Let's Not Talk About Inheritance Tax

The figures are new; the debate is old. Economists at Maastricht University calculate that the 1.34 million households headed by someone over 75 together hold a net wealth of 491 billion euros — a record amount that will be passed on as inheritance in the coming years.¹ Before the ink is dry, the commentary clusters around a single instrument. The professor of political philosophy argues for a higher inheritance tax to close the gap. The economists themselves, who know the political reality, sidestep towards a higher exemption for renters and fiscal incentives to spend wealth while alive. And in the background stands the verdict that killed the discussion years ago, from a prime minister who declared inheritance tax one of the most unfair taxes in existence — a sentiment a broad political majority shares with him.

Everyone reaches for the same lever. Let us, for the duration of this piece, not talk about inheritance tax. The tax matters, but the collective fixation on that one lever hides the question that precedes it: what has actually happened here, in administrative terms, and where the bill lands for those who inherit nothing.

A parameter that changed character

Begin with how the transfer came about. The mortgage interest deduction, the fiscal treatment of the owner-occupied home, a decade of falling interest rates and rising prices: these are parameters that were each, at some point, set to make housing more accessible. They have done what an instrument does when it stays in place long enough. Dutch house prices have quintupled in thirty years, and whoever held an owner-occupied home in that period built up equity almost automatically, even without ever paying down the loan.²

None of those parameters was designed to organise a wealth transfer between generations. Added up over time, they nonetheless let the instrument change character — from an access arrangement into an accelerator of wealth transfer. That is precisely the mechanism described in Series III as the congealed outcome: an outcome produced by earlier design choices is read in the next round as a given, as if it were made not by policy but by nature.³

One number makes the shift visible. In 1985, the head of a household who died at age 73 left on average 9,500 euros per recipient. A child from an owner-occupied home now inherits on average 368,000 euros.⁴ That is sediment. Nobody designed the inheritance wave. It is the sum of rounds that each, on their own, seemed sensible.

Whose function has this become

What exactly has shifted can be named precisely. Access to a secure home — and with it to wealth formation and part of the income security that hangs from it — is a public function. In the large cities, a home has become virtually unreachable on labour income alone. More money is needed, and one young family receives it from its parents and the other does not. The function has, noiselessly, moved to a private carrier: the family.

With that, the test presents itself that is worked out in chapter nine of Interim Management for the Public Sector (manuscript in preparation) as the first test of any intervention. The test asks whether that carrier holds the function over time and for everyone; it does not. A child from a rented home inherits on average 18,000 euros, a child from an owner-occupied home on average 368,000 euros — an average pulled up further by a small group of the very wealthy, while the gap with the renter’s child remains of a different order.⁴ And the advantage compounds: whoever inherits buys earlier, builds equity earlier and passes on more in turn. The family does carry the function, but only for those already ahead, and it reinforces the head start across generations.

What matters here is what does not happen. No elite withdraws. Nobody deliberately holds a door shut. Home owners are more than half the population.⁵ The architecture produces this divide by itself, without anyone choosing it. That distinction is not cosmetic. It determines where the correction must take hold, and it keeps the diagnosis away from the moral register in which it becomes instantly recodable.

In the Reverberation series, the silent expropriation already described how fiscal fragmentation shifts the ownership structure without anyone making the choice.⁶ What is added here is the migration of a public function to a private carrier — and the question of what happens to the group that lacks that carrier.

The residual carrier

For that group, the bill lands with the municipality, while central government holds the fiscal levers. Those who cannot make the leap to an owned home and have no wealth behind them appear downstream — in debt assistance, in special municipal assistance, in protective administration, in social support, and further along in the youth domain, where existential insecurity is so often the upstream cause.

In an interim assignment in the social domain of a mid-sized municipality, I saw how the sum of such a household behaves. Protective administration paid through special assistance, a debt assistance trajectory, social support, and, as soon as the problems escalate, a specialist mental health or youth care trajectory on top. Each item individually defensible, each award the result of a correct decision. Together, a bill that lands on the municipality, while none of those items becomes visible on any single line of the national budget. It costs central government nothing extra, for the simple reason that the costs never come together anywhere.⁷

The choice between absorbing a shock and preventing it is a false opposition. The buffer is always paid. The only question is by whom, and when. For those who inherit nothing, it is paid at the municipal counter. And the timing is bitter, because that bill arrives in the “ravine year” — the funding cliff facing Dutch municipalities — precisely when the municipality’s own buffer falls away. That is the cost-shifting documented elsewhere in this corpus, disguised as decentralisation: central government keeps the authority, the municipality gets the execution, the risk and, increasingly, the costs.

A burden nobody can count

In the Strategic Triangle this is a pure imbalance. The operational burden is maximised at the municipality, while the financing and the mandate to do something about it sit with another layer of government, or nowhere. The corner of operational capacity carries what the other two corners have shed.

The burden is, moreover, virtually invisible to central government, because it does not arrive as one line item but as loose caseloads. Debt assistance here, special assistance there, a youth care referral further along. There is no budget line called: the costs of a public function that moved to the family. What does not appear as one number cannot be weighed, and what cannot be weighed is not financed.

The wave itself, meanwhile, is no surprise. The demography has been known for decades, the concentration of wealth in the owner-occupied home is extensively documented, and the size of the coming inheritance transfer was calculated years ago.⁸ What is missing is an organisational memory function that holds the prediction beyond the next change of cabinet, and translates it to the layer of government where the bill actually lands. It is the same temporal signature described in the Reverberation series: structurally short-sighted action against structurally knowable outcomes.

