Parental help is one of the most common ways to get enough money for the down payment of the mortgage. A contribution that, instead, must be produced following a series of steps. Fotocasa’s blog gives the keys to this contribution.
1. Lend money to your child
In the event that this contribution is a loan, that is, the child will have to repay it; It is an operation that is exempt from the ITP (Patrimonial Transfer Tax). Of course, the self-assessment of the tax (model 600) must be presented, specifying that the operation is a loan between individuals. The term to present it is 30 days from the receipt of the money.
This procedure must be made official through a contract, which specifies that the money received must be returned within a certain period. In addition, the interest on the loan from parents to children to buy a home can be 0%, which must be specified in the contract.
2. Donation from parents to children
If this aid is going to be a donation, the child will have to declare the money donated to the Treasury, which must pay the Gift Tax for the amount received within a period of 30 days after receiving the money. The model that must be submitted to the Tax Agency to declare a donation is 651. In addition, it is worth mentioning that this donation is formalized in a public deed before a notary, in which the conditions of the operation must be indicated, such as bank accounts both origin and destination or the amount donated.