What is the most cost-effective way to transfer the parents' house to their children?
Inheritance:
Theoretically, it is the least tax to leave the property to children through inheritance, and this process only needs to pay a small registration fee and stamp duty. In essence, the difference between inheritance and sale is not very big, but inheritance can only be carried out on the premise that the owner of the property has died. After the death of parents, it is very troublesome to handle the transfer procedures, and the inherited real estate transaction will generate 20% personal income tax. Therefore, the inheritance method is laborious and expensive, and is generally not used.
Buying and selling:
The way of buying and selling is straightforward, leaving no future trouble. Real estate transactions between immediate family members do not need to bargain, but only need to pay stamp duty, deed tax and business tax according to the assessed price of local tax, and the cost is not much. First, if the transaction mode of the house has been five years since the last time, and the area of the house is less than 140 square meters, the business tax will be exempted and only 3% deed tax will be paid. If the building area exceeds140m2 or less than 5 years since the last transaction, the business tax will be uniformly levied at 5.6%. 20% personal income tax will no longer be generated in future transactions for the property transferred through sale.
Gift:
The gift method is simple and convenient, and the gift between immediate family members only needs to pay stamp duty and deed tax, and the cost is not much. The taxes and fees to be paid for the "gift" of real estate include deed tax, notary fee and registration fee, the most important of which is deed tax, which is 3% of the appraised house price, generally 3% of the market price. You can use this method if you are considering leaving the property for your own living or renting. But this method is not suitable in the future, because the donated property will generate 20% personal income tax when trading.