Parental help is one of the most common ways to get enough money for your mortgage down payment. A contribution that, instead, must be produced by following a series of steps. The Fotocasa 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 (Capital Transfer Tax). Of course, the self-assessment of the tax must be submitted (model 600) specifying that the operation is a loan between individuals. The deadline to present it is 30 days from when the money is received.
This procedure must be made official through a contract, which specifies that the money received must be returned within a specified period. In addition, the interest on the parent-child loan to buy a home can be 0%, which must be specified in the contract.
2. Donation from parents to children
If this aid is to be a donation, the child will have to declare the donated money to the Treasury, which must pay the Donation Tax for the amount received within 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 should be mentioned that this donation is formalized in a public deed before a notary public, in which the conditions of the operation must be indicated, such as bank accounts both origin and destination or the amount donated.
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