myPROPERTY: money gifts to relatives and tax

A bank transfer from a parent, grandparent or other relative may be a gift, a parental benefit, payment of living expenses, reimbursement or a genuine loan. The bank records the route taken by the money, not its legal basis. The correct answer therefore depends on more than the transfer description or whether the amount is small: it depends on who gives the money, who receives it, why it is transferred, when the transaction takes place and which documents are available.

The short answer: Since 1 October 2021, a genuine gift of money to a person in tax Category A may fall within the one-off allowance of EUR 800,000 if the transfer through a financial institution can be proven. The allowance is not renewed with each transfer or every year, and a declaration in myPROPERTY does not retrospectively change the nature or date of an earlier transaction. By contrast, genuine small amounts paid for the day-to-day living costs of a dependent child or student are not automatically gifts. The decisive point is whether the true reason for the payment can be demonstrated.

1. A transfer to a relative is not automatically a gift

Under the current Property Taxation Code, any transfer of an asset without consideration is treated as a gift, even if no written instrument has been drawn up. This does not, however, mean that every credit to a relative's account has a donative purpose. The actual economic relationship comes before its tax label.

If one relative reimburses their share of joint expenses, repays a genuine loan or pays a specific expense on behalf of another person, there is not necessarily a gift. The same applies to ordinary living costs for which a parent is responsible. In August 2026, AADE clarified that small amounts sent by parents to children for day-to-day or student needs, particularly where the child is a tax dependent, are not characterised as gifts solely for that reason and do not automatically require a declaration in myPROPERTY.

The clarification does not create a magic "pocket-money threshold", nor does it cover large or repeated transfers intended to acquire assets. Rent, tuition fees and everyday expenses are assessed differently from capital used to buy a home, a car or an investment. During an audit, the overall picture matters: amount, frequency, financial capacity, family relationship, use of the funds and the supporting documents available.

2. Gift, parental benefit, loan or reimbursement?

A gift exists when the donor transfers money without consideration and without an obligation to repay it. A parental benefit is the more specific provision made by a parent to a child to support the child's financial or family independence or the commencement or continuation of an occupation, within the limits justified by the circumstances. Money given by a grandfather to a granddaughter is therefore a gift, not a parental benefit, even though the granddaughter belongs to tax Category A.

A loan entails a genuine obligation to repay. Merely writing "loan" in the bank transfer description is not enough if there is no agreement, repayment schedule or evidence of repayments. For the evidence required and the risks of a family loan, see our guide on when a family transfer is a loan rather than a gift.

A reimbursement occurs when the recipient is repaid money that they previously spent on behalf of someone else. Keep the receipt for the original expense, the agreement or messages explaining how the cost was divided, and the subsequent bank transaction. The larger the amount, the riskier it is to rely only on a vague transfer description.

3. The family relationship matters in both directions

The tax category is determined by the recipient's relationship to the person providing the money. The same family may therefore face a different result when the direction of the transfer is reversed.

Transfer	Legal characterisation	Recipient's category
Parent to child	May be a parental benefit	Category A
Grandfather to granddaughter	Gift, not a parental benefit	Category A
Granddaughter to grandfather	Gift	Category B, because the recipient is a second-degree ascendant
Brother to sister	Gift	Category B
Between spouses or civil partners	Gift	Category A

This is why saying "we are first-degree relatives" is not enough when completing a declaration. The specific donor, the specific recipient and any earlier benefits between the same two persons must be checked.

4. What the EUR 800,000 allowance really means

For gifts or parental benefits to persons in Category A, money transferred through financial institutions is subject to tax at 10% after a one-off amount of EUR 800,000 has been deducted. This is not EUR 800,000 per transfer, per bank or per tax year. Eligible gifts from the same donor to the same recipient are aggregated under the applicable accumulation rules.

If a parent has already transferred EUR 600,000 to the same child under this regime and later transfers another EUR 300,000, a new allowance does not start from zero. The remaining part of the one-off allowance is what matters. A benefit from the other parent, by contrast, is assessed as a different donor-recipient pair.

The favourable regime applies to eligible transfers made from 1 October 2021. It does not retrospectively turn a transfer made on or before 30 September 2021 into a tax-free transaction. Where there is no contract, the tax point is the time when the amount is actually delivered or credited, not the date of a later declaration.

5. The banking trail must be clear

For the allowance to apply, it is not enough for money eventually to appear in the recipient's account. The trail from the actual donor to the actual recipient must be evident. Keep the official debit and credit record, the IBANs, the date, the amount and the payment reference. A screenshot without full transaction details is weaker evidence than a bank receipt or account statement.

Joint account: it must be possible to show who actually provided the funds. Being a joint account holder does not, by itself, answer the question.
Direct payment to a seller: this may be covered by the framework, but it must be clearly linked both to the recipient's purchase and to the debit from the donor's account.
Bank cheque: evidence is required that it was issued by debiting the donor's account.
Cash: depositing it at a later stage does not automatically turn it into an eligible bank transfer.
Intermediary relative: two successive transfers may be treated as two different transactions. An intermediary should not be used to circumvent the true relationship between donor and recipient.

