Is it not cost-effective to donate real estate during your lifetime? Experts Reveal "One Will" to Save Millions in Taxes

Making a pre-will is a good way to prevent heirs from competing for inheritance. However, because elders find it unpleasant to make a will in advance, they often find themselves in the dilemma of "having ideas but no other solution." However, if you consider it from the perspective of tax saving, it may increase the motivation of the elders to make a will in advance.

Zheng Wenzai, director of the Zhengye Land Dealers United Office, mentioned that the mother of one case had two children and two houses in her name. She was getting older recently and discussed with her husband how to donate the house to the two children. He hoped that each of the two children would obtain one household, so that there would be no disputes between the old mother and the old mother a hundred years later.

Since the annual gift tax exemption is only 2.44 million yuan, the two elders decided after discussion to avoid paying gift tax by donating one of the houses to their father through a couple's gift, and then each gifting one to the children. Little did they know that even if the gift tax is exempt from the gift tax, there is also a deed tax of 6% of the current value of the house, and a high amount. Land value-added tax must be paid. In addition, land value-added tax donated by husband and wife is not levied, but not exempt. Therefore, when the father donates the land to the child, the land value-added tax must be calculated from the time when the mother obtains the ownership, rather than from the time when the father obtains the ownership. Therefore, the tax-saving effect is limited, and there is a big gap between the imagined results.

Zheng Wenzai said that because the two houses were purchased about 20 years ago and the other about 30 years ago, the land value-added tax is about more than 200,000 yuan and more than 700,000 yuan, respectively. If you make a gift from a couple and then give it to a child, the gift tax can only be reduced to 0 yuan. However, the land value-added tax totaling nearly 900,000 yuan must still be paid. If you include the cost of the gift from the couple, you will have to pay nearly 1 million yuan.

Zheng Wenzai said that since his mother has two houses under his name and his father has no house, he hopes that the two children will live in one house each. It seems that the problem can be solved by making a pre-will. Looking at the current value of the land and houses of the two households, the total is about 8 million yuan. If there are no other cash, stocks, securities and movables, this should be exempt from inheritance tax, so it is recommended that the wife prepare a valid will.

Since these two houses were acquired before the 105th year of the Republic of China, if the children are now gifted and then sold, it will fall under the new income tax system and must pay the combined real estate and land tax. If it is acquired through inheritance, the future sale will fall under the old system of income tax, and you only need to pay the house transaction income tax. The difference between the two taxes may reach millions of dollars, which is a profit worth considering.