.
Although only a small percentage actually relocate each year, even modest increases can translate into millions of people moving globally. When taxation of capital rises, mobile individuals, particularly higher earners, tend to respond by relocating.
Where Are Expats Moving?
Recent relocation trends reflect a mix of tax considerations, lifestyle preferences, and practical constraints.
Some high-income individuals are drawn to jurisdictions such as the United Arab Emirates and Monaco, which offer minimal or no taxation on personal income and capital gains. However, these destinations come with trade-offs, including high costs, limited long-term permanence, and, in some cases, restrictive legal or cultural environments.
Others choose Southern European countries such as Italy or Greece, which combine lifestyle appeal with targeted tax incentives. Lower-cost regions such as Mexico, Latin America, and Southeast Asia also attract expats, particularly retirees and remote workers, but they tend to offer less predictable tax regimes and varying levels of infrastructure, healthcare, and institutional stability.
Singapore stands apart as a high-end global hub, though its cost of living and strict immigration requirements limit accessibility for many.
Turkey offers an appealing Mediterranean lifestyle, with approximately 8,333 kilometers, or about 5,178 miles, of coastline spanning the Aegean, Mediterranean, Black Sea, and the Sea of Marmara. The country combines a rich cultural environment with strong global connectivity, anchored by Istanbul, one of the world’s major aviation hubs.
Residency and citizenship pathways are also relatively accessible. Turkey’s citizenship-by-investment program allows applicants to obtain citizenship through a real estate purchase starting at $400,000 USD, typically within a year and without a minimum residency requirement.
From a practical standpoint, Turkey provides modern infrastructure, a well-developed healthcare system, and a cost of living that remains lower than in many Western countries, even as it has risen in recent years.
From a tax perspective, Turkey occupies a middle ground. It does not tax unrealized capital gains, and its top personal income tax rates are generally lower than those in much of Western Europe.
In addition, Turkey maintains an extensive network of more than 80 double taxation treaties, including agreements with most major EU economies and the United States. These treaties help prevent income from being taxed twice and provide greater certainty for internationally mobile individuals.
Conclusion
The proposed Dutch tax on unrealized capital gains reflects a broader trend. Governments facing fiscal pressure are increasingly looking toward capital as a source of revenue.
Whether or not this specific proposal is implemented in its current form, the direction of policy is becoming clearer. For internationally mobile individuals, the question is no longer theoretical but practical: where can one find a stable balance between taxation, lifestyle, and long-term certainty?
For some, the answer may lie beyond traditional expat destinations and, increasingly, outside the European Union altogether.
Frequently Asked Questions
1. How could rising taxes in Europe impact retirees considering Turkey?
As taxation on capital and income rises across parts of Europe, some retirees and investors begin to look for alternatives where their assets are treated more favorably. Turkey does not tax unrealized capital gains, and its overall tax structure can be more predictable for those living on foreign income.
2. Is Turkey becoming a popular alternative to EU retirement destinations?
Yes, particularly among those who are looking beyond traditional EU options. While it is not always featured on mainstream retirement lists, Turkey is increasingly being considered by retirees who prioritize cost of living, lifestyle, and flexibility over EU-based systems.
3. Where do most expats choose to live in Turkey?
Popular areas include Bodrum, Antalya, and Fethiye along the Mediterranean and Aegean coasts. These locations offer a combination of sea views, established expat communities, modern infrastructure, and a relaxed lifestyle that appeals to retirees.
4. Why is Bodrum often recommended for retirees?
Bodrum is one of the most well-known lifestyle destinations in Turkey. It offers a mix of traditional charm and modern living, excellent restaurants, international access, and a strong expat presence. Areas such as Yalikavak are particularly popular for their marina lifestyle and high-quality homes.
5. Does Turkey offer tax advantages compared to EU countries?
Turkey does not tax unrealized capital gains and generally has lower personal tax rates than many Western European countries. In addition, double taxation treaties help ensure that income is not taxed twice for many foreign residents.
6. Is it easy to obtain residency or citizenship in Turkey?
7. What kind of lifestyle can retirees expect in coastal Turkey?
Retirees can expect a Mediterranean lifestyle with long summers, mild winters, fresh food, and a strong sense of community. Coastal towns offer a slower pace of life while still providing access to modern amenities, healthcare, and international travel connections.
8. Is Turkey a stable place to live long term?
Turkey offers a combination of economic activity, infrastructure, and strategic global positioning that supports long-term relevance. While every country has its own dynamics, many retirees find Turkey to offer a balance of lifestyle, affordability, and day-to-day stability.
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From his villa overlooking the Aegean Sea, Randal writes about retirement in Turkey, including its Citizenship by Investment Program. Might he return to the United States? He responds emphatically: "Bodrum is home now.”
