Inheritance Tax in the Netherlands: A Guide for Expats and Non-Residents

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Why Expats Need to Understand Dutch Inheritance Tax

After six years in the Netherlands, I've learned that inheritance planning is crucial for expats who may own property here or have Dutch assets. Unlike some countries, the Netherlands taxes inheritances at rates up to 40%, making proper planning valuable for your heirs.

Dutch inheritance law applies to Dutch nationals living in the country and foreign residents who've lived here for five years. However, recent EU rules allow many expats to choose whether Dutch law or their home country's law applies to their estate.

Understanding Dutch Inheritance Law

If you die without a will in the Netherlands, Dutch law distributes your estate equally between your spouse/partner and children. If no spouse or children exist, the estate goes to parents, then siblings, then more distant relatives.

An important concept is "forced heirship." Children can claim 50% of what they'd receive under intestacy rules even if you try to disinherit them. Spouses can claim lifetime use of the family home or other estate assets.

Married couples automatically own all assets jointly under community of property rules unless they signed a matrimonial agreement otherwise. When one spouse dies, the surviving partner automatically keeps their half, and the other half becomes the deceased's estate.

Making a Will

Creating a will ensures your estate distributes according to your wishes. An EU agreement allows most nationalities to specify whether Dutch law or home country law applies. Professional notaries help create binding wills that protect your interests and simplify inheritance for heirs.

Inheritance Tax Rates and Exemptions

Inheritance tax is payable on the net estate value (all assets minus debts and funeral costs) within eight months of death. Tax-free thresholds vary by relationship to the deceased.

In 2025, spouses have 804,698 euros tax-free, children have 25,490 euros, children with disabilities have 76,453 euros, parents have 60,359 euros, and other heirs have only 2,690 euros tax-free.

After exceeding these thresholds, tax rates apply based on relationship and inheritance size. Partners and children pay 10% on amounts up to 154,197 euros and 20% above that. Grandchildren pay 18% and 36%. All others pay 30% and 40%.

Estate Tax on Real Estate

Real estate is valued using the WOZ (real estate law) valuation minus any mortgage debt. You can choose the WOZ value in the year of death or the year after, whichever benefits your situation.

Inherited Dutch property isn't subject to property transfer tax, but gifted property is. This is an important distinction for planning.

Non-Resident Inheritance Considerations

Non-residents' real estate in the Netherlands isn't subject to Dutch inheritance tax. However, residents' worldwide property is taxable. The Dutch authorities care about the residence of the deceased, not where assets are located.

If you're planning to move abroad, your inheritance tax status changes, which affects planning.

Double Taxation and Bilateral Agreements

Inheritance tax can lead to double taxation if your home country also taxes inheritances. The Netherlands has bilateral agreements with several countries preventing this. Check whether your home country has an agreement with the Netherlands.

Without a treaty, you might owe inheritance tax in both countries on the same assets. Professional advice is essential in these situations.

Pensions and Inheritance

Survivor pensions (Algemene Nabestaandenwet benefits) aren't taxable as inheritance. However, their cash value is deducted from your exemption. At least 162,071 euros of exemption always remains.

Strategies to Reduce Inheritance Tax

Gifting to heirs during your lifetime can reduce your estate's taxable value. Children can receive 5,515 euros tax-free for any purpose annually. Between ages 18 and 40, children can receive 26,457 euros for any purpose, 55,114 euros for expensive education, or 103,643 euros (once in a lifetime) to purchase a house.

Gifts from other relatives (grandparents, aunts, uncles) have 2,208 euros tax-free exemptions.

Professional notaries and tax advisors help develop strategies considering your specific family situation and assets.

Charities and Tax-Exempt Organizations

Charities and social welfare organizations are exempt from inheritance tax. If you're inclined toward philanthropy, structuring bequests to qualified organizations eliminates tax on those amounts.

Getting Professional Help

Inheritance planning as an expat is complex, involving multiple countries' laws, tax implications, and family situations. Expat-friendly tax advisors and civil law notaries specialize in helping expats navigate this. Their expertise often saves your heirs considerably more than their fees.

Conclusion

Understanding inheritance tax in the Netherlands protects your family's financial future. Creating a will, considering your residency status, understanding exemptions, and potentially using gifting strategies are all valuable steps. Professional advice on your specific situation is highly recommended.