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CAN YOU STILL GIVE,
THEN GIVE ALONG
No, this is not our ninth blog post about the best cocktail for New Year's Eve, I want to talk about more serious matters. Money. And believe me, you will be grateful to me for this.
“I know there is something, May. Quite a bit. But how much, over my dead body will my father tell me that.” This is what my friend M told me recently when we were discussing the fact that we always seem to have too little money and still hope for an inheritance someday. Then there’s another free delivery/promotion from Net-A-Porter and we are hopelessly lost again. You know how it is.
Our parents are often a lot more responsible and have built up a nice amount of money since they were younger. I understand that not all parents are blessed with a bag of money. If that is the case, then what I am about to write might be very interesting for you.
Coöperatie DELA outlines the options for parents to give while they are still alive. Now you probably think of DELA in terms of funerals, but DELA does much more besides taking care of 40,000 funerals a year. They also help you with questions about guardianship, gifting, and wills. Gifting is attractive for the giver (the parents) and for the receiver (us, the young adults who often find themselves a bit short on cash, even if we already have a job). An extra advantage of gifting is that parents can gift an amount tax-free to their children every year.
I know so many people in their twenties and even thirties who wait for years for a nice rental house (that market is so overheated). They have the financial means to pay for a rental property, but good luck finding one that you can afford and don’t have to share with a roommate. Especially in the city, this seems impossible. And when you finally find such a house and spend hundreds of euros each month on rent, you wonder: why not own a nice house and spend about the same monthly amount on paying off a mortgage? Many young people - despite their (starter) salary - cannot manage to get a mortgage. Banks have strict requirements nowadays. This results in years of ‘throwing away’ money on rent and often remaining stuck in a shared (too expensive) home. And at some point, you really get fed up with that because you also want to be able to parade around your own house in your birthday suit, right? Exactly, for buying a house, you could use such a gift from your parents.
Your parents probably find that pleasant too: At least they know for sure that you are not squandering their money on vacations in Ibiza and excessive Chanel visits. Read here the possibilities. In 2016, parents can gift €5,304 tax-free. Additionally, parents can gift a one-time amount of €25,449 tax-free (child's age: 18-40 years). Children can spend this freely. For the purchase of a house, parents can gift a one-time tax-free amount of €53,016 to their children (child's age: 18-40 years). This amount must then be spent on the purchase of a home or a renovation. And that can provide a solution for many adult children and their parents. A typical win-win situation, I would say.
Do you want to look together with your parents at other options to spend their money wisely? Then take a look here. I do expect a thank-you dinner when you are in that new house of yours.
