Publication date: 07.06.2024
lawyer, 23 years of experience in enforcement.
When receiving property as an inheritance or donation, the heir is responsible for paying personal income tax (hereinafter - personal income tax), and it is based on the estimated value of the property received by him (clause 163.2. 2 of the Code of Civil Procedure).
When purchasing property, the tax payer is the buyer, and the object of taxation is the income from the sale of the property (clause 163.1.2 of the Code of Civil Procedure).
The estimated value of real estate received as a gift, or income from an individual who sold his apartment, was taxed with a military levy at the rate of 1.5% (clause 16-1 of the Transitional Provisions of the Civil Code).
When the mother's ownership of the apartment is transferred to her son or daughter, the following tax effects arise.
A gift, which is an object of immovable property, is transferred to an individual by another individual. This natural person is subject to the rules of taxation of natural persons regarding inheritance (clauses 174.1, 174.6 of the Code of Civil Procedure).
Any object inherited by an heir from a testator who is not a resident is subject to personal income tax at the rate of 18%.
Non-resident heirs are required to pay personal income tax on the value of the inherited property before its notarization (paragraphs 167.1, 174.2.3 of the Code of Civil Procedure).
The purpose of income taxation as a type of inheritance is to assess the value or market value of the object (clause 174.8 of the Code of Civil Procedure).
If the recipient were a native of Ukraine, he would have a personal income tax rate of 0% and would not pay any tax (clause 174.2 of the Civil Code).
Family members of the first and second degree of kinship are parents, spouses, children, brothers and sisters, grandparents on the maternal and paternal lines. These persons belong to the first and second degrees of kinship (14.1.263 of the Civil Procedure Code).
If the recipient of the first or second degree of kinship is not a resident of Ukraine, he is obliged to pay personal income tax at the rate of 18% of the value of the real estate object being assessed, as well as at the rate of 1.5% of the tax.
When a mother transfers ownership of her apartment to a foreign-born son or daughter, the following tax consequences arise.
Income from the sale during the tax year of the first ownership of real estate, which has been owned by the seller for less than three years, is subject to personal income tax at the rate of 5% (clauses 172.2, 167.2 of the Code of Civil Procedure).
The purpose of taxation of income from the sale of property is the price specified in the contract of sale, but it cannot be less than the value of the object, determined by the electronic value determination module of the Unified base of valuation reports, or it must not be less than the market value of object, determined by the subject of evaluation activity in accordance with the law and documented in the evaluation report (clause 172.3 of the Code of Civil Procedure).
If the mother-seller has owned the apartment for less than three years, she must pay personal income tax at the rate of 5% of the appraised value of the property, plus social insurance at the rate of 1.5%.
The income received by the seller from the sale of a residential building, apartment or its part, room, garden (cottage) house, land plot under them, which have been in his ownership for more than three years, is not subject to personal income tax and personal income tax (clause 172.1 of the Code of Criminal Procedure). The requirement that this property must be owned by the seller for a period of time exceeding 3 years does not apply to immovable property that he inherits.
Given the above, it is the most beneficial in terms of tax savings, unlike a gift, it is a sale, not a gift.
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