Gift tax for real estate
Dear Sir or Madam,
I am writing to inquire about the gift tax related to a property.
My uncle, who is not directly related to me, meaning that a 30% gift tax is applicable, wants to gift me a condominium. The estimated market value is about 200,000 euros.
Conditions for the gift:
If I ever sell the apartment, my sister will receive 40% of the proceeds (only 40%, instead of 50%, as compensation for the gift tax I have to pay). This obligation will also pass on to my heirs and will cease with the death of my sister.
My uncle, who is 80 years old and in robust health, retains the usufruct until his death.
It is unclear what value the tax office will assign to the property. According to the local tax office, there are not enough comparable data to calculate the market value, and based on the lawyer's experience, a value of 2/3 of the market value is typically used.
At this time, it is completely uncertain whether I will use the apartment myself or sell it at some point.
I would appreciate your advice on how to structure the gift contract to minimize the gift tax.
My considerations:
The present gift contract will be supplemented by a "gift chain," meaning my parents will each receive a share of, for example, 15% of the apartment as a gift and then transfer their shares to me in, for example, 2 years, completely voluntarily. (15% because this roughly corresponds to the tax-free limit of 20,000 euros).
My minor daughter will also receive a share of the apartment that is roughly equivalent to the tax-free limit of 20,000 euros.
Would it be more favorable in terms of gift tax if my sister receives 50% of the apartment right away and I simultaneously receive the usufruct until a possible sale, in line with my uncle's wishes?
I am fully aware of the unfairness towards my sister, and we will find an internal solution to this matter.
Thank you for your advice.
Best regards,
