You want to be in 2014 or 2015 to sell your home to a child or your children, but how to do this transfer fiscally smart and you have the right to do? With the sale and transfer of your property, you can pass on power to your children and so save tax. You can sell subject to tenancy, sell, subject to usufruct or full ownership. But then at a bargain price gladly. What is the tax result, what are the tax implications? Use the gift exemption of 100,000 euros.
Sell the house to a child when you want to move to smaller, is obvious. But you can also sell your property on the condition that you remain in the house as a tenant or using the right of usufruct. If you are the tenant, we talk about sales subject to a tenancy and usufruct over the transfer of the bare ownership of the property. Whatever you do, check with the tax authorities and sets a number of conditions. If the sale is for too low a price, a part of the transfer will be seen giving gift tax must be paid as a donation. In all cases is also due 2% transfer tax, you will have to go to a notary to arrange the transfer of the house. The transfer tax can be offset.
In this case, if you sell your own home and you will be the new tenant of the property. The advantage of this way of transmission of the house is that:
You in determining the purchase price may go out of the house still occupied. That means a lower price and thus directly benefit your son or daughter. Depending on your age, the value still occupied 60% to 80% of the empty value in uninhabited condition .;
You do not need to move, but nice to stay in your home;
You can use the annual exemption to donate;
You no longer have to pay for the upkeep of the house nor the taxes for home owners.
The advantage of the lower price is an advantage for your child. What is a reasonable price, let you determine the best by appraisal. You can then choose to have your child the purchase price remain partly guilty to you so they can get relatively cheap through annual donations in the possession of the home. You can leave your children or ask for a remuneration that you can then set off again with the price you will pay. An interest-free loan is not advisable, because the IRS sees it as a donation. You remain in the home, but if you would leave the house, the property can be sold by your child for the empty value. If you die while you still live in your rented home, it acquired part of the house is not part of the inheritance. This is different from sale while retaining the usufruct.
You can also transfer a portion of the property to your children, the so-called bare ownership. In that case, you retain the usufruct of the house. Again, there are opportunities to transfer power to your posterity and to remain committed some of the payment. To gain exemptions for the children to give the relatively cheap property in possession. There is an important difference with the case of sales while maintaining tenancy law. If you die while you live in the house, the usufruct lapses. About this usufruct, the kids inheritance tax due. This is due to the new fiction provision of the Inheritance Act as in force since 2010. They must therefore since 2010 to pay taxes on the gains to the entire property. You leave the house and gives you the usufruct of a child or children, then they have to pay gift tax on this gain. Of course, insofar as its value exceeds the applicable exemptions. This is still to be a way to determine when the transfer of the bare ownership of the right of use and occupation ends at your death or when you leave the house sooner. That does lead to the tax value is higher than the bare ownership. The notary can inform you about this further.
If you are selling your home to a child, you must repay with the proceeds of selling your home. You do not need a mortgage and of course no more mortgage interest. For your child or children is that if they take out a mortgage on the house mortgage for them can only be deductible if they also live in the house. Before you apply that value, which is the sales price minus mortgage, becomes part of your assets in Box 3 of the income tax.
Sell your house on a child in many ways. In all cases you will need along the notary. This provides the ability to transfer a house relatively cheaply to offspring, while it continues to live in the house. Relatively cheap, because the tax authorities can not overdoing it up again. There are indeed rules and conditions that you must consider.