Tax free donations in the Netherlands

In the Netherlands it is possible to receive a tax free donation. For example, parents may donate a maximum amount of € 5.515 completely gift tax free to their children in 2020. Over this amount, no gift tax has to be paid by the child. In this article we inform you about gift tax in the Netherlands. In this article we also inform you about specific donations and tax exemptions, for example for the purchase of a house or paying study fees. If you have any questions, please contact us and we will give advice about the possibilities.

WHAT ABOUT TAX FREE DONATIONS FOR A STUDY?

The costs for a study in the Netherlands can be high. Fortunately, your parents are allowed to donate € 54.114 tax-free in 2020. However, there are a number of conditions that apply to this tax free donation for study costs. Conditions tax free donation study costs:

  • The study or training costs at least € 20,000 per year, excluding your living expenses.
  • A notary has recorded the donation in a deed which states for which study the donation is intended how much the expected costs of your training program are that the donation will expire if you have not spent the amount on your training before 2023.
  • You have not previously used an ‘increased exemption’. This is a tax-free gift for your own home or an expensive study, or a tax-free gift that you are free to spend.
  • You are between 18 and 40 years old. Or your partner is between 18 and 40 years old. The day of the 40th birthday still counts.
  • You and your parents can prove in writing that the donation has been paid, and that you have actually used it for your studies.
  • If you use this exemption, you may not also choose the free to use donation exemption or the exemption for a house for sale. In fact, you may use one of these exemptions once in your life.

WHAT ABOUT TAX FREE DONATIONS FOR BUYING A HOUSE IN THE NETHERLANDS?

Do you want to buy or renovate a house? And will you receive a donation for this in 2020 from your parents, for example? Then you do not pay gift tax over an amount of up to € 103,643. These are the conditions in 2020:

  • You use the money to: buy or renovate your own home, pay off the mortgage or residual debt of your own home, the leasehold, superficies or oppression rights of your own home.
  • You are between 18 and 40 years old. Or your partner is between 18 and 40 years old. The day of the 40th birthday still counts.
  • You use the money in 2022 at the latest.
  • You can prove in writing that the donation has been paid and that you have used it for your own home.
  • You or your partner have not previously used an ‘increased exemption’ for a donation from this donor.

The tax free donation replaces all other exemptions

This means that in the same year you may not receive € 5.515 tax-free from your parents, or € 2.208 if you received the donation from someone else. Do you receive the gift from your parents? Then of the € 103.643, you may spend a maximum of € 26.457 on something other than your own home. Do you receive the donation from someone else? Then you may spend a maximum of € 2.208 of the € 103.643 on something other than your own home.

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Need advice about Dutch gift tax?

Our tax advisors will inform you about the Dutch gift tax and tax benefits you can obtain in the Netherlands. Think of a donation from your parents who may want to give you an amount for your studies or the purchase of your own home. We will clarify the possibilities and guide you in designing the tax exemptions. Then we will draw up the gift tax return for you and submit it to the Dutch tax authorities.