First-time homebuyers may occasionally find it challenging to purchase a home as the average property price and the cost of living and rent continue to grow. Most parents are prepared to chip in and cover closing costs, renovation fees, and/or part of the purchase price.
If you and your parents are Dutch, you probably know what to do when you get a gift. But if you're from another country and live in the Netherlands, figuring out the gift-giving customs might be a bit confusing.
A donation might not be subject to Dutch tax laws if you receive a gift from abroad. If the gift is done by a non-resident or a resident (but not a Dutch citizen) who emigrated from the Netherlands more than a year ago, there is no gift tax due. If someone transfers a gift that never lived in the Netherlands, there's also no gift tax due. But as soon as the money lands in the Netherlands, you can start to incur "Box 3" tax obligations unless you're eligible for the 30% ruling.
Do I need to file a tax return if I receive a gift from my parents living abroad?
It all depends on the country of the giver. There are three situations to consider:
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Is the giver Dutch? You must file a gift tax return if they relocated overseas less than ten years ago.
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Is the giver not a Dutch citizen? If the donor relocated outside the Netherlands less than a year ago, you must file a tax return.
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Has the giver never lived in the Netherlands? Then you don't need to file a tax return.
How much can your parents donate to you?
There is no restriction on the amount of donation your parents can make to you if they have never lived in the Netherlands.
Do you wish to determine your mortgage affordability, including the gift from your parents? Schedule a call with one of our mortgage specialists to get a personalized mortgage report.
