Box 3 Mortgage in the Netherlands: Tax Rules, Rates and Second Homes in 2026

Buying a second home, investing in a rental property or taking out an additional mortgage in the Netherlands can have important tax consequences. One of the first questions to answer is whether your property and mortgage fall under Box 1 or Box 3 of the Dutch income tax system.

In 2026, Box 3 taxes income from savings and investments, including privately owned second homes and investment properties. A mortgage can reduce the amount of wealth considered for Box 3 taxation, but the rules are different from the familiar Dutch mortgage interest deduction.

For expats, the situation can be more complicated. You might own property abroad, receive the 30% ruling, have an interest-only mortgage, or want to rent out your Dutch home when relocating.

This guide explains when a mortgage belongs in Box 3, how Box 3 taxation works in 2026, what happens to your mortgage interest, and which issues to check before buying or refinancing property.

What Is Box 3 in the Netherlands?

The Netherlands divides taxable income into three categories, known as boxes.

• Box 1: Income from employment, business activities and qualifying owner-occupied homes.

• Box 2: Income from a substantial interest in a company, generally involving an ownership interest of at least 5%.

• Box 3: Income from savings, investments and other privately held assets, including second homes.

Box 3 is commonly described as the Dutch wealth tax or vermogensrendementsheffing. Technically, it is income tax on a calculated return from assets and liabilities rather than a straightforward percentage of your total wealth.

If you own a home in which you live permanently, the property normally falls under Box 1. If you purchase a second home, holiday property or privately held rental property, it generally belongs in Box 3.

The difference matters because Box 1 and Box 3 use different rules for mortgage debt and taxation.

When Does a Mortgage Fall Under Box 3?

A mortgage can belong in Box 3 when the borrowed money does not qualify as deductible owner-occupied home debt under the Box 1 rules.

Common examples include:

One important distinction is that the property and mortgage are assessed separately.

You can own a main residence that falls under Box 1 while part of the borrowing secured against that property belongs in Box 3.

For example, suppose you increase your mortgage by €50,000 and use the money to buy a car. The additional loan is generally not qualifying owner-occupied home debt. The €50,000 debt can therefore belong in Box 3 even though your home remains in Box 1.

The purpose of the borrowing matters more than the fact that the loan is secured against your home.

Box 1 vs Box 3: What Is the Difference for Your Mortgage?

The main difference concerns mortgage interest deductibility and how your property is taxed.

For new qualifying owner-occupied mortgage debt created from 1 January 2013, mortgage interest deduction generally requires repayment within 30 years, at least according to an annuity repayment schedule. Linear repayment also qualifies.

Different rules can apply to qualifying existing mortgage debt originating before 2013.

Read our complete guide to Box 1 in the Netherlands for more information about income tax, mortgage interest deduction and homeownership.

Box 3 Tax Rates and Exemptions in 2026

The Dutch Tax Administration uses different notional return percentages for bank savings, investments and other assets, and deductible debts.

For 2026, the following figures apply to the provisional assessment.

The 6.00% return for investments and other assets has been fixed for 2026. The savings and debt return percentages are provisional and will be finalised later.

Important: The 36% Box 3 tax rate does not mean you pay 36% of your property’s value or equity. It applies to calculated taxable income from savings and investments.

The tax-free wealth allowance also does not mean every individual asset below €59,357 is exempt. Your relevant assets and debts are assessed together.

You can check the official figures on the Dutch Tax Administration’s 2026 Box 3 calculation page.

How to Calculate Box 3 Tax on a Second Home

Consider an example involving a second property in the Netherlands.

You are a single taxpayer, and the following amounts apply on 1 January 2026:

• Second home’s Box 3 value: €300,000

• Outstanding mortgage: €200,000

• Bank savings: €20,000

• No other Box 3 assets or debts

The example assumes the property is valued at €300,000 for Box 3 purposes, without any applicable adjustment for protected tenancy.

Step 1: Calculate deductible debt

First, subtract the €3,800 debt threshold.

€200,000 – €3,800 = €196,200

This is the debt used in the notional-return calculation.

Step 2: Calculate the net asset base

Add the property value and savings, then subtract deductible debt.

€300,000 + €20,000 – €196,200 = €123,800

Step 3: Apply the tax-free allowance

Subtract the 2026 allowance of €59,357.

