Family money
A private loan between parent and child: the rules that matter
In short
A parent can lend money to a child, but the correct terms depend on the purpose, repayment plan and any separate gift. The family relationship does not create an automatic tax exemption, approved interest rate or guaranteed deduction.
Start with the purpose
A home purchase, renovation, study or temporary expense can require different repayment and tax treatment. Record the purpose and retain evidence showing how the child used the money.
Agree terms both sides can follow
Choose an amount, term, rate and repayment method based on the child’s budget and comparable lending conditions. Discuss job loss, early repayment, missed payments and what happens if either party dies.
A formal schedule protects the relationship only when both sides follow it. Record changes instead of allowing an informal new arrangement to replace the written terms.
Keep any gift separate
Parents may make a separate gift within an applicable exemption, but use a separate transfer and description. Do not promise automatic repayment gifts as if the loan payments no longer matter. The one-time increased exemption has its own age, prior-use and filing conditions.
Extra conditions for the child’s home
For mortgage-interest deduction, the own-home use, annuity or linear repayment, comparable rate, actual-payment, fiscal-partner and reporting conditions can apply. A notarial deed is required if the parents receive a mortgage right over the home.
Sources and further reading
Facts checked against the primary sources below on 16 August 2026.
Belastingdienst: gift-tax exemptions for 2026
Belastingdienst: interest deduction for an own-home loan from family
Belastingdienst: examples for assessing family-loan interest rates
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