How to donate money to buy an apartment

A monetary deed of gift may have certain conditions of acceptance and purposes of execution.

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A money gift agreement allows close relatives to financially support their child and help him buy an apartment. A trust deed of money is most often drawn up by parents in order to protect the individual property of their son or daughter who is married. But in practice this is not so easy to do.

What is a special purpose gift agreement?

This is an agreement according to which one person (the donor) undertakes to transfer free of charge funds to the property of another (the donee) for the implementation of certain goals. This transaction is practically no different from a deed of gift. It is unpaid and free of charge.

The donor does not set the conditions for accepting the money and does not require a gift in return.

Property under such an agreement becomes the property of the person to whom the gift is made. But the agreement is targeted, so you won’t be able to use the money at your own discretion. The donor alienates them for a specific purpose that the recipient needs to achieve.

Donation of funds (money)

consensual requires a mandatory written form , according to which the donor promises to transfer the gift free of charge to his close relative after a certain time, timing the gift to coincide with some important event in his life, for example, a wedding, the birth of a child, graduation from an educational institution, etc. .

This article will tell you what needs to be done to donate an apartment or a house, and how much it costs to draw up a deed of gift. What is donation? Before moving on to the question of the cost of registering a deed of gift for an apartment, I would like to describe in general terms the essence of the donation process. So, a donation is a transaction in which one party (the donor) transfers to the second party (the donee) any property belonging to it (we will talk about an apartment or a house) into ownership free of charge. Participants in the transaction The Civil Code of the Russian Federation specifies a number of restrictions regarding the parties to the transaction. Thus, minors and incapacitated citizens, as well as their representatives, cannot act as a donor.

essential terms of the agreement

The essential terms of a contract are those without which it cannot be concluded. In relation to gift documents, the condition regarding the subject of the gift will be essential.

The subject of the agreement in contracts on the targeted alienation of funds is money in a certain amount. The transfer of funds is formalized by signing a receipt. The money is considered transferred from the moment the receipt is signed.

what is written in the sample

Typically, a targeted donation agreement consists of the following sections:

• information about the parties to the agreement and their expression of will;
• gift item;
• rights and obligations of the parties;
• confidentiality;
• dispute resolution;
• duration and termination of the contract;
• special conditions and final provisions;
• signatures of the parties.

The section on the subject of the agreement specifies the amount of money donated and the purposes for which it is alienated. The moment of actual transfer of money is indicated. The second section outlines the rights and obligations of the parties.

sample agreement for the donation of funds.

completed sample receipt for receipt of money.

In the case of a targeted transfer of money, the basis for termination of the transaction may be the misuse of the gift. If the agreement is cancelled, the donee cannot claim to challenge this fact.

The recipient has the right to refuse to accept the gift at any time in writing. And the donor may refuse to fulfill his promise.

Refuse if, after the conclusion of the transaction, his financial situation or standard of living has decreased significantly. The initiator of the transaction can cancel it if certain conditions are met (Article 578 of the Civil Code of the Russian Federation).

The confidentiality section provides for non-disclosure of data and terms of the transaction. Regarding the resolution of disputes, the procedure is quite simple: the contract states that the parties must initially resolve their differences through negotiations, and if this does not help resolve the conflict, then such disputes pass into the hands of the court.

The article: “Money Gift Agreement” will inform you on how to draw up a money donation agreement. How much does a deed of donation of an apartment cost from a notary, read here.

The contract for the targeted gift of money comes into force from the moment of its conclusion. Terminates after the parties have fulfilled all obligations.

Agreements of this kind can be terminated early by agreement of the parties or on legal grounds. In the final paragraph of the document, the parties undertake to resolve all unforeseen problems within the framework of the law, as well as make changes to the agreement in writing.

A mandatory addition to the monetary deed of gift is a receipt.

The receipt is drawn up in two copies. In it, the donee confirms the receipt of money in the specified amount for the implementation of certain goals.

Notarization

Most often, concluding an agreement between close relatives is not accompanied by difficulties. The document is drawn up only if the parties wish. Finding a template is also not difficult. It sets out the rights and obligations of the parties. In particular, the donor undertakes to transfer a certain amount of money, and the recipient undertakes to spend the gift for specified purposes. For example, they need to be used to purchase property or pay for a service.

Citizens can use the services of a notary or lawyer only at their own request. But if you intend to transfer a large amount of funds, then it is better if a notary is present when transferring the money as a gift. The notarized form of the agreement will help to avoid attacks from another relative, for example, the spouse of the recipient.

If the following conditions exist, the transaction is notarized:

• identification of the parties;
• presence of both parties to the transaction;
• availability of the specified amount;
• payment for notary services;
• the amount should not be higher than 10 minimum wages.

Readers are also interested in whether it is possible to challenge a deed of gift? Yes, this is possible if certain circumstances apply, including:

• the recipient of the gift made an attempt on the health (life) of the donor himself/his relatives;
• intentional deprivation of life (if the donor dies from the actions of the recipient, then the heirs can challenge the transaction);
• transfer of money from an individual entrepreneur (a legal entity to an individual), if the transfer took place six months before bankruptcy.

Termination of a transaction may also occur under the following conditions:

• child's refusal of parental money;
• the donor survives the recipient;
• the financial situation/standard of living of the donor has deteriorated significantly.

If the agreement is concluded between relatives, how will the procedure go? There are no differences when concluding a transaction between close relatives and strangers. But there is one significant relaxation: if the transaction is concluded between close blood people, ancestors and children are considered to be them, then you do not need to pay income tax.

In a standard situation, the recipient will have to pay 13% of the amount, this is personal income tax. In this case, a declaration is also submitted to the tax office. All participants pay a state fee for notary services.