€123,800 – €59,357 = €64,443

Step 4: Calculate the notional return

Step 5: Apply the taxable share

The taxable share of the net asset base is:

€64,443 ÷ €123,800 = approximately 52.054%

Multiply the total notional return by this percentage.

€12,958.60 × 52.054% = approximately €6,745.47 in taxable Box 3 income.

Step 6: Calculate the estimated tax

€6,745.47 × 36% = approximately €2,428 in Box 3 tax for 2026.

This example shows why simply calculating 36% of a property’s equity produces the wrong answer.

It is an illustrative calculation, not a personal tax assessment. Your actual liability can differ because of other assets, debts, fiscal partnership, international tax relief or the actual-return rules explained below.

Can You Deduct Mortgage Interest in Box 3?

This is one of the most important distinctions between Box 1 and Box 3.

Interest on a Box 3 mortgage is not deductible from employment income under the Box 1 mortgage interest deduction.

However, this does not mean mortgage debt has no tax effect.

Under the notional-return system, qualifying Box 3 debt reduces the net asset base after the debt threshold. A separate notional percentage is also applied to deductible debt in calculating the return.

This can reduce Box 3 tax, depending on your overall wealth position.

Under the alternative calculation using your actual return, interest paid on qualifying Box 3 debt can be deducted when determining that actual return.

These are two different calculations. You cannot simply subtract the mortgage interest you paid from your Box 1 taxable salary.

For a detailed explanation of the ordinary mortgage deduction, read our guide to mortgage interest deduction in the Netherlands.

Box 3 and a Second Home in the Netherlands

A second home generally belongs in Box 3 when it is not your main residence.

Examples include:

• An apartment used during weekends.

• A holiday home near the Dutch coast.

• A property purchased for future personal use.

• A home you retain after moving elsewhere.

• A privately owned investment property.

For a Dutch second home, the Box 3 value generally follows the relevant WOZ assessment.

For the 2026 tax year, you normally use the WOZ value with a valuation reference date of 1 January 2025, as shown on the assessment issued in 2026.

The WOZ value is not necessarily the price you paid or the amount a buyer would offer today.

If the property has a qualifying protected tenancy, special valuation rules can apply. These should be reviewed before you calculate your tax.

Buying a second home in 2026: transfer tax

Box 3 income tax is not the only tax to consider when purchasing a second home.

In 2026, the Dutch transfer tax rate for an existing residential property that will not be your main residence is generally 8%.

For a property purchased for €300,000, that amounts to €24,000 in transfer tax alone.

This cost is separate from annual Box 3 taxation, notary fees, valuation costs and mortgage expenses.

The usual owner-occupier transfer tax rate of 2% and the first-time buyer exemption do not generally apply to a property bought solely as a second home or investment.

Box 3 and Rental Property in the Netherlands

A privately held rental property normally belongs in Box 3 when the rental activity is considered ordinary private wealth management.

The property’s value is included among your assets, while eligible mortgage debt is included among your Box 3 debts.

Under the notional-return calculation, you do not simply add the actual annual rent you receive to your taxable income. The calculation instead uses the applicable asset and debt return percentages.

However, actual rental income matters when calculating your actual return under the counter-evidence rules.

There are also exceptions where property activities go beyond ordinary private wealth management and may be taxed differently.

What is the leegwaarderatio?

The leegwaarderatio is a valuation adjustment that may apply to certain rented homes.

Where the statutory conditions are satisfied, the Box 3 property value can be calculated as a percentage of the WOZ value, depending on the annual rental income relative to that value.

For 2026, the percentage can range from 73% to 100% under the applicable table.

It is not a general discount for every rental property. Since 2023, temporarily rented homes have not qualified for this adjustment, and further restrictions apply.

The official leegwaarderatio table explains the percentages.

Can you rent out a property with a normal Dutch mortgage?

Not automatically.

A standard owner-occupied mortgage generally contains restrictions on renting out the property. You often need the lender’s written permission or a suitable rental mortgage.

If you are considering purchasing a property to rent out, read our guide to buy-to-let mortgages in the Netherlands.

It explains how rental mortgages differ from ordinary residential financing and why buyers often need substantial savings.

What Happens When Your Home Moves From Box 1 to Box 3?

A home can move from Box 1 to Box 3 when it no longer qualifies under the owner-occupied home rules.

