Yes, your Spanish property counts toward Box 3, the Dutch tax on wealth. But you usually pay far less Dutch tax on it than you expect, because a tax treaty between the Netherlands and Spain prevents double taxation. The part almost every guide misses: how you finance the Spanish home, with a Spanish mortgage or with the overwaarde on your Dutch home, changes your Box 3 bill more than most buyers realise. This is the gap where tax advisers and mortgage brokers talk past each other. Below is how it works, with the 2025 and 2026 figures, and what the shift to actual-return taxation in 2028 means for you.
Quick answer (read on for the detail):
- Your Spanish home sits in Box 3 under “other assets” (overige bezittingen), with a high deemed return (5.88%* in 2025, 6.00%* in 2026), taxed at 36%*.
- The Netherlands-Spain tax treaty grants relief from double taxation, so in practice you pay little to nothing in the Netherlands on the value of that home.
- Box 3 does not tax the unrealised gain on your property.* The deemed return is a separate concept, and the future capital gain is taxed only when you sell.*
- A Spanish mortgage debt is deductible from your Box 3 base.* The interest on Dutch overwaarde you draw for a Spanish property is not deductible in the Netherlands.* That difference is larger than it looks.
- In Spain you also pay IBI (local property tax) and possibly IRNR (non-resident income tax, 19%* for EU residents). These sit outside Box 3.
How does a Spanish second home count toward Box 3?
A Spanish second home is part of your Box 3 wealth, exactly as a Dutch second home would be. Box 3 is the Dutch income tax category that levies a tax on your net assets, not on the income they actually produce. The Dutch tax authority assigns it to the category “other assets” (overige bezittingen), and that label matters, because each bucket in Box 3 carries its own deemed-return percentage, and the one for other assets is much higher than the one for savings.
A quick definition before going further. The deemed return (fictief rendement) is the percentage the Dutch tax authority assumes your assets earn each year, whether or not they actually earn it. You pay Box 3 tax on that assumed return, not on real income. For 2025 the Belastingdienst applies:
- Bank savings: 1.37%*
- Other assets (including real estate): 5.88%*
- Debts: 2.70%* (this is a negative return, so it reduces your Box 3 income)
The Box 3 tax rate is 36%*. The tax-free allowance (heffingsvrij vermogen) is €57,684* per person in 2025, so €115,368* with a fiscal partner.
Rule of thumb: in 2025 the effective Box 3 burden on other assets is roughly 5.88%* × 36%* = about 2.12%* of the value that falls into Box 3. For 2026 the deemed return on other assets rises to 6.00%* and the tax-free allowance is €59,357* (single filer), which moves the rule of thumb to 6.00%* × 36%* = about 2.16%*.
One nuance for a property abroad: Spain has no WOZ valuation system like the Netherlands. For your Dutch return you therefore use the market value (waarde in het economisch verkeer), the price the property would fetch on sale. A local Spanish appraisal helps you substantiate that value.
| Year | Deemed return “other assets” | Box 3 rate | Effective burden (rule of thumb) |
|---|---|---|---|
| 2025 | 5.88%* | 36%* | about 2.12%* |
| 2026 | 6.00%* | 36%* | about 2.16%* |
| 2027 | transitional regime (counter-proof rule)* | 36%* | situation-dependent |
| 2028 | actual return (planned)* | new system | rent received plus gain on sale* |
The 2026 deemed returns for bank savings and debts are still provisional (final in early 2027). The exact start date of the new system reflects current planning and can change. Always confirm the current figures with the Belastingdienst.
Which financing route works out best for your Box 3 depends on your numbers. Once you have identified a specific property, the Upscore Finance Passport models your situation and shows what a Spanish mortgage would mean for your Box 3 base.
Do I pay tax in two countries? The Netherlands-Spain tax treaty
No. Your Spanish home counts toward your Box 3 wealth, but that does not mean you pay the full Dutch tax on top of the Spanish tax. The Netherlands and Spain have a tax treaty designed to stop you being taxed twice on the same asset. (For the Spanish-side framework, see the Spanish Tax Agency.)
Here is how the relief works in practice:
- Step 1, your Dutch return. You declare the value of the Spanish home in your Box 3 filing, under other assets.
- Step 2, double-taxation relief. Spain has the right to tax real estate located on Spanish soil. Because Spain holds that taxing right, the Netherlands grants you a reduction on the Box 3 tax due. This is the relief to avoid double taxation (aftrek ter voorkoming van dubbele belasting), and it means you effectively pay little to no Dutch tax on the value of your Spanish home.
