The activation of the measure for tax-free - in essence - monetary donations from parents to their children opens a window for cheaper first home purchases with obvious benefits for the real estate market.
With a circular of the AADE, the provision passed last month is activated, so that for parental benefits of monetary amounts - with which a first residence is acquired - the independent taxation 10% will not apply but the first scale of taxation of parental benefits and inheritances. The specific scale has a tax-free limit of 150,000 euros, while the next 150,000 euros the tax rate is 1%. Thus, for a parental allowance of 300,000 euros, the tax that the parent will pay amounts to 1,500 euros.
The activation of the measure for tax-free - in essence - monetary donations from parents to their children opens a window for cheaper first home purchases with obvious benefits for the real estate market.
With a circular of the AADE, the provision passed last month is activated, so that for parental benefits of monetary amounts - with which a first residence is acquired - the independent taxation 10% will not apply but the first scale of taxation of parental benefits and inheritances. The specific scale has a tax-free limit of 150,000 euros, while the next 150,000 euros the tax rate is 1%. Thus, for a parental allowance of 300,000 euros, the tax that the parent will pay amounts to 1,500 euros.
In particular, for the calculation of the tax on monetary donations and parental benefits, recommended by parents to their children for the purchase of their first home, the scale of the Inheritance, Donations and Parental Benefits Taxation Code is applied, which provides for a tax-free limit of 150,000 euros. For sums of money over 150,000 and up to 300,000 euros a 1% tax is imposed, for sums over 150,000 and up to 600,000 euros a tax rate of 5% is applied, while for the part of the money that exceeds 600,000 euros a tax is imposed at a rate of 10%. A condition for the favorable treatment of donations and parental benefits is that it appears that the donation or parental benefit is for the acquisition of a property for which the children were granted the first home exemption.
A prerequisite for the favorable treatment of said donations/parental benefits is that it appears that the donation/parental benefit is for the acquisition of the specific property for which the child received the first home exemption. In addition, the abolition of independent taxation with rate 10% only concerns parental benefits for the acquisition of a first home by the children and not for the acquisition of other assets, e.g. car purchase.
It should be noted, however, that the presumption of acquisition of the amount given as a benefit by the parent to his child normally applies and should be justified by the parent's income, such as from savings.
With the same circular, the regulation regarding the exemption from inheritance tax of the movable property of a Greek citizen who has lived abroad for at least ten consecutive years is extended to the taxation of donations. The permanent establishment of the donor abroad for the period of ten years must be proven. at least before the establishment of the donation, that the donated movable property has been acquired abroad (and not just deposited in foreign credit institutions, etc.) and, in case of relocation of the donor to Greece, that no long period of time has passed period from his stay abroad. The period of five years is considered reasonable in this case!
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Source: Capital.gr
Source: Taxheaven