However, the change does not automatically happen whenever you spend time living elsewhere.

You move to another home

If you buy a new main residence and put your previous home up for sale, the previous property may remain under the Box 1 rules temporarily.

Special conditions apply, including whether the home is empty, genuinely offered for sale and within the permitted period.

If you instead retain the property permanently as a second home or rental property, its tax treatment may change.

You rent out your former main residence

Renting out a former home can affect both its tax classification and your mortgage contract.

A qualifying former home that was still covered by the temporary Box 1 rules may move to Box 3 during a rental period.

Before renting, check:

1. Whether the lender permits it.

2. Whether the property remains eligible for Box 1.

3. Whether the existing mortgage structure is still suitable.

4. Whether the rental income and property value create additional tax consequences.
   
   

You separate or divorce

If one partner moves out while remaining an owner, special rules can temporarily preserve Box 1 treatment.

The precise consequences depend on the separation date, ownership, financial arrangements and who continues living in the property.

Do not assume that moving out immediately eliminates the mortgage interest deduction or automatically places the entire home in Box 3.

Interest-Only Mortgages and Box 3

An interest-only mortgage, known in Dutch as an aflossingsvrije hypotheek, does not automatically belong in Box 3.

The original borrowing date and tax history matter.

A qualifying interest-only mortgage originating before 2013 can remain eligible for Box 1 mortgage interest deduction under transitional rules.

A completely new interest-only mortgage taken out today generally does not satisfy the repayment conditions for new deductible owner-occupied home debt. The non-qualifying debt will therefore generally fall under Box 3.

This can create situations where different parts of the same mortgage have different tax treatments.

If you are refinancing or extending an existing mortgage, check the original loan portions before changing the structure.

What If Your Actual Box 3 Return Is Lower?

The Netherlands currently uses a transitional Box 3 tax system.

Following Dutch Supreme Court rulings, taxpayers can use the actual-return rules when their actual return is lower than the calculated notional return.

Your actual return is determined across your relevant Box 3 assets and debts, rather than by selecting only one poorly performing investment.

It can include:

• Savings interest.

• Dividends and investment income.

• Rental income.

• Changes in the value of investments or properties.

• Interest paid on qualifying Box 3 debts.

For the actual-return calculation, the ordinary tax-free wealth allowance does not apply. Most investment and property expenses, including routine maintenance, cannot be deducted, although specific exceptions exist.

A special rule for holiday homes in 2026

From 2026, personal use of a second property can also contribute to the actual-return calculation.

For example, the Tax Administration allows a calculation based on the property’s economic rental value or an alternative fixed percentage of 5.06% of the relevant WOZ value, adjusted for the number of days the property was available for personal use.

Days when the property was rented out are treated differently.

This rule is particularly relevant if you own a holiday home and believe your actual return was lower than the notional return.

You can read the complete explanation on the Dutch Tax Administration’s actual-return page.

Box 3 for Expats and the 30% Ruling

If you live in the Netherlands and own property or investments abroad, your Box 3 position requires particular attention.

Dutch tax residents generally need to consider their worldwide Box 3 assets and debts, subject to applicable exemptions, double-taxation relief and special rules.

For example, you might have:

• Savings in a bank account outside the Netherlands.

• An apartment you own in your country of origin.

• Investments held through a foreign brokerage account.

• Mortgage debt on property outside the Netherlands.

The fact that an asset is located abroad does not automatically exclude it from a Dutch tax return.

Does the 30% ruling exempt foreign assets from Box 3?

Not automatically.

The rules for partial non-resident tax status changed from 1 January 2025.

New applicants can no longer elect this status merely because they qualify for the 30% ruling.

However, transitional protection remains important. Individuals who were already using the expat arrangement before 2024 may still qualify to elect partial non-resident taxation through the 2026 tax year.

Under this special status, the scope of taxable Box 3 assets can be more limited.

If you have the 30% ruling, the starting date and your eligibility for transitional treatment should be checked before determining which foreign assets must be declared.

What if you live outside the Netherlands?

Non-residents may still have Dutch Box 3 obligations for certain assets, particularly Dutch real estate.

The treatment can depend on your residence, property ownership and the relevant tax treaty.

When a mortgage involves income or property across multiple countries, it is sensible to have the Dutch mortgage position and international tax position reviewed together.

Is a Box 3 Mortgage a Good Idea?