The special administrative treatment for withdrawals followed by redeposits within three working days concerned a specific transitional period in 2021-2022. It is not a current general rule on which a new transaction can rely.

6. Declaring the transaction in myPROPERTY: the practical sequence

myPROPERTY is the digital route for filing the declaration in supported cases; it does not itself decide whether a transaction is a gift, a loan or payment of living expenses. Before data entry begins, the underlying reason must be clear and the evidence must have been collected.

The donor and recipient confirm their tax identification numbers, family relationship, amount, date and method of transfer.
They check whether any previous gifts or parental benefits have been made between the same persons.
The correct transaction category is selected and the banking details linking the two sides are entered.
The documents required by the application or necessary for the particular case are attached.
One party creates the declaration and the other accepts it using their own credentials where the workflow requires this.
After filing, the declaration, the tax assessment and any proof of payment or nil assessment are retained.

Where there is no notarial instrument, the declaration is generally filed within six months of delivery of the money. If a notarial deed is to be drawn up, the declaration precedes the deed. The application and the available amendment workflows change over time, so the current AADE myPROPERTY guidance, rather than an old screenshot, must be followed.

7. Which documents should be retained

A sound file contains more than the declaration. It contains the material that proves the economic reality before, during and after the transfer:

the complete bank receipt or official account statements for both parties,
a document or other evidence of the family relationship where this is not retrieved automatically,
the myPROPERTY declaration, the other party's acceptance and the tax assessment,
a purchase agreement, preliminary agreement, invoice or other document where the money is intended for a specific acquisition,
records of previous gifts between the same persons,
for a loan, a written agreement and subsequent repayment transactions,
for reimbursement or living costs, evidence of the expense, its duration, the family circumstances and the connection between the amount and the need.

The transfer description helps, but it cannot cure an inconsistent case. "Family assistance" may describe many different arrangements. A precise description such as "reimbursement of half of August rent" or "gift of money under myPROPERTY declaration" can be linked more readily to the remaining documents.

8. Money for a home, car or imputed-expenditure coverage

Where the money finances the purchase of real estate, a car or another major expense, the sequence of events becomes critical. The bank transaction, the declaration and the payment to the seller should form a continuous, intelligible trail. AADE has also issued specific guidance on direct transfers from the donor to the seller or developer.

For the purpose of covering imputed acquisition expenditure, it is not enough for a gift to be declared at some later date. AADE Circular E.2009/2025 addresses the timing and evidence required where gifts of money or parental benefits are used to cover objective expenditure. Before a major purchase, the position should be checked before the funds move, not when the income tax return falls due.

9. What happened in the EUR 700 grandfather-to-granddaughter case

Published DED Decision 1798/2026 concerned a total of EUR 700 deposited in small monthly payments from a joint account held by the grandfather and grandmother into their granddaughter's account. The transfers were made in 2021, up to 30 September, before the present EUR 800,000 allowance took effect.

The granddaughter argued that the payments covered her living expenses while she was studying in Chios. The gift declaration, however, was filed on 25 November 2025, after an audit order had been notified on 27 June 2025. On the basis of the declaration and the regime applicable at the time, gift tax of EUR 70 and a penalty of EUR 35 were assessed, for a total of EUR 105. DED dismissed the administrative appeal.

The case does not establish that AADE taxes every payment of pocket money. According to a later public clarification attributed to the Authority, the audit formed part of a wider audit of persons and was not initiated because of the small payments. The substantive lesson is twofold: a transaction is judged under the law in force when it occurred, and a declaration filed by the taxpayer during an ongoing audit is not easily reversed later by giving the transaction a different characterisation.

10. Tax, penalty and interest are not the same thing

Tax follows from the tax category, the amount, the time and the method of transfer. A penalty relates to a filing or accuracy breach. Interest accrues because a tax liability is paid late. There is no single "bank transfer penalty".

A late capital-tax declaration filed before an audit may generally attract a penalty of EUR 100, together with any tax and interest due.
If an audit identifies a failure to file and tax is due, the penalty may be 50% of the resulting tax, not 50% of the amount transferred.
For an inaccurate declaration, the penalty is linked to the tax difference and the relative size of the discrepancy.
Late filing does not, by itself, remove the EUR 800,000 allowance if the original transfer was eligible and can be proven. It does not, however, eliminate the procedural consequences.

Since 2026, a specific exemption from certain late-filing penalties applies where a declaration is submitted on behalf of a minor or concerns a period during which the individual was a minor. The exemption does not automatically cancel the principal tax, interest, a failure-to-file penalty identified in an audit or the consequences of an inaccurate declaration.

11. What to do when a tax assessment has already been notified

The first step is not to rush into filing a new declaration. Record the exact notification date, download the complete assessment and audit report, and request the administrative file. Check which transaction was characterised as a gift, who was treated as the donor, which category was applied, whether the banking trail was accepted, and how tax, penalty and interest were calculated separately.

