It is not recommended to register a property in the name of a family member if the goal is to cheat the tax authorities (Photo: ShutterStock)
To the question of when it is recommended to register a property in the name of a relative and how the move can be made proper, lawyer Deborah Calderon, who deals in the fields of real estate and family, answers that first of all, it is not recommended to register a property in the name of a family member if the goal is to deceive the tax authority.
According to her, "This is a very dangerous act and the Tax Authority has the tools and means to investigate the issue, in particular when a person has several properties that are registered in the names of his children."
The main reasons for registering a property in the children's name stem from the desire to save on paying the purchase tax, but this move also has consequences, which she expands on later.
"As a general rule," says Attorney Calderon, "it is recommended to register a property in a child's name only when you want to give him the property as a gift, and the apartment is purchased for the benefit of his living in the property."
Can a parent legally purchase an apartment for the child, register it in his name but withdraw the The rent as a result of renting the property?
"This is an improper move, which lights up a red light at the tax authority, since the property is registered in the name of the child, and hence the property belongs to the child. If the child rented the property, then the rent should be his and not his parents'. If this situation is discovered by the tax authority, After all, the parent will be forced to pay the tax differences between the single owned apartment and the second apartment. In addition, the parent is exposed to fines and attachments."
Are there negative consequences for registering a property in a child's name?
"Definitely. In the past I represented a client whose father registered an apartment in her name, but when her father got into very large debts, the daughter's bank account was foreclosed and she was dragged into many problems due to a debt that was linked to the property. It must be emphasized that the daughter carried these debts even when she did not live in the property and did not benefit from his money The rent. For these reasons, it is recommended to exercise extra caution and not agree to any move in which a property is transferred in your name, especially if the owner of the property is in debt."
If a child received a gift from his parents, is there a way he can protect himself?
"In any case, it is better to pay the amount required for tax purposes and avoid as much as possible false registration of a property for the purpose of tax savings. In addition to this, it is important to consult with a lawyer who understands the field of real estate taxation so that he can assess the possible risks as a result of this move."
When is it better to avoid registering a property in the name of a descendant?
"A person who registers an apartment in his child's name should think about the child's full benefit. Often the ownership of the property does not allow him to enjoy various benefits that the child deserves by virtue of his status, such as tenant price programs for young families that you can participate in when there was never an apartment registered in the name of the participant. Yes, aspects of taxation should be examined such as purchase tax on the child's second apartment and property tax - if in the future the child wants to purchase an apartment, he will not receive the exemption from property tax, because he has two apartments in his name."
However, Attorney Calderon explains that there are two sides to the coin, "because if in the future the parents want to sell the property due to being in debt, they will not be able to do so immediately and will depend on their children who are the only ones who can sign the sales agreement.
If the child is already married and started a family, it is very possible that he will not agree to sell the property, because he will want to keep the property for himself.
Similarly, it is better to avoid transferring an apartment without consideration due to a desire to avoid future tax payments, unless it is a permanent gift for the child, without a desire to return it in the future."
How can the process of transferring the property in the child's name be made proper?
"Actually, the only way to make the move proper is by purchasing a property and passing it on to the child as a gift with the true intention of doing so. In this situation, the parent has to give up in advance the possibility that the rental money from the property will be used for the benefit of the pension. In addition, as I mentioned before, it is important to consult a lawyer The majority of the population believes that transferring the property in the name of a child is a solution that allows paying less taxes, but this is not necessarily true, so it is important to assess the risks and to know that if, God forbid, the move turns out to be improper, the parent will be exposed to fines and attachments, which already make the deal unprofitable. , even before I mentioned the risk to the child, who may bear the debts. Therefore, even a descendant in whose name a property is registered will gain a lot of knowledge and peace of mind if he consults an expert lawyer in the field."
For contact and further details, you can contact by phone
- 072-3100796
to the firm's page on the legal website.
The article is courtesy of Legal Zap.
The information presented in the article does not constitute legal advice or a substitute for it and does not constitute a recommendation for taking procedures or avoiding procedures.
Anyone relying on the information in the article does so at their own risk
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Real estate and real estate
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real estate