Hello everyone,
Considering the new Belgian law under which capital gains on financial assets are taxed at 10%, with an exemption for the first €10,000 of realized gains per year, I performed a simplified comparison of two investment strategies.
The comparison assumes:
- An initial investment of €400,000 in January 2026 (when the law enters into force)
- Investment into a broad ETF such as IWDA
- Annual average growth of 8%
- No additional contributions, for simplicity
- A total investment horizon of 13 years (January 2026 to December 2038)
Strategy 1:
Do nothing during the accumulation phase and sell the entire position in December 2038.
Strategy 2:
Each year, sell enough shares to realize €10,000 of capital gain, making full use of the annual exemption, and immediately repurchase the sold shares.
Results:
- Strategy 1 (after taxes): €1,018,759
- Strategy 2 (after taxes): €1,026,261
- Difference in favor of Strategy 2: €7,502
Beyond the discussion of whether Strategy 2 is worth the additional operational effort for a ~€7.5k gain (which would increase with higher returns), I would appreciate a review of whether my assumptions and calculations are approximately correct.
What do you guys think?