Transfer of Property Acquired through Donation
1. If I had acquired the property through a donation how am I taxed?
We have to distinguish between whether you transfer the property within 5 years or after 5 years from acquisition.
If transfer will occur within 5 years, you may choose either to have the transfer taxed under the old system or at 12%.
The following example shows how you will be taxed if you opt for the 12% final system:
You are selling property for €100,000. The tax will be equal to 12% of the value:
i.e. €100,000 x 0.12 = €12,000
In this case it is not relevant to know the value of the property at the time you acquired it.
If transfer will occur after more than 5 years, the tax will be equal to 12% of the difference between the transfer value and the acquisition value.
The following is an example:
The value of a property acquired through donation in 1985 was €20,000 and is now being sold at €100,000
Tax is calculated as follows:
0.12 x (€100,000 - €20,000) = €9,600.
The only deduction allowed is in respect of brokerage fees, which have to be supported by receipts. The name of the broker must be included in the contract and a copy of the receipt must be attached thereto.
The foregoing can be summarised as follows: