Real estate: how to help your children to buy new?


Young people also want to become owners. In a gloomy context, parents are often there to support or finance the project of their offspring. The State encourages parents who would like to help their children by facilitating the early transfer of assets via tax-exempt donations.

The donation is the first tax lever to take into account. You give him a sum of money that will allow him to constitute a contribution for his purchase. A great asset to obtain advantageous credit from your bank. Each parent can give up to 100,000 euros per child, every 15 years. A couple can thus give 200,000 euros to each child. These sums benefit from a total tax abatement, completely duty-free, so without paying tax.

If the sum donated is greater than 100,000 euros per parent, the children must pay gift tax on the excess fraction. Donation duties are in principle borne by the recipient, but a parent can request that the donation costs be borne by himself, as the donor. Thus, the child will have nothing to pay.

Each parent, but also each grandparent or great-grandparent, can also give each of their children, grandchildren or great-grandchildren a sum of money in cash in one or more instalments, within the limit of 31 865 euros without having to pay fees. The donation is intended for an adult child and the donor must be under 80 years old. Let us now look at the temporary usufruct donation.

Legally, the ownership of real estate is divided into two distinct entities: usufruct (right to live in it or rent it) and bare ownership (right to sell). One can dismember the property so that two people can hold the property. In general, parents give property to their children by reserving the usufruct (right to live there). But the opposite is possible: giving the usufruct of a specific property over a defined period. The child will thus be able to receive the rents of the property for a certain time and constitute a personal contribution to buy. At the end of the period, the donor automatically recovers the usufruct and the resulting income. A family loan is also possible.

It is also possible to lend an amount to your child who will have to repay it within the time limit. In this formula, the parent replaces the bank and this act must be governed by a contract. Everything must be written there: amount, repayment period, monthly payments, possible interest rate… Be careful, if you lend more than 1,500 euros to your child, you must declare it to the tax authorities, otherwise the loan will be reclassified as donation. It is also possible to invest in Pinel.

In the new, the Pinel device is not to be neglected. You rent the accommodation to your child, if the latter is detached from your tax rent. The terms of the scheme remain classic: new housing must be rented for six or nine years to benefit from a tax reduction. Depending on the rental period, the reduction rate is set at 12% or 18% of the cost price of the building. The commitment can be extended up to 12 years to benefit from a reduction of 21%. The tenant must always respect resource ceilings and the rent is capped.