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Two-speed parental benefits now apply Tax office in cases where parents help their children financially. If they are given money to buy a car, the parental benefit of the amount of money is taxed at a rate of 10% and even from the first euro. However, if the children acquire a first home with a “dowry”, the tax is set to zero for amounts up to 150,000 euros.
Thus, in the event that the father gives his daughter the amount of 5,000 euros for the purchase of a car, then the specific parental benefit will be charged with a tax of 500 euros (5,000×10%). But if the father helps his daughter buy a first home by giving her 50,000 euros, she will not be charged a single euro.
Cash tax-free parental benefits
The current new arrangement provides Zero tax on cash donations from parents to their children for the purchase of a first home for amounts up to 150,000 euros and graduated rates from 1% to 10% for larger amounts, when previously monetary donations from parents to their children are taxed at a rate of 10% and in fact from the first euro. The profit is huge. In such a donation of 150,000 euros, until now the corresponding tax was 15,000 euros, while after the new provision it will be zero. And in the next step, however, for donations of money of up to 300,000 euros, the tax is comparatively minimal. From 30,000 euros it drops to 1,500 since for the part of the donation of 150,000 to 300,000 euros a tax is imposed with a rate of 1%.
This maneuver by the Ministry of Finance is a golden opportunity for the real estate market, which is also being tested by the effects of the pandemic. The only condition is proof of the purchase of the first home by the children, while the parents must justify the legal origin of the money.
For the calculation of the tax on financial gifts and parental benefits, recommended by parents to their children for the purchase of a first home, the scale of the Tax Code of inheritance, donations and parental benefits is applied, which provides a tax-free limit of 150,000 euros.. For amounts greater than 150,000 and up to 300,000 euros a tax of 1% is imposed, for amounts greater than 150,000 and up to 600,000 euros a tax rate of 5% is applied, while for the part of money that exceeds 600,000 euros a 10% tax. A condition for the favorable treatment of gifts and parental benefits is that it follows that the gift or parental benefit is made for the acquisition of immovable property for which the children were exempt from the first residence.
Terms
In particular, for the parental benefit not to be taxed independently at the rate of 10%, the person who acquires residence through a donation or parental benefit, the spouse or their minor children should not have the right to full property or usufruct or to the house. in another residence that meets the family’s housing needs and is located in a municipality or community with a population of more than 3,000 inhabitants. Likewise, not to own, in a municipality or community with a population of more than 3,000 inhabitants, a building plot that corresponds to the surface of a building that meets its housing needs. In accordance with the provision voted with the new Bankruptcy Codes, housing needs are considered not covered if the total area of the buildings owned or can be built by the beneficiary is less than 70 m2. increased by 25 square meters. for each of the first two children and for 30 square meters. for the third and each of the subsequent children of the beneficiary.
It should be noted that the abolition of independent taxation at a rate of 10% affects only parental benefits for the acquisition of a first home by children and not for the acquisition of other assets, p. car purchase. The presumption of acquisition of the amount delivered as a benefit from the father to the child is also maintained and must be justified by the father’s income.
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