Donations can involve both movable and immovable assets, and in this article, we will focus
on the latter.

From a legal perspective, the donation of a property is a gratuitous contract with real effects,
where the right of ownership is transferred by the mere expression of consent and does not
require delivery, which is instead provided for donations of modest value.

How to Donate a Property:

• To carry out the donation, the notary must verify the ownership of the asset, the
  existence of any mortgages and foreclosures, as well as certify the conformity between
  the cadastral registration and the results of the municipal registers.

Furthermore, in the case of:

• a house or an apartment; cadastral data, conformity of floor plans, and possibly, if
  requested by the notary, the EPC (Energy Performance Certificate) must be indicated.
• a plot of land; the Urban Planning Certificate must be indicated in the deed.

Afterward, the transcription, registration, and transfer of ownership of the property can proceed.

Advantages of Property Donations

In Italy, property donation is a widely used practice, especially in family relationships, because,
from a fiscal point of view, there are very broad allowances that lead to exemption from donation
tax. Therefore, it can be more convenient than selling, especially for succession planning purposes,
as it allows assigning one or more properties to future heirs using a currently favorable tax
regime for donations, which provides, for example, in a direct line, an exemption of 1 million
euros.

In the case of a donation of immovable property, the donor does not bear the same
responsibilities provided by law in the event of a sale: for example, they have no obligation to
remedy any defects in the asset.

How a Donation Can Become Risky

On the other hand, however, it is also true that a donation, unlike a sale, does not render the
transfer of the ownership unchallengeable. In fact:

the beneficiary remains exposed to future actions by the donor’s heirs for

• 10 years from the opening of the donor’s succession
• 20 years from the transcription of the donation

Theoretically, even third-parties who have purchased the property from the donee are
exposed to action by the heirs for 20 years.

If a loan is needed and the donated property is offered as mortgage collateral, the bank might
not accept it, and similarly, it might refuse to grant the mortgage to the buyer of a property
originating from a donation by the previous owner.

What Can and Cannot Be Donated

• the right of ownership over the immovable asset;
• other real rights over the asset, such as usufruct or surface rights.

Donation with Reservation of Usufruct

Donation with reservation is often used, meaning the donor transfers ownership of the asset but
reserves the usufruct: for example, an elderly parent gives the house to their child but retains
the right to continue living there for life.

Costs of Donation

• Notary fees, starting from €2000.
• Taxes (registration, stamp, donation, mortgage, and cadastral) of which:
• registration tax at a fixed rate of €200.00,
• stamp duty at a fixed rate of €230.00,
• mortgage tax at a rate of €90.00.
• Mortgage tax equal to 2% of the property’s value.
• Cadastral tax of 1% of the property’s value.

Therefore, assuming the donated property has a value of €€€250,000 euros, the following must
be paid:

• €5.000 in mortgage tax (2%)
• €2,500 in cadastral tax (1%)

On the other hand, if the donation concerns the “first home“, taxes are due at a fixed rate of
€200 each (€200 for the mortgage tax and €200 for the cadastral tax).

Why Discuss it with a Wealth Advisor

While inheriting real estate assets is a welcome and positive event, it is not always guaranteed
that such assets are truly estimable, profitable, and free from problems. Discussing it with
someone who can rationalize its value and integrate it into a broader project, including other
asset categories (especially financial ones), can therefore be very useful and allows for the right
vision to define the best strategy to undertake.