TAXATION

Parents’ gifts now tax-free

The new ENFIA will likely incorporate the supplementary property levy as of next year

parents-gifts-now-tax-free

The Finance Ministry on Monday confirmed the details of how the exemption of parental concessions and donations from tax will apply, as announced last Saturday by Prime Minister Kyriakos Mitsotakis, while preparing for the new Single Property Tax (ENFIA).

As of October 1 each taxpayer will be able to transfer to their first-degree relatives assets and realty worth up to 800,000 euros without paying any tax, Deputy Finance Minister Apostolos Vesyropoulos said. He added that the measure is meant to facilitate the transfer of assets mainly by living parents and grandparents, so that young people can undertake the management of those assets and the responsibilities entailed.

For instance, a father could concede assets worth up to €800,000 to his children, while the children’s mother could also give them another €800,000.

Meanwhile the ministry is working toward the merging of the supplementary property tax with ENFIA. Sources say the new ENFIA will be based on a new set of property brackets, and the hard part will be making it more fair, with owners paying less tax. The ENFIA will be calculated separately for each property based on the new brackets that will incorporate the supplementary tax too. For properties worth more than €250,000-€300,000 the tax will grow, depending on the zone rates and other features that determine its value.

To date, owners of properties worth more than €250,000 have paid a supplementary tax of 0.15-1.15% of their asset’s value.

The same sources said an owner with 10 properties worth €50,000 each (a sum of €500,000) will pay less property tax than a taxpayers owning one asset worth €500,000.

“We are proceeding with the reduction of the ENFIA calculation rates that will apply as of 2022,” Minister Christos Staikouras stated on Monday, adding that the results of the ongoing exercise will be available by the end of the year. He added that the exercise is aimed at the fairer distribution of tax dues, with a parallel reduction of ENFIA for the majority of citizens.