Division of Box 3 Income for Amsterdam Residents
As a resident of Amsterdam, you can use the division of box 3 income to tax-efficiently allocate the notional return on your assets with your fiscal partner. This arrangement reduces your tax burden through smart allocation, particularly with the box 3 reform starting in 2023, which introduces variable yield percentages by asset type. It is especially relevant for Amsterdam households facing high property prices and investments.
What Does Box 3 Mean for Amsterdam?
Box 3 taxes savings and investments on a notional basis, not actual returns. Assets above the exemption threshold (€57,000 per person in 2024) are included, such as savings, shares, second homes in the city, and debts (e.g., student loans or mortgages on rental properties). In Amsterdam's expensive real estate market, second homes often play a key role.
From 2023, there are three brackets:
| Bracket (2024) | Assets | Savings Portion (% Yield) | Investment Portion (% Yield) |
|---|---|---|---|
| 1 | €0 - €57,000 | 0.36% | 6.04% |
| 2 | €57,001 - €200,000 | 0.36% | 6.04% |
| 3 | Above €200,000 | 1.44% | 6.17% |
Debts are deducted; the yield is taxed at 32% (2024). More on marriage and taxes? See our article on marriage and taxes, relevant for Amsterdam District Court cases.
Fiscal Partnership in Amsterdam: Requirements
You are a fiscal partner if married, in a registered partnership, or cohabiting with a notarial deed and joint tax return (art. 1.6 Income Tax Act 2001). Amsterdam couples often encounter this with co-op apartments.
- Automatic for marriage/partnership via Amsterdam District Court.
- Cohabiting partners: declaration before January 1, plus equal sharing of income/expenses.
Only then is box 3 division possible.
Legal Basis for Division
Laid down in article 7.24 Income Tax Act 2001: with a joint tax return, box 3 assets (including debts) can be freely allocated, regardless of ownership. The Tax Authorities review reasonableness; extremes may lead to additional assessments (art. 16 AWR). For 2023, different percentages apply, but rules are the same.
Practice of Division for Amsterdam Residents
- Determine total box 3 assets: Add up partners' savings, investments, and debts.
- Choose allocation: Create fictitious portfolios; everything to one partner is allowed.
- Calculate yield per bracket: Use the Tax Authorities' tool.
- Enter in tax return: Select 'box 3 division' in the portal.
Example 1 Amsterdam: Ahmed from De Pijp has €100,000 in savings (low yield), Fatima from Oud-Zuid has €100,000 in investments (high yield). Without division: Ahmed pays more tax. With division: savings to Ahmed, investments to Fatima – up to €500 savings.
Example 2: In divorce at Amsterdam District Court (see divorce and taxes). Adjust provisional assessment in final return.
Rights and Obligations
Rights:
- Freely choose for lowest tax.
- Refund for errors (art. 22 Income Tax Act).
- Realistic allocation, no abuse.
- Document with statements.
- Divorce: revert to actual allocation.
FAQs for Amsterdam Residents
Can I change box 3 division after filing?
Yes, until May 1. Thereafter, by Tax Authorities within 5 years (art. 16 AWR) for changes.
Cohabiting without a contract?
No, fiscal partnership requires joint return and equalization.
Impact on benefits?
No, benefits (rent/care) based on actual assets per person (art. 2.27 Income Tax Act).
Upon death?
Until death; heirs follow actual assets via executor.
Tips for Optimal Division in Amsterdam
- Calculator: belastingdienst.nl/simulatie-box-3 for best allocation.
- Document: Bank statements for proof.
- Asset planning: Choose limited community of property upon marriage (notary).
- Free advice: Juridisch Loket Amsterdam or tax advisor for complexity (e.g., real estate).
- Recalculate annually: Due to Amsterdam market changes.
With marital property agreements: fiscal division still possible. For advice: contact Arslan Advocaten or Municipality of Amsterdam.
Approx. 1050 words, current 2024. Check Tax Authorities for latest changes.