January 10th, 2017
The Dutch government has re-introduced the € 100,000 gift tax exemption as of 2017. The same gift tax exemption was in force as a temporary measure, applicable from October 2013 until December 2014. Starting 2017 it will be introduced again in in principle for an indefinite period. There are a few high exemptions applicable, each with their own requirements. Below we will outline the exemptions available.
Gift tax rates
The gift tax rate for gifts from parents to children is 10% for gifts up to € 122.269 and 20% for the surplus.
Gift tax exemptions
The general gift tax exemption is € 5.320. The general gift tax exemption is applicable every year. A parent can annually gift this amount without gift tax due. A gift tax return is also not mandatory in this situation.
In addition to the general gift tax exemption, parents can make an extra tax free gift to children in the age between 18 and 40 years. The additional exemptions can be claimed only once in a lifetime.
The maximum amount needs to be reduced if one of the lower exemptions have been claimed before. For this exemption, there are extra requirements, see below.
- Exemption of € 25.526
A parent can grant an amount of € 25.526 under the gift tax exemption.
- Exemption of € 53.176
The exemption of € 25.526 can be increased up to € 53.176 under the condition that the gift will be used for study purposes.
- 2017 and onwards; € 100,000 gift tax exemption
Parents can grant their children € 100,000 free of gift tax under the condition that the gift will be used for:
- The purchase of a home which will become the child’s primary residence;
- Repayment of a loan on a home which is the child’s primary residence;
- The renovation of a home which is considered the child’s primary residence;
The home does not necessarily have to be located in the Netherlands and the gift can be spread over a period of three years.
An important note is that this exemption is not only applicable to parent-child situations. Each person, related or not, can claim once in a life time on the € 100,000 exemption, as long as the person who is receiving the amount is in the age between 18 and 40.
The additional exemptions need to be claimed in a gift tax return.