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Zero tax on cash donations of up to 150,000 euros from parents to children for the purchase of a first home and gradual rates of 1% to 10% for higher amounts provided for by the recently activated legislation. In fact, these amounts are tax free either delivered in cash or intended for payment of fees mortgage for your first home.
Until recently, donations from parents to children were taxed at a rate of 10% and in fact from the first euro. For 150,000 euros the tax was 15,000 euros, while for a monetary donation of 300,000 the tax has been limited to the amount of 1,500 euros from 30,000 euros.
Also under the new framework are cash benefits for construction of a building on a plot that the son acquired with a first home exemption, as well as the acquisition of real estate abroad, are subject to a 10% tax from the first euro.
With a new explanatory circular AADE Commander George Pitsilis The new tax framework for donations related to the purchase of a first home as of July 31, 2020 is analyzed in detail. In particular, the new circular clarifies the following:
Previous parental benefits: For donations / parental benefits, in which the tax is calculated based on the tax scale, that is, a tax-free limit of up to 150,000 euros is applied, the institution of inclusion of previous donations / parental benefits applies. In other words, previous parental donations / benefits are received from the same parent to the same child, since for them the tax obligation arises from 1.1.2004, but they are also included in subsequent ones. Therefore, if it is the first parental donation / benefit from the same parent to the same child, there is a zero tax burden up to the amount of 150,000 euros (tax-free amount of the category A ‘scale).
Parental benefits above the price: Taxation based on the tax scale is subject to the total amount of money provided for the purchase of a first home, not only to the amount exempt from transfer tax, and can also cover the cost of a lawyer, notary, remittance fees and the resulting fees. transfer tax. If the amount of the financial donation / parental benefit exceeds the aforementioned price and purchase expenses, in case of excess it will be subject to independent taxation.
Construction of a plot: The money provided by the parents to the children for the construction of a building on a plot of land (whether the donor / child has been exempt from the first residence for the acquisition of the plot or not) is subject to separate taxes.
Loan fees: The tax inclusion based on the tax scale (150,000 euros tax-free) refers to the amounts of money contributed after the entry into force of the regulation, regardless of whether the purchase and exemption of the first residence was made at an earlier time to the law, provided that it covers a price paid (lump sum or installments) at a time after 31.7.2020. The same applies if the proven amounts of money were provided for the repayment of the loan installments granted for the first specific home purchase that was exempt.
Preliminary property sale agreement: The parental donation / provision of funds for the drafting of a pre-purchase contract is not included in the cases of regulation for its inclusion in the tax based on the scale, but they are subject to independent taxation, since at this point the condition exemption of the first residence. The same (independent taxation) applies in the case of parental donation / provision of money for the purchase of children residing abroad, since in this case the exemption condition provided for in Law 1078/1980 is met, as required explicitly law.
Control: For the inclusion of the gift / parental benefit in the scale-based taxation, it must be explicitly stated that it was recommended for the purchase of a specific property for which the donor / child was exempt. Because the donation or parental benefit form is presented within 6 months of its establishment, As a general rule, details of the VAT return should be indicated on the corresponding return. (as well as the assignment contract, if it is already drawn up), so that the validity of the legislation can be verified. Given that the VAT exemption is a condition for the inclusion of these monetary donations in the taxation based on the scale, the non-indication of the data (at least of the VAT return) implies an invitation from the taxpayer by the Tax Agency. within 3 business days of receipt of the declaration, as defined in decision A.1137 / 2020, to complete them
THE non-completion of the declaration data (if the taxpayer claims that it has not yet been presented) does not imply that the monetary donation is subject to independent taxation at this stage, provided that at least the details of the property purchased are listed and the conditions for the exemption of the first are met home. Verification of the contribution of all conditions is carried out within the next 60 days but also in the control stage. To ensure the contribution of the VAT exemption as a condition for the scale-based taxation, the financial donation / parental benefit declarations, for which the tax was calculated based on the category A ‘tax scale before the pension. of the transfer contract and before the presentation of the corresponding VAT return, they are obligatorily verified.
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