The relief calculation is genuinely complex, and it can land differently under the new rules than you are used to. For most owners the core is simple: the home counts toward the size of your wealth, but the treaty pulls the Spanish portion back out again.
Does Box 3 tax the increase in value of my Spanish home?
No, not annually. This is a common misconception worth getting right. The deemed return of 5.88%* (or 6.00%* in 2026) is not a tax on the rising value of your home. It is an assumption the tax authority makes about what your wealth earns on average, regardless of whether it does. That mismatch is exactly why the Dutch Supreme Court (Hoge Raad) ruled the system unreasonable.
What changes next? From 2028, on current planning, Box 3 moves to actual return (werkelijk rendement).* Real estate gets an important exception to the annual levy: the gain in your home’s value is taxed only when you sell, through a capital-gains tax, not year after year on paper.* You do not pay each year on a gain you have not yet realised. The rent you actually receive is your direct return, and costs such as interest on a Box 3 mortgage, maintenance and management become deductible.*
Note: through 2027 the transitional regime with the counter-proof rule (tegenbewijsregeling) still applies.* In those years, costs other than interest are not deductible.* If you can prove your actual return is lower than the deemed return, you may use the counter-proof rule, though no tax-free allowance applies in that case.*
How does financing your Spanish home change your Box 3 bill?
Here is the difference most articles skip. A tax adviser explains Box 3 and stops there; a mortgage broker arranges your financing and never touches Box 3. The two are directly connected, and the choice you make at the financing stage works through your tax for years.
You can broadly finance a Spanish second home two ways:
- With a Spanish mortgage, taken out with a Spanish bank against the property itself.
- With the overwaarde on your Dutch home, by increasing your Dutch mortgage. Overwaarde is the built-up equity in your Dutch home, the difference between its market value and the mortgage still owed on it.
For Box 3, that difference is not neutral.
Route 1, a Spanish mortgage. A debt tied directly to the Spanish property counts as a Box 3 debt and lowers your Box 3 base.* The debt falls into the debts bucket (2.70%* deemed return in 2025) and so removes part of the high return on other assets. At the same time, that debt runs with the treaty relief for the Spanish portion. A Spanish lender typically finances up to 70% of the value for a non-resident, in line with Bank of Spain supervisory guidance, and prices the loan off the Euribor rate plus a non-resident spread, so the size of that deductible Box 3 debt is capped by what the Spanish bank will lend.
Route 2, overwaarde from the Netherlands. If you take extra mortgage on your Dutch home to pay for Spain, that debt sits in the Netherlands. The interest on that draw is not deductible in the Netherlands,* because the loan is not for your own primary home but for a second property. You get no mortgage-interest deduction in Box 1,* and the debt lands in Box 3.* For your pocket, this means the “cheap” overwaarde can work out more expensive in tax terms than it first appears.
| Spanish mortgage | Overwaarde from the Netherlands | |
|---|---|---|
| Where the debt sits | Box 3 (tied to the Spanish home)* | Box 3 (not a Box 1 primary-home debt)* |
| Interest deduction | No Box 1 deduction; debt lowers the Box 3 base* | No Box 1 deduction; interest not deductible* |
| Effect on Box 3 base | Lowers the base (debt deemed return)* | Lowers the base (debt deemed return)* |
| Watch out for | Spanish bank, its own terms and timeline | Higher Dutch monthly payment; possibly less room for a Spanish mortgage |
In practice we see at Upscore that Dutch applicants come in with relatively more of their own capital, often from overwaarde, and request a mortgage of around 70% of the property value (Upscore data from Dutch applicants; median, no figures on completed deals). It is exactly those profiles for which it pays to run the numbers in advance: paying for everything with overwaarde forgoes the Box 3 debt deduction a Spanish mortgage does give you, and loses the deduction on that drawn interest in the Netherlands.
Note: if you choose overwaarde, you may then have less room to take out a Spanish mortgage as well. Your higher Dutch monthly payment counts in the Spanish bank’s assessment. The two routes do not automatically exclude each other, but they do not always reinforce each other either.
Most Dutch buyers underestimate the Box 3 effect of paying with overwaarde. Model your monthly payment and financing room first, then compare it against a Spanish mortgage.
