Wealthy parents rushing to gift money for home purchase before tax increase
Notaries are seeing a flood of wealthy parents rushing to gift their children 106,671 euros tax-free for purchasing a home or paying off a mortgage before that tax exemption disappears next year, NOS reports. “It is really starting to storm,” Rotterdam notary Aniel Autar said to the broadcaster.
“People are really engaged in it; we get a lot of questions,’ said Lucienne van der Geld of Netwerk Notarissen, which has about 150 offices. She noticed that not all parents immediately gift the full tax-free amount but a smaller amount to top up later. “Their child does not yet have immediate purchase plans, but with that, they keep the option open.”
The Dutch government implemented the “tax-free ton” in 2013 to stimulate housing sales, which were lagging in the aftermath of the credit crisis. It was abolished a year later but returned in 2017. The tax-free amount started at 100,000 euros but has been indexed every year.
During the past years of skyrocketing home prices, there was a lot of criticism about this tax-free gift. Many thought it gave the children of wealthy parents even more of an advantage in the housing market because they have that over 100,000 euros more to bid on a house and drive up prices further.
The Cabinet, therefore, decided to gradually scrap the tax-free ton from next year. “It is an important step that contributes to a fairer playing field among starters and reduces inequality,” said Housing Minister Hugo de Jonge.