What the municipality can do

The municipality is here the residual carrier without the instrument. It cannot raise the inheritance tax, because that is not its lever. And whoever signals a problem is not obliged to supply the fiscal solution to make the signal valid. Diagnosing and solving are different crafts, and recognising that is a sign of respect for the difficulty of the second.

There is nonetheless terrain that does lie on the desk of the municipal chief executive. It begins with countability: bring the items now scattered across debt assistance, special assistance, protective administration and the youth domain together into one visible burden in the municipality’s own planning and control cycle, so that the shift can be weighed in administrative deliberation instead of disappearing as background noise. It runs on to anchoring: the Municipal Debt Assistance Act has given municipalities, since 2021, the authority to act on payment arrears before the debt stacks up.⁹ That is exactly the type of function whose value shows itself only when nobody is looking any more, and which is therefore the first to fall in a round of cuts. The anchoring test here is the sharpest there is: what remains of early signalling when the alderman changes and the budget shrinks. And it reaches towards central government: that the burden of a shifted public function systematically ends up with the layer without the instrument belongs in every negotiation over the financial relations between layers of government — along the line worked out in Recovery State Netherlands, with one budget holder per life domain and a compensation duty when layers of government shift costs onto each other.¹⁰

None of these handles solves the divide. They do not shift the bill back. What they do is enable the residual carrier to carry its function without succumbing to it, and make the shift visible at the place where financing is decided. That is more modest than a higher inheritance tax. It is also the only thing actually within reach of those who pay the bill now.

So by all means, hold the debate about inheritance tax. It is a real debate, and it concerns an instrument that stands at the source. But hold it only after establishing where the bill is already being paid: at the municipal counter, by those who inherit nothing, in the year that counter loses its own buffer. The question is why an inheritance has become decisive for something that was once a public function — and who pays when that function moves to the family and the family is missing.

---

---

Jacob Huibers is an interim manager with more than twenty years of experience in the Dutch public sector. He has worked as cluster manager, cluster director and quartermaster at municipalities ranging from fifty thousand to over two hundred thousand inhabitants, and at inter-municipal collaborative bodies across the social and physical domains. Statecraft is his platform for strategic reflection on public-sector execution, pillar IV of House of Viridian.

Responses and counter-arguments via Statecraft.nl.

Footnotes

1. Dirk Brounen, Nils Kok and Jonas Wogh, ‘Vermogensbezit zal steeds meer bepaald worden door erfenis’ (‘Wealth holding will increasingly be determined by inheritance’), ESB 111(4858), 25 June 2026, pp. 249-251. The 1.34 million households headed by someone over 75 together hold a net wealth of roughly 491 billion euros — the Dutch equivalent of the American Great Wealth Transfer. ↩

2. ESB 2026, which establishes that Dutch house prices have quintupled over the past thirty years. On the growth of bequeathed wealth itself: N. Wesselius, ‘Nagelaten vermogen tussen 2007 en 2022 ruim verdubbeld’ (‘Bequeathed wealth more than doubled between 2007 and 2022’), statistics feature on esb.nu, 1 October 2025. ↩

3. Statecraft, Series III, Nº 02, The Congealed Outcome as Manifested Preference: the mechanism by which an earlier round of decisions is read in a next round as an exogenous parameter. ↩

4. 1985: on average 9,500 euros per recipient (ESB 2026). The amounts of 18,000 euros (rented home) and 368,000 euros (owner-occupied home) per child come from Statistics Netherlands microdata, presented in ESB 2026 and in Trouw, 27 June 2026. ↩ ↩²

5. Home ownership in the Netherlands just over 57 per cent of the housing stock (Statistics Netherlands, position at 1 January 2025: 57.5 per cent owner-occupied against 42.4 per cent rented); the net wealth of the over-75 household with an owned home versus a rented home compares, in 2023, as roughly 690,000 to 50,000 euros, against 472,000 to 37,000 euros in 2011 (ESB 2026). The Statistics Netherlands share refers to the housing stock, not to the share of persons. ↩

6. Statecraft, Series II (Reverberation), Nº 02, The Silent Expropriation: fiscal fragmentation shifts the ownership structure without anyone making the choice. ↩

7. Practice observation, interim assignment in the social domain, municipality of 50,000-250,000 inhabitants. The configuration of stacked provisions (protective administration, debt assistance, social support, specialist care), in which each individual award is defensible and the sum lands on the municipality, is worked out elsewhere in the corpus as the carousel case. ↩

8. Compare De Beer et al. (eds), Voor wie is de erfenis? Over vrijheid, gelijkheid en familiegevoel (Whose inheritance is it? On freedom, equality and family feeling; Van Gennep, 2018): roughly forty per cent of private wealth stems from inheritances, with a calculated transfer of 230 to 240 billion euros over ten years of which some 15 billion returns in inheritance tax, an effective rate of 6.4 per cent. The temporal signature — structurally knowable outcomes against structurally short-sighted action — is worked out in Statecraft, Series II (Reverberation), synthesis. ↩

9. Municipal Debt Assistance Act (Wet gemeentelijke schuldhulpverlening), amendment on early signalling of payment arrears: Act of 24 June 2020, Staatsblad 2020, 239, in force since 1 January 2021; the new duty sits in article 3(1)(b) of the Act, elaborated in the accompanying decree. ↩

10. Statecraft, Recovery State Netherlands. Why the Dutch government acts only when the courts compel it (July 2026): integrated domain responsibility, one budget holder per life domain and a compensation duty when layers of government shift costs onto each other. ↩