PARENTAL GIFTS IN GREECE

In Greece, we see very often parents supporting their young ones, either by providing them money or by transferring movable or immovable property to them (donations, parental gifts).

Here, we provide concise information that you may find useful, as well as the steps that you will have to follow, if you want to make a donation or a parental gift.

On October 1, 2021, new provisions have increased the tax-free threshold for donations and parental gifts of property and cash to 800,000 euros for the beneficiaries of Category A, par. 1, Article 29, Law 2961/2001. Under the new amendment, pecuniary parental gifts and donations will be tax-free up to the amount of Euros 800,000 among relatives of the first category. This also includes the case where money is withdrawn from the donor’s bank account and deposited to the account of the beneficiary, on condition that the cash is deposited within 3 working days from their withdrawal.

These provisions apply to donations and parental gifts after October 1, 2021 that concern grantees that fall in the first category of Article 29, par. 1, Law 2961/2001, i.e. spouses, couples that have signed a cohabitation agreement, children, grandparents and parents. For gifts among other categories and third parties, the old scale remains applicable, the same as with succession.

The attorney acting on behalf of the grantor must check whether property titles are accurate and lawful, whether they are free of any encumbrances (mortgages, seizures etc.), must check the content and the terms and conditions of the contract that will be signed and must collect the necessary documents as applicable. Such documents include, among others: proof of tax clearance of the grantor, social security clearance certificate of the grantor, Certificate by the Municipality of the property certifying that the Property Tax (in Greek TAP) has been paid, cadastre extract, engineer’s Certificate under Law 4495/2017 (on unauthorised constructions), Building Identity, Energy Performance Certificate, Certificate of Uniform Real Estate Property Tax (in Greek ENFIA) for the last five (5) years etc.

With all this evidence at hand, the notary will proceed to drafting the text of the contract, which will include the real estate’s description and ownership history, its particular terms and conditions and finally its acceptance by the child. Last, the notary will post the tax statement for the donation or the parental gift to the website of the Hellenic Independent Authority for Public Revenue.

The procedure will be completed with the parties signing a relevant agreement that must be transcribed or registered in the Register of Deeds or the Land Registry, respectively.

To protect their interests, parents may transfer the bare ownership, keeping the usufruct of the property for themselves until their death. If the property belongs to one of the parents, the parent can retain usufruct both for himself/herself and for the surviving spouse in the same contract (gift by reason of death).

Cases where the property is encumbered with debts of the grantor or where the party receiving the parental gift is a minor tend to be more complicated.

In those cases, you will definitely need an experienced lawyer that will provide you with the best and most cost-effective solution both for the grantor and for the grantee.

A parental grant involving money can either be made by a notarial deed, or by a statement filed to the revenue service of the grantor.

The relevant tax is 10% of the amount granted (deducting the tax-free amount of 800,000 Euros) and the deadline for the statement is six months from the date of the parental gift.

Our experienced legal team, trained in Real Estate and Family Law, has been successfully providing legal advice for more than 20 years in matters that concern Parental Gifts and Donations.