A challenge to a Tax Administration act must first be brought as an administrative appeal before the Directorate for Dispute Resolution, prior to proceedings in the administrative court. The deadline is generally 30 days from notification and 60 days for residents abroad, and is suspended from 1 to 31 August. The electronic procedure and required files are described on AADE's page on administrative appeals.

The appeal does not automatically suspend the entire liability. As a rule, it is linked to suspension of 50% where the other 50% is paid, subject to statutory exceptions, particularly where the assessment is based on information in the taxpayer's own declaration. A separate application for suspension supported by evidence of irreparable harm may be required. If DED dismisses the appeal or does not decide within the statutory period, a judicial appeal may be considered; the precise deadline and competent court must be confirmed from the notified decision and by the lawyer handling the case.

12. Five examples that show the difference

Student and monthly expenses

A parent sends a reasonable amount each month for the rent, food and transport of a dependent child who is studying. The amounts relate to actual living expenses. They are not automatically characterised as gifts, but it is prudent to retain the tenancy agreement, receipts and clear payment descriptions.

Parent finances a home purchase

A parent transfers EUR 150,000 so that the child can purchase a home. This is a capital provision, not day-to-day maintenance. Before the purchase, the correct characterisation, declaration, review of previous benefits and a complete banking link to the purchase price are required.

Grandfather transfers money to granddaughter

The transaction is a gift, not a parental benefit. As recipient, the granddaughter belongs to Category A and the EUR 800,000 allowance may be used for an eligible bank transfer made from 1 October 2021, after checking earlier gifts from the same grandfather to the same granddaughter.

Granddaughter transfers money to grandfather

Reversing the direction changes the result. As recipient, the grandfather is a second-degree ascendant and falls within Category B. The Category A allowance does not apply automatically merely because the same two people would receive different treatment if the transfer ran in the opposite direction.

Reimbursement of a shared expense

One person paid the full cost of a joint booking, EUR 1,200, and their relative reimburses the EUR 600 share attributable to them. The receipt, the booking and the matching amount document a reimbursement. Without them, a vaguely described transfer is harder to explain years later.

13. Checks before pressing "transfer"

Write one sentence explaining why the money is being transferred and whether it must be repaid.
Check the family relationship in the correct direction and earlier benefits involving the same donor-recipient pair.
For a gift, use a direct and provable banking trail from the donor to the recipient or to the lawful ultimate beneficiary of the payment.
Ensure that the transfer description is consistent with the actual documents.
Do not wait until the purchase or a tax audit to consider the myPROPERTY declaration.
Save the evidence immediately; short-lived mobile-banking views are not a permanent record.
For a large, old or complex transaction, obtain advice before moving the funds, not after a tax assessment is issued.

14. Frequently asked questions

Is a declaration required if no tax is payable?

For a genuine gift or parental benefit, a nil tax charge does not mean that the declaration requirement disappears. Genuine living expenses, a loan or reimbursement are different: they should not be declared as gifts simply out of fear.

Does using IRIS change anything?

IRIS is a method of bank payment. It does not turn a gift into payment of living expenses or a loan into a gift. The underlying reason and the actual facts remain decisive.

Is it enough to write "loan" or "pocket money"?

No. The transfer description is useful evidence, but it is assessed together with the amounts, frequency, documents, use of the money and the conduct of the parties.

If I deposit cash into my relative's account, is that a bank transfer?

Not automatically. For the favourable regime to apply, the financial trail from the donor must be demonstrated. The mere appearance of the amount as a deposit does not prove its source.

Can I file late in myPROPERTY?

Late-filing procedures exist, but the correct action depends on whether an audit has begun, whether tax is due and whether the original transaction was genuinely a gift. A hasty declaration may operate as an admission of facts, so the position should be reviewed before filing.

What should I do if I receive a tax assessment or penalty?

Record the notification date immediately, assemble the file and consider an administrative appeal to DED within the statutory deadline. Do not wait for an answer to an informal request while the appeal deadline continues to run.

15. The safe conclusion

Correct tax treatment begins before the transfer. The family relationship alone is not enough, the bank transfer alone is not enough, and the wording entered as the payment reference is not enough. The true reason, the route taken by the funds, the declaration and the documents must be consistent.

Day-to-day expenses do not require every small payment to become a tax matter. For a gift or substantial capital support, however, the safer route is clear: identify the family relationship in the correct direction, review earlier benefits, use a direct banking trail, file on time where required and retain a complete record. If an audit has already begun or an assessment has been notified, the strategy changes and the deadlines leave no room for improvisation.

Legal notice: This article provides general information based on the legal framework and available administrative guidance reviewed on 23 August 2026. It is not individual tax or legal advice. The reason for the transfer, its timing, the family relationship, residence, earlier benefits, an audit and the documents available may change the outcome.

Official sources and decisions

The legal and tax review of the sources was completed on 23 August 2026.

Photo: Andrea Piacquadio / Pexels. The image is illustrative and the people shown are not connected with any actual tax case.