In the real estate market, money wins over loans, with Greeks reaching for their savings to buy their own home. According to bank executives’ estimates, 8 out of 10 real estate purchases and sales are now made with cash and not with bank loans. Data from the Bank of Greece shows that in the first quarter of 2024, housing loans of 113 million euros were paid. In the same period, based on the Register of Real Estate Transfer Values, 14,054 real estate purchase and sale contracts were signed with a total value of 1.16 billion euros transfer of real estate, as market experts say, recorded a decrease of almost 20% compared to last year, parental benefits and donations remain ahead because in most cases there is no tax. Parents who donate money to their children to buy a house are tax-free if the parental allowance reaches €800,000, while children enjoy a high tax-free threshold when buying a first home.
Those who transfer real estate or donate money should be especially careful not to get involved in the adventures of the Tax Office and face tax bells. AADE’s audits revealed thousands of cases of parental benefits in monetary amounts made by depositing cash in bank accounts as well as monetary donations to people who do not have the right to tax. -free limit of 800,000 euros. As shown in the audits, the taxpayers donated an amount of money to their children or grandchildren with parental benefits which, however, was not done by transferring the amount of money through banks, as as prescribed by law, but with money deposited in the bank. account of the recipient and usually a 10% tax must be paid. Cases of fictitious parental benefits are also recognized by people who are not entitled to a tax-free amount of 800,000 euros.
What you need to know
Therefore, before starting a parental benefit or donation, taxpayers should know the following:
-The tax-free amount of 800,000 euros related to parental benefits – donations of any type of property (movable, immovable, receivable) whose recipients are only persons of category A’ (spouse, partner to live, children, grandchildren and parents). In other words, siblings, nephews, uncles and other relatives are not included.
-Benefits and donations to parents must be verified by transferring money through financial institutions.
– When drawing up notary documents for the transfer of real estate, the payment of the price is made exclusively by using the bank payment method.
– Parental cash benefit (with money taken from the mattress or chest, etc.), taxed at an independent rate of 10%, with no tax limit.
The same applies when the parent deposits money into the child’s account.
In cases of successive donations benefiting persons who are not entitled to a tax-free amount of 800,000 euros (for example a donation from a child to a parent and then a donation from that parent to another child), the Tax Office checks the actual circumstances and the possibility of these donations, as well as the time interval between them. In cases where it is proven that the last beneficiary of successive donations is a person who does not belong to category A’ of beneficiaries (for example a sibling) and that successive donations are made for this purpose, then a tax of 20 % is imposed without a tax limit. If the time interval between successive donations is short (no more than six months) a control bell.
The ability of the parent/donor to make a monetary benefit to the parent/donation to the child/recipient will not be checked at the declaration submission stage. That is, there is no obligation to submit income tax returns for previous years, etc. The background of the donor is checked during the verification of the declaration. For this reason those who donate money should “check” their incomes and especially if they can cover the donation or parental benefits.
One of the solutions that taxpayers need to cover “pothen esche” is capital depletion. With this method, income from previous years can be used without restriction. In other words, they can claim their income 5, 10, 20 or more years ago.
In the case of transferring an amount of money to a joint account of the child/donor with a third party, the proven “use” of the amount of money by the parent benefits/donates the child/donor and not the third person is the subject of control.
If the “use” of the amount of money is verified by a third party, a donation tax will be imposed.