PCC and donations — rules and exceptions

The key rule: donations generally are not subject to PCC, but to inheritance and donation tax. PCC may appear only when the transaction is not a classic donation or has a different legal form. Below we explain how to distinguish this.

PCC vs inheritance and donation tax

A donation is taxed under the inheritance and donation tax act. This is a different regime than PCC. If the transaction is a donation within that act, PCC should not apply.

Donation and tax formalities

In practice the most important are deadlines and notifications. In many cases a donation can be exempt from inheritance and donation tax, but it requires reporting within the proper deadline. That is why for family donations it is worth checking whether you need to file the SD‑Z2 form and how to do it.

When PCC can appear

PCC appears when the transaction is not a classic donation, but e.g., a sale or a loan, even if the parties call it a “donation”. Therefore the content of the agreement matters, not just its name.

Real‑estate donation — the notary’s role

A real‑estate donation requires a notarial deed. In practice the notary helps with formalities, but it does not change the tax regime — it is still inheritance and donation tax, not PCC. If you need details, see Real‑estate donation — formalities.

Car donation — does PCC apply

A car donation is generally a donation and falls under inheritance and donation tax. PCC does not apply unless it is actually a sale. If you are unsure, see PCC on car.

Family donation — exemptions

Many family donations can be exempt, but formal conditions must be met (e.g., reporting within the deadline). This is key because the exemption is not automatic.

Cash donation — transfer method matters

For cash donations the transfer method is crucial. A bank transfer makes it easier to document the donation and meet exemption conditions. This is one of the most common practical requirements taxpayers overlook.

Donation and reciprocal benefits

If the agreement includes any reciprocal benefit (e.g., a “donation” in exchange for a service), authorities may treat it as not a classic donation. Then another tax may apply, including PCC. That is why the real substance of the transaction matters.

Donation of a share or co‑ownership

A donation can cover a share in property (e.g., a share in an apartment or a car). Then formalities and potential tax apply to that share, not the whole. If in doubt, see Family donation — exemptions and tax.

Practical examples of the distinction

• Parent → child (cash donation): generally inheritance and donation tax, often exempt after meeting formalities.
• Unrelated person → unrelated person (car transfer): if it is a donation, still inheritance & donation tax; if in practice it is a sale, PCC applies.

How to document a donation

Safest to keep:

• donation agreement (written or notarial),
• bank transfer confirmation for cash donations,
• documents confirming the value of the donated item.

PCC‑3 for a donation

As a rule, PCC‑3 is not filed for donations. If the office considers the transaction not to be a donation, it may challenge the settlement. When in doubt, review PCC — basics.

Most common mistakes

• confusing donation with sale,
• missing formalities for family donations,
• assuming PCC always applies.

Donation checklist

• confirm the transaction is actually a donation,
• choose the proper form (written / notarial),
• check reporting obligations and deadlines,
• keep transfer confirmations (e.g., bank transfer).

How to calculate PCC if it does apply

If the transaction is nonetheless taxed with PCC, you can use the PCC calculator.