What do you pay in Spain itself? IBI and IRNR
Box 3 is the Dutch side of the story. In Spain you also pay your own local taxes, separate from Box 3:
- IBI (Impuesto sobre Bienes Inmuebles) is the annual municipal property tax, comparable to the Dutch OZB.
- IRNR (Impuesto sobre la Renta de no Residentes) is the non-resident income tax. If you do not rent the property out, Spain charges a deemed income on it; if you do rent it out, you pay on the rental income (typically 19%* for EU residents).
These Spanish charges feed into the treaty logic, but they do not come off your Box 3 filing as a deductible cost; they run through the Spanish system. Budget them separately in your total annual cost. Our guide to Spanish property tax for foreign owners breaks each one down.
What if you rent out the Spanish property?
If you mainly use the property yourself as a holiday home, that is treated differently from long-term letting. With long-term letting the leegwaarderatio (vacant-value ratio) can apply, which often lowers the value counted in Box 3. The leegwaarderatio is a Dutch valuation discount applied to let property, reducing the taxable value below the open-market figure. With short-term holiday letting it usually does not apply.
If you mainly use the property yourself, something changes from 2026.* Through 2025, the counter-proof rule did not require you to factor in a deemed rental value for your own use.* From 2026, that benefit must be included when you submit counter-proof.* This makes counter-proof less often favourable for self-used holiday homes than before.
What changes in 2027 and 2028?
The move to actual-return taxation has been postponed several times. On current planning, the new system takes effect in 2028, with 2027 as the last transitional year under the counter-proof rule. The figures and dates are still politically in motion, so confirm the current position with the Belastingdienst before you make decisions.
What does hold as a through-line: the tax burden on a second home has risen in recent years,* because the deemed return on other assets has been stepped up year by year.* That rising “Box 3 effect” has become a reason for many Dutch buyers to structure a Spanish purchase well and do it now, rather than postpone it.
The bottom line for Dutch buyers
A Spanish second home is taxed more lightly in Box 3 than the high deemed return on other assets suggests, thanks to the Netherlands-Spain treaty. But the real saving sits in the combination most advisers look at separately: how you finance the home partly determines how much Box 3 you pay. A Spanish mortgage produces a deductible Box 3 debt;* paying with Dutch overwaarde does not,* and on top of that you lose the interest deduction there.* Run both routes before you choose. With the right structure and timely planning there is often a lot to save here, and you do not need to postpone your Spanish purchase because of Box 3.
Once you have a specific property in mind, get your Finance Passport: it models which financing route is most efficient for your Box 3, which Spanish banks fit your profile, and your true cash requirement, before you commit.
Frequently asked questions
Does my home in Spain count toward Box 3, even if I do not rent it out? Yes. The home falls under other assets and is taxed on the deemed return, even if you receive no rent.* The tax treaty, through the relief to avoid double taxation, means you effectively pay little to nothing in the Netherlands on that value.*
Do I pay Box 3 on the increase in value of my Spanish home? No, not annually. The current deemed return is an assumption, not a levy on your actual capital gain.* From 2028 (planned), the gain on real estate is taxed only when you sell, not year by year.*
Is the interest on my Spanish mortgage deductible? Not in Box 1, because it is not your primary home.* The Spanish mortgage debt does count as a Box 3 debt and lowers your Box 3 base.*
Can I use the overwaarde on my Dutch home and deduct the interest? You can use the overwaarde, but the interest on that draw for a property in Spain is not deductible in the Netherlands.* Count that cost fully in your comparison against a Spanish mortgage.
Which value do I use for my Spanish home in the return? The market value (waarde in het economisch verkeer). Because Spain has no WOZ, a local appraisal helps to substantiate it.
What is the effective Box 3 burden on a Spanish home? About 2.12%* of the value in 2025 (5.88%* deemed return at 36%*), rising to about 2.16%* in 2026 (6.00%* at 36%*), before the treaty relief reduces what you pay in the Netherlands.
Related reading
This is one piece of the wider picture for Dutch buyers. Start with our pillar, buying property in Spain with a mortgage for Dutch citizens, which covers eligibility, deposit and bank choice. The sister piece on using your Dutch home equity (overwaarde) to buy in Spain covers the equity-release mechanics referenced above. For the Spanish-side bill, see Spanish property tax for expats. To run your own numbers, use the Spain property cost calculator and the mortgage calculator.
* For informational purposes only. This is not tax advice. Please consult your tax adviser.