We invite you to familiarize yourself with the Electronic Agreement and its legality

what is the tax rate

Income in cash and in kind, which is received from individuals as a gift, is not subject to personal income tax (Article 217 of the Tax Code of the Russian Federation).

In this case, we are not talking about exceptions to this rule:

• apartments;
• cars;
• shares;
• shares;
• share.

Targeted donations of money will not be subject to personal income tax, regardless of who the parties to the agreement are. The parties to the deed of gift may not be relatives, but the agreement between them will still remain non-taxable.

judicial practice on the agreement of donation of money for the purchase of an apartment

The parties to the contract try to resolve all difficulties and issues without going to court. Especially if the donors and recipients are close relatives. But there are cases when it is impossible to do without the intervention of the court.

One example of such a situation is the following case. The crux of the matter: the parents decided to give their son money to buy an apartment. The deal was completed according to all the rules, the son accepted the gift and signed a receipt.

Three months after signing the contract, the parents filed a claim for forced termination of the deed of gift.

a car donation agreement can be found in the article: “Sample car donation agreement.” Find out a lot of information about the dacha donation agreement here.

This article will tell you how to draw up a donation agreement for an apartment with the right of lifelong residence of the donor.

The basis for this was the fact that the donee did not fulfill the terms of the agreement and the receipt. The money was not used for its intended purpose and the apartment was not purchased.

Court decision: the court decided to satisfy the donors' demands in full. From the point of view of the practice of considering cases regarding forced termination of deeds of gift, this case can be considered an exception to the rule.

Any agreement can be forcibly terminated only if one of the parties does not fulfill it. As such, the deed of gift does not establish financial obligations in relation to the donee.

The gift agreement is gratuitous, but the agreement on the targeted alienation of money has certain conditions that must be observed. The money had to be spent on buying an apartment. It was for this purpose that the donee signed the receipt.

Another case in judicial practice concerned the cancellation of earmarked gift money. The crux of the matter: the father gave his daughter money to buy an apartment. The agreement was fulfilled and the recipient purchased the apartment. A year after that, she died. The father filed a lawsuit demanding the cancellation of the deed of gift on the basis of Part 4 of Art. 578 Civil Code of the Russian Federation.

Article 578 of the Civil Code of the Russian Federation gives the donor the right to cancel the agreement in the case when he outlives the donee.

The court's decision was to dismiss the claim. The transaction was completed by the parties. The recipient bought an apartment. At the time of filing the claim, the deceased’s legal heir did not have the subject of the transaction.

The agreement was concluded in relation to a certain amount of money, and the apartment that was purchased became, moreover, the joint property of the spouses.

A targeted donation of money for the purchase of an apartment is an excellent alternative to a gift for real estate. A targeted donation allows you to donate money to purchase an apartment and avoid taxation.

A gift expressed as a monetary amount is not subject to personal income tax.

Gifts for real estate are not subject to personal income tax only between close relatives. Distant relatives or people who are not related must pay personal income tax in the amount of 13% (for real estate alienation agreements).

Therefore, for parents who want to initially purchase real estate and then give it to their child, it is easier to transfer money to them using a trust deed of gift.

This document is drawn up in simple written form and does not require registration or notarization.

Features of the transaction in 2020

A contract for the transfer of funds can be drawn up independently without the involvement of third parties. However, in order to avoid making mistakes during registration, you need to know the standard sample. Thus, the general content of the agreement should include the following items:

• place and date of registration;
• personal information about the participants in the transaction: last name, first name, patronymic, passport details, registration address and indication of status within the transaction (donor or donee);
• subject of the contract. The amount of funds that must be transferred to the donee after signing the agreement is specified;
• the rights and obligations of each of the parties to the transaction;
• mechanism for resolving disputes;
• signatures of the parties.

Additional provisions may be specified in the Addendum. Eg:

• if the agreement is concluded between close relatives, this fact must be indicated in the personal information;
• if notarization is required, there should also be a clause about this;
• if money is transferred to make a purchase, you need to indicate a specific object as the goal.

If you have any doubts about the correctness of the document, it is better to contact a notary.

In general, no significant problems arise when preparing the document. The transaction procedure is standard and not complicated. Still, before drawing up a deed of gift, it is important to consider the requirements and recommendations. Even if the transaction is carried out between close relatives, it cannot be denied that in the future one of the parties may try to challenge the agreement.

A target agreement regarding the transfer of money can be drawn up in simple written form (Article 574 of the Civil Code of the Russian Federation). Such an agreement cannot be concluded orally, since it is consensual and contains a promise to transfer money in the future.

The following documents will be useful:

• passports of the parties;
• identification codes;
• receipt.

A receipt is a mandatory addition to such an agreement. The actual transfer of money will depend on its signing. The parties can apply to a notary for certification of the transaction, although this is not necessary, but the documents for registration of the deed of gift will remain unchanged.

A deed of gift for money can be formalized in simple written form. This means that the money donation agreement is not subject to registration or mandatory notarization.

But in order to minimize possible problems in the future, you can contact a notary for confirmation of the transaction. And also pay for the preparation of the draft deed of gift in a law firm.

Table. Total costs for completing the transaction.

Obviously, contacting a notary and a lawyer can cause additional costs in a significant amount. Close relatives can do without these expenses, and people who are not related have the right to choose one thing to save money.

It is difficult to say which will be more profitable. You can simply draw up a legally correct contract and not go to a notary. You can contact a notary with your draft document and its certification will cost almost the same as drawing up the deed of gift itself.

But it is necessary to take into account the fact that the notary does not thoroughly check the correctness of the agreement, so if you pay for someone’s services, it is better to pay for those related to the drafting of the agreement.