OPA Magazine, October 17, 2011
Q: What is a parental gift?
A : In essence it is a gift from parents to their children. One of the fundamental principles of Greek Civil and Tax Law, is the protection of the family and the supply of adequate assets to children from their parents in order to assist them towards the creation or the maintenance of their own family or their financial independence, or business set up.
Q: How is it effected ?
A: Orally, unless real estate property is included, in which case the execution of a Notarial Deed (Simvoleografiko eggrafo) is necessary – by both parties, as well as its subsequent registration in the competent archives of the competent Land Registry (Ypothikofilakeion) and/or Land Registry Cadastral (Ktimatologio) of the property’s location.
Q: Can I request a parental gift from my parents?
A: Greek Law regulates Greek Parental Gifts favourably. However, in no way, the children have the right to demand such parental gift, by claiming the gift through court proceedings.
Q: Is there a favourable tax treatment for parental gifts?
A: Yes, a parental gift is not taxable if the (tax) value does not exceed 150.000 €. If the value of the property exceeds 150.000 €, then the tax escalates from 1% up to 10% of the value above this limit. Tax payment may be made in 12 equal instalments. Each instalment cannot be less than 500 €.
Q: What is this “tax value” that the parental gift tax is calculated upon?
A: Pre-set values that the Greek Tax Authority has indexed almost all real properties in Greece. Usually it is lower, if not much lower than their actual market value.
Q: Can a parental gift be revoked?
A: Yes, in case the grantee has proven to be ungrateful toward the grantor or to the grantor’s spouse or to any other of his close relatives and especially, if he has not fulfilled his obligation to provide support to the grantor. Such revocation is only performed through a statement of the grantor to the grantee. The revocation is excluded in case that the grantor has forgiven the grantee, or if a year has passed since the time that the grantor became aware of the reason for revocation, without proceeding with same. Finally, the revocation of the Greek Parental Gift, is prohibited when the gift has been performed due to legal or moral obligation.
Q: I want to proceed with a parental gift to my daughter, but I wish to keep the right to collect the rents. Can this be done?
A: Yes, you may convey only the remainder [or naked ownership (‘’psili kiriotita’’)] and for you to keep the life estate (‘’epikarpia’’). In this case:
- The parent retains the right to use and enjoy the property for as long as he lives
- The child pays less tax since the taxable value of the parental gift is lower.
- After the death of the parent, the naked ownership (‘’psili kiriotita’’) of the child, will automatically unite with the life estate (‘’epikarpia’’) in full ownership, without the probate of the estate or any other procedure required.
Q: What are the relevant costs involved?
A: The costs include the tax, the notary public’s etc fees and the cost for the registration of the Deed at the Land Registry. They can all be calculated before-hand so you have a clear picture of all the necessary expenses
Q: If I convey my property in Greece to my children through a parental gift, do I have to draft a Will (for my Greek property) as well?
A: No, your children will acquire Title at this stage and thus you will save them from greater suffering, confusion and tax complications in the future.
Q: My children and myself live in Australia. How can a parental gift to them of my property in Greece be effected?
A: It may be accomplished through a limited Power of Attorney to a specialised Greek lawyer, like our Greek firm.