Parliament has blocked the caretaker cabinet’s plan to raise €2.55 billion in extra Box 3 wealth tax over the next two years, after concerns that the measure is driving private landlords to sell off large numbers of rental homes.

The plan, part of the government’s 2026 tax package, would have increased the assumed return on assets in Box 3 by 1.78 percentage point to 7.8%.

Private property investors in particular say the proposal is unfair because they cannot write off costs and have to pay tax based on a fictitious gain that has not yet been realised.

Instead MPs agreed to phase out a tax deduction for home owners with little or no mortgage debt by 2041 rather than 2048.

The measures were backed by GroenLinks-PvdA and far right parties JA21, BBB, Forum and the PVV. The VVD, D66, CDA and 50Plus voted against.

ChristenUnie MP Pieter Grinwis, who steered the changes through parliament, told the Financieele Dagblad in an interview that the government’s plans were “truly unjust”.

“The Supreme Court twice reprimanded the government for levying tax in Box 3 wrongly… and how were we planning to solve it? Passing them the bill,” he said.

The Supreme Court ruled in 2021 that the system contravened EU legislation and ordered the government to rethink. A revised system was also thrown out by the courts in June 2024.

“But I am also concerned about housing,” he said. “Many private landlords hold their rental properties in Box 3. If I want to avoid the sell-off wave of rental properties becoming even worse than it already is, then this was the moment to act.”

On Thursday, MPs also voted in favour of Grinwis’ proposal to increase the price of fuel slightly next year and use the extra cash to invest in public transport.