A Box 3 mortgage is not inherently better or worse than a Box 1 mortgage. It usually serves a different purpose.

For a second home or investment property, the important questions include:

• How much of the purchase can a lender finance?

• How much of your own money will you need?

• What will the monthly mortgage payments be?

• How much transfer tax and other purchase costs will you pay?

• What are the expected annual property expenses?

• How might Box 3 taxation affect your financial position?

• Are you allowed to rent out the property?

• What happens if the property is vacant or its value falls?

You should also distinguish a Box 3 mortgage from a beleggingshypotheek.

A beleggingshypotheek is an investment-linked mortgage structure, often involving investments intended to repay the debt. Its tax treatment depends on the loan and investment product, and it does not automatically belong in Box 3.

Read more about investment mortgages in the Netherlands.

Get Independent Mortgage Advice in the Netherlands

Are you buying a second home, considering a rental property, refinancing your mortgage or wondering whether part of your mortgage belongs in Box 3?

Expat Mortgage Platform helps internationals understand their Dutch mortgage options and compare financing solutions.

We can help you examine your borrowing capacity, the purpose of your mortgage, the lender’s conditions and how different mortgage structures may affect your plans.

For complex tax questions, particularly those involving international assets or the 30% ruling, a qualified tax adviser should confirm the tax consequences.

Schedule your free mortgage consultation

Your first consultation is free and non-binding.

Frequently Asked Questions About Box 3 Mortgages

Is a mortgage in Box 1 or Box 3?

A qualifying mortgage used for your main residence generally belongs in Box 1. A mortgage for a second home or private investment property generally belongs in Box 3. Different loan portions can be treated separately.

What is the Box 3 tax rate in the Netherlands in 2026?

The Box 3 income tax rate is 36% in 2026. This applies to calculated taxable income from savings and investments, not directly to the full value of your assets.

How much wealth is tax-free in Box 3 in 2026?

The tax-free allowance under the notional-return system is €59,357 for an individual or €118,714 for fiscal partners together.

Is mortgage interest deductible in Box 3?

Box 3 mortgage interest is not deductible from employment income under the Box 1 mortgage interest deduction. Qualifying Box 3 debt can reduce the notional-return calculation, and interest on that debt can be relevant when calculating actual Box 3 returns.

Is a second home always in Box 3?

A privately held second home normally belongs in Box 3, but special situations can apply, including temporary ownership of two homes during a move.

Does a rental property fall in Box 3?

Ordinary privately held rental property generally belongs in Box 3. More extensive property activities may be treated differently.

Do I pay Box 3 tax on rental income?

Under the notional-return calculation, rent is not taxed separately in the same way as employment income. However, rental income is included when calculating actual returns under the counter-evidence rules.

Is an interest-only mortgage a Box 3 mortgage?

Not necessarily. Qualifying interest-only mortgage debt originating before 2013 can retain Box 1 treatment. New non-qualifying interest-only debt will generally belong in Box 3.

Can I have both a Box 1 and Box 3 mortgage?

Yes. Different portions of your borrowing can belong in different tax boxes depending on their purpose and whether they satisfy the applicable conditions.

Does the 30% ruling mean I do not pay Box 3 tax?

No. The 30% ruling does not automatically eliminate Box 3 tax. Transitional partial non-resident rules can still apply to certain eligible individuals through 2026.

Is a Box 3 mortgage cheaper than a normal mortgage?

Not necessarily. Interest rates, deposit requirements and lender conditions depend on the property, loan purpose and borrower’s situation. Tax classification alone does not determine the mortgage cost.

Will Box 3 rules change in 2028?

The Dutch government aims to introduce a new system based more directly on actual investment returns from 1 January 2028. The legislation and details remain subject to the political and legislative process.

For a financing decision, use the rules currently in force and evaluate potential changes separately.

Official Sources

For further information about Dutch property taxation and mortgage-related rules:

• Dutch Tax Administration: Box 3 calculation for 2026

• Dutch Tax Administration: Actual Box 3 returns

• Dutch Tax Administration: Partial non-resident tax status

• Dutch Tax Administration: Transfer tax rates

• Dutch Government: Proposed Box 3 reforms

Last updated: 29 October 2026. This page provides general information about Dutch mortgage and tax rules. Individual tax outcomes depend on personal circumstances and applicable legislation.