The Supreme Court on rulings dated as of 14, 20 and 26 March 2019 has clarified how transfers made between co-owners of real estate should be taxed, under the assumption that they are formalised before a Notary Public. In such transfers, the transferee will economically compensate the transferor for his share.
The Supreme court has determined the following:
- Transferring interest on a real estate to another co-owner in exchange for an economical consideration does not trigger transfer tax.
- Transferring interest on real estate to another co-owner is taxed by stamp duty and the tax base is not the value of the whole real estate but only the share that is being transferred as opposed to what the Tax office has been requesting taxpayers.
All in all, good news to real estate owners and those who are intending to transfer their interest on to other family members, friends or partners.