Baby boomers are leaving behind money. A great deal of money. Over the next ten years, according to UvA economist Paul de Beer, between **€ 230 and € 240 billion** in inheritances will roll through the Netherlands. This exceeds the total national budget for education, culture, and defense combined. And it is only the beginning: by 2035, the annual flow of inheritances could reach € 40 billion. Those over 65 now hold € 955 billion in assets — more than double the figure from a decade ago.

The question that is seldom asked: *where is all that money going?* And, more importantly: where should it go? For behind the figures lies a political choice that extends beyond the usual divide between left ("tax it") and right ("abolish inheritance tax"). There is a third way, and it begins with the observation that both camps are largely mistaken.

Where the money flows now

Tracing an average Dutch inheritance from the notarial deed to its final destination leads to four places. Approximately **46 percent** is tied up in the deceased’s primary residence and, after sale or transfer, returns to the housing market — often in the form of mortgage repayments by the heir or investment in a second home. A second major stream ends up in savings accounts and investment portfolios, with roughly **65 percent** of Dutch private investment capital being invested beyond national borders: in American index funds, global ETFs, and Asian equities. A third portion is spent on consumption — travel, cars, renovations. And a small portion is gifted early to children and grandchildren to avoid inheritance tax.

What is striking: hardly any of this money finds its way to Dutch companies seeking growth, scale-ups in search of capital, sustainable energy projects requiring financing, or innovation in agriculture or technology. The inheritance wave is a massive flow of capital that almost entirely bypasses the real Dutch economy.

The Banking Channel — Myth and Reality

"But the money remains in the banking system, doesn't it?" is a frequent counter-argument. "Banks can use it to finance businesses." This is true in theory: under Basel III rules, every euro in savings can support three to five euros in corporate credit. If the € 10 billion that ends up in bank accounts annually from inheritances were indeed channeled into SME lending, we would be talking about € 30 to € 50 billion in potential business financing.

In practice, things work differently. Since 2015, Dutch banks have faced structural deposit surpluses: they receive more money than they issue in loans. Furthermore, ING and Rabobank hold 50 to 60 percent of their assets abroad. The transmission of savings into Dutch corporate credit is clogged — not by a lack of funds, but by a lack of risk appetite, stringent capital requirements, and the simple reality that a bank would rather finance a German energy company than a startup from Twente. The banking channel exists, but it is leaking.

The Fiscal Spiral Nobody Calculates

Now for the political reflex. The left wants to raise inheritance tax — the GroenLinks-PvdA coalition has already introduced a third bracket for 2026, ranging from 30 to 49.5 percent for amounts exceeding € 300,000. The right wants to abolish inheritance tax, citing "double taxation" (as tax has already been paid on that wealth). Both positions are intellectually lazy, as both ignore the core question: what happens to the money?

Every euro the state skims off through inheritance tax disappears from the banking multiplier mechanism. A euro that ends up in a savings account can be recycled as credit three to five times over; a euro in inheritance tax goes into the general coffers of the national budget — of which only a fraction, perhaps one percent, ends up supporting direct economic strengthening. In its evaluation of previous corporate tax cuts, the CPB calculated that spiral effects compensate for roughly 50 to 70 percent of the initial tax loss. From a macroeconomic perspective, inheritance tax is one of the least efficient taxes in the Netherlands. It generates € 3.4 billion, but costs — in lost banking multiplier — many times that amount in potential business credit.

Yet generic abolition is no solution. Look at Ireland: corporate tax was lowered to 12.5 percent and revenue rose from € 3 billion to € 24 billion — a spectacular success on paper. However, much of that revenue comes from profit shifting by multinationals, not from real economic activity. The median worker in Dublin feels little of the Irish fiscal miracle years. Cutting taxes across the board can also mean primarily attracting letterbox companies.

The third way: conditional exemption

The solution lies not in more or less taxation, but in targeted taxation. The Netherlands already has one working example: the Business Succession Scheme. Those inheriting a family business pay an effective inheritance tax rate of just 1.1 percent. The justification: if family businesses are taxed heavily, heirs are forced to sell or dismantle them, which costs jobs. Politics thus already acknowledges the principle — albeit selectively.

Extend that principle. Establish a Qualifying Inheritance Asset: heirs who place their inheritance with a bank or asset manager within six months and commit it to Dutch productive assets for ten years — SME bonds, scale-up capital, renewable energy installations, biomass and Bio-CCS projects, agricultural innovation, infrastructure bonds — would receive an incremental exemption: 30 percent in year one, 60 percent in year four, 100 percent from year ten onwards. Those who withdraw the funds early face a clawback tax. Those who put their inheritance into an apartment in Marbella or an MSCI World ETF simply pay the full rate.

The figures are instructive. With a participation rate of 40 percent — comparable to the Swedish ISK savings account, used by nearly half of savers after ten years — the direct loss of tax revenue in the first year amounts to some € 1.3 billion. Substantial, but not apocalyptic: equivalent to a quarter of the childcare allowance. By year four, the scheme reaches break-even through higher corporate tax, payroll tax, and VAT revenues from the stimulated investments. By year ten, the cumulative net effect for the treasury is positive: around € 8 billion. And that is without considering the 45,000 to 80,000 additional jobs and a structural GDP increase of 0.7 to 1.4 percent.

* cumulative 10 years: € 34 billion normal revenue + € 8 billion additional from multiplier effects (corporate tax, payroll tax, VAT).

What is truly at stake

Behind these calculations lies a larger narrative. The baby boomers built their wealth in an era when the Netherlands was a producing nation: steel, electronics, chemicals, shipbuilding, agricultural exports. Their children and grandchildren inherit that wealth at a time when the Netherlands primarily consumes, imports, and administrates. If this enormous capital flow of € 240 billion follows the same path as the previous wave of wealth creation — through the housing market into price hikes and via savings accounts into American equities — then the opportunity to reverse that trend will have been lost.

The inheritance wave is not merely a fiscal-technical issue. It is this generation's final great opportunity to determine whether the Netherlands remains a nation of production and innovation, or definitively slides into becoming a service-oriented back office for other people's economies. This is not a question of left or right. It is a question of what we as a country want to be capable of fifty years from now. Do we want to produce or import energy? Do we want to develop or acquire technology? Do we want to grow food or merely transit it?

Fiscal steering is never neutral, but failing to steer is also a choice — a choice to place fate in the hands of individual heirs, wealth advisors, and algorithmic investment platforms that, by definition, have no stake in the Netherlands. The state is entitled to offer a counterpoint. Not through coercion, but through a proposition: commit your wealth to the Netherlands, and the Netherlands will commit itself to you.

The baby boomers have left this country prosperous. The question is not whether we are permitted to touch that wealth. The question is whether we have the courage to guide it intentionally — before it, silently and irrevocably, settles elsewhere.