Per child, parents may donate a maximum of € 5,428 (in 2018 this was € 5,363) tax-free each year. This amount applies to both parents together, even when they are divorced. They may donate a maximum of € 26,040 (2019) tax-free to children aged 18 up to and including 39 once. If a child is too old himself, but his partner is between 18 and 40 years old, the exemption also applies. If you have the Prepaid Gift Card then you can have the best solution there.
Donation for a house
Since January 1, 2017 you can donate € 100,000 (in 2019 € 102,010) to your (grand) child, without having to pay gift tax. A condition is that the money is used for his or her owner-occupied home and here too the requirement applies that your (grand) child is between 18 and 40 years old. Read about the benefits and pitfalls and how to arrange the donation.
The last-mentioned exemption applies not only if the money is used for the purchase of a house, but also, for example, for a renovation , repayment of the home acquisition debt, surrender of a leasehold or repayment of the residual debt. However, it cannot be a second home. This exemption does not only apply to gifts from parents to their children, but also to gifts to others, such as grandchildren.
How much can you donate tax-free for your own home?
Discover in a few steps how much you can donate for a house without paying a gift tax.
- Choice aid donation
- Donate for a study
The one-off tax exemption for donations to children between the ages of 18 and 39 is even € 54,246 (2019) if that amount is used for a study that costs at least € 20,000 per year. Unfortunately, this exemption does not concern regular studies. The donation may also not be used to repay a student loan and the exemption does not apply to donations to grandchildren.
If a donation is greater than the permitted exemption, the excess will be taxed for a maximum of 20%. The Tax and Customs Administration offers a handy calculation tool with which you can calculate how much gift tax must be paid.
Gift tax return
For a gift that falls under the one-off exemption, the child must (despite the exemption) make a gift tax return. This must be done before 1 March of the year after the donation.
Donate money on paper to your child
With a donation on paper you can save your (grand) children (much) inheritance tax later or, for example, anticipate a possible admission to a care institution. With a donation on paper, the children receive no more than a claim on which the parents owe interest. The donated amount only really goes to the children when the parents die or at another (mentioned in the deed) moment. Until that time the parents have access to the money.
Parents must pay at least 6% interest on the donation annually. They must actually transfer that amount to the children. The latter can do what they want with that money. Please note: if not all interest is paid when the parents die, the tax authorities will add the entire claim to the inheritance. If only the interest for the year of death has not yet been paid, this will not apply.