Green investing: Tax benefits of sustainable investing

People are becoming more aware of their living environment. Nowadays there are no longer only organic and green foods, but also sustainable jeans, furniture, care products and even houses. Financial products are not lagging behind and so-called sustainable investments are increasingly being chosen. Green investment products are responsible but also have tax benefits, which make it very attractive for consumers to choose green investing!

What is sustainable investing or green investing?

When you choose a green investment , you choose to invest in environmentally friendly or otherwise conscious products or projects. For example, instead of investing in a bank, you invest your money in a project that ensures that the climate is treated more consciously. Or instead of investing in gold, you choose to develop products that do not harm the environment. You can think of investments in wind energy, sustainable agriculture or eco-houses. But projects that ensure nature conservation in the Netherlands or elsewhere in the world are also high on the agenda. By investing in green funds, you as a private individual actually lend money to financial institutions, which can then provide money to selected green causes at a favorable rate. So you indirectly support sectors that could use a helping hand and deserve it. You combine investing in charities with making your own profit and building up capital.

Can you earn as much with green investments as with normal investments?

With a sustainable investment you can be sure that 70% of the money goes to selected and government-approved green and/or organic goals. Green investments, like other investments, must also provide a return for the investor. However, return is not the main goal of the project or product. As a result, the returns from green investing may be slightly lower than from regular investments. To ensure that consumers do opt for sustainable investing, a solution has been devised: The government has ensured that sustainable investing is fiscally very attractive for consumers.

Tax benefits of sustainable investments: What are the tax benefits of investing in green funds?

To encourage green investing, there is an exemption from the so-called wealth tax. In addition, a tax credit is given. For investments up to half a hundred thousand, this means that no less than 2.5% extra return can be achieved through tax benefits on an annual basis. And that 2.5% is already higher in itself than what a savings account currently yields in interest per year. Sustainable investing can therefore be very interesting, also financially. You support the environment, make a good return and also receive a 2.5% tax benefit on top of it.

Where can you find green investments?

There are two financial institutions in the Netherlands that primarily focus on sustainable forms of investing. These are Triodos Bank and ASN (a subsidiary of SNS Bank). These banks specialize in green investments and savings accounts. However, other major institutions in the Netherlands such as Rabobank, ABN AMRO, Fortis, Postbank or ING also offer excellent green funds. The range is large and very reliable. As a result, the market for green investing has increased enormously in recent years and more and more people are opting for green alternatives when investing.

Why should you choose sustainable forms of investing?

Green investing is investing in environmentally conscious, ecological and biological objectives. You are doing something good for the world by choosing a green alternative. In addition, you can also make an excellent return on green investments. If this is lower than with traditional investments, this is more than compensated by the tax benefits of green funds, which yield no less than 2.5% extra return on an annual basis. The risks are limited, because each of these green funds is supported by a green declaration from the government.