Do you own a property and would like to share it with your child, if possible for free? A very laudable intention … which is not without impact, however. This is why Sarah, a reader of Capital, questions the experts of the “Great savings meeting” (Capital / Radio Patrimoine). Our Internet user, who has acquired an apartment, intends to make it available to her child and wonders to what risks she is exposing herself to, and in particular if this act can be reclassified as a donation by the tax authorities. Stéphane Absolu, associate director at Pyxis Conseil, confirms this to him: “Yes, there are indeed consequences.” But what are they?
It is first of all essential to specify that our owner who wishes to house his child – elsewhere than in his main residence – has two options: she can choose to rent her property to her child, with a market rent, not reduced. “It will then be able to deduct the charges (works, property tax, loan interest, etc.) relating to this apartment,” explains Stéphane Absolu. Another consequence: it will be the taxation of property income that will apply if the apartment is bare, or the taxation of industrial and commercial profits (BIC) if it is rented furnished. With this solution, however, the child will “not be able to benefit from housing assistance”, warns our expert.
Another possibility is to provide accommodation for your child, free of charge. In this specific case, Stéphane Absolu “advises to regularize a document to make this provision in writing free of charge”. But this is not enough, because at the time of inheritance, any other children can claim that they have been disadvantaged… and request a requalification of the provision as a donation. Another pitfall: “If the child already has a salary, there is a risk of requalification as a donation by the tax authorities”, warns the specialist. Finally, the advantaged child will still not be entitled to housing assistance. On the other hand, if our reader opts for this solution, it will allow her to “deduct alimony from her income”, an advantage which amounted to 5,959 euros per adult child for the income tax of 2020. Again, beware : “The child must no longer be attached to his fiscal household (Sarah’s editor’s note) and that he is not in a situation where he can meet his needs,” warns Stéphane Absolu.
But then, what to choose to optimize your taxation? “There is no right or wrong solution,” comments our expert. It is necessary to analyze the situation of the parent and the child, the marginal tax bracket, the charges that can be deducted, the salaries of the child and the parents, to determine whether it is more interesting to be in a rental with deduction of charges or in a provision free of charge with deduction of alimony. ”
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