Selling inherited property

Selling inherited property: transcription, taxes and management

Sometimes you find yourself in the situation of wanting to sell an inherited property, perhaps to invest the sum obtained differently.

It is important to know what are the mandatory steps to follow since this type of sale requires some additional documents compared to a common sale of a property: it is, in particular, the declaration of succession and acceptance of the inheritance (with its consequent transcription).

In the meantime, let’s see, in more detail, how to obtain the documents to sell an inherited house.

The declaration of succession and inheritance tax

First of all, the first thing to do is to submit the declaration of succession to the Revenue Agency, a procedure that must be carried out electronically within one year, using their portal. Usually, for the compilation, we rely on a Caf or a professional in the sector, such as a notary. The document includes the list of everything that is the subject of the succession, in fact, with the relative value.

The purpose of this practice is basically to establish the amount of taxes to be paid on the inheritance. If these taxes are not paid, it is absolutely not possible to proceed with the sale of any property received as an inheritance.

As regards the rate to be paid, this changes according to the degree of kinship with respect to the deceased: it ranges from 4% of the cadastral value for the spouse and children, up to a maximum of 8% for lesser relatives. neighbors and for those who are not relatives (even the cohabitant, for example). There are deductibles depending on the case (only for immediate family members).

But that is not all. The inheritance tax, unfortunately, is not the only one to pay when you inherit a property: there are also the mortgage tax and the cadastral tax, whose rates (respectively 2% and 1%) are calculated on the cadastral value. Also, in this case, concessions are provided, for example, if it is the first home.

Furthermore, the payment of stamp duty and special taxes should not be forgotten.

Finally, it is also necessary to take into account the fact that there are, by force of circumstances, notary fees to be paid in order for the entire succession procedure to be correctly carried out.

Transcription and acceptance of an inheritance

As already mentioned, the acceptance of the inheritance is also an obligatory step.

It can be formalized in writing but it can be tacit, which is the most common cause. However, this means that, during the purchase and sale of an inherited property, during the drafting of the deed the notary will also have to formalize this acceptance, with a real transcription: this is why the latter is considered as an indispensable document in the case where you want to sell an inherited property.

Selling a house inherited before age 5

The law provides that, when you buy a property and then resell it without waiting for at least five years to elapse, you must also pay a tax on the capital gain, i.e. on the difference between the established sale price and the value at the time of ‘acquisition. This is a way to avoid speculation on the real estate market.

This rule, however, does not apply in the event that the property has been received following a succession procedure. Basically, the amount obtained from the sale of an inherited property, even if this sale takes place within five years, does not determine any type of capital gain that can be taxed.

To read: today is it convenient to own property?

When the property is inherited by several heirs

It happens quite frequently that the heirs of the same property are more than one, in this case, we speak of co-inheritance. It is not said, however, that everyone acquires ownership in equal measure, it could in fact happen that each heir comes to hold a share different from that of the others. To regulate this particular situation, which can sometimes prove to be a little confused and difficult to manage, it is necessary to refer to the regulations on communion, those contained in the articles of the Civil Code ranging from 1100 onwards.

However, it is not always possible to reach a unanimous consensus, and therefore how do we behave in these cases? Undoubtedly, the first thing to do is to contact an expert on the subject, a lawyer therefore: a professional will certainly be able to indicate the best way to go to arrive at an optimal solution.

Usually, those who are not in favor of the sale of the property or in any case do not agree with the other co-heirs, can choose to sell their share of the property. In this circumstance, it is the other heirs who have the right of pre-emption and therefore who may possibly acquire the share in transfer with priority over third parties. At the basis of all this, there is clearly the need to identify the exact value of the share in question. If none of the other co-heirs is interested in buying this share, then it can be offered for sale to others as well.

The second way to go, generally when every other attempt to find a solution that satisfies more or less everyone has gone up in smoke, is that which involves the dissolution of communion in front of a judge. It will be the latter to make a final decision, establishing the conditions of sale of the property on the basis of the regulations regarding the real estate expropriation, after which it will arrange for the distribution of the proceeds among the various heirs.

Selling a house received as a donation

It seems useful and appropriate to open a parenthesis regarding the sale of a property received as a donation. In fact, it is a rather different case study compared to that of an inherited property, and it is good to be informed about some important things. Even from the point of view of the potential buyer, it is always good to be more than informed and aware of the risks that could be encountered.

The first thing to know is that in Italy the law first of all protects those who are defined as legitimate heirs (wife/husband, children, legitimate ascendants, etc.). They must be guaranteed a part of the inheritance regardless, therefore regardless of the will arranged in the will by the deceased.

In short, the legitimate holders are always entitled to a quota established by law, even if they have been totally excluded from the will. The calculation of this fee also takes into account any donations made by the deceased while he was still alive. Therefore, those who have had property as a donation could in some way have infringed the rights of the legitimate heirs and thus be reduced, if not even revoked, the donation itself. This is why, before proceeding with the sale of a house received as a donation (and before buying one) it is always good to make sure that everything is in order, obviously relying on experts in the field.

It is undeniable that these doubts greatly hold back potential buyers, who are rightly trying to avoid problems. Moreover, even banks tend not to grant mortgages or loans when dealing with properties resulting from some donation. The eventuality that a reduction or even a request for restitution of the property occurs to protect the legitimate heirs a posteriori, causes too many unknowns to gravitate around this type of sale, making them more difficult (you end up not being able to sell this that you received as a donation, or you find yourself having to sell it off at a decidedly low market price in order to get something out of it).

It is certainly possible to be more relaxed on both sides if the donation dates back to at least 20 years earlier or if the person who made it has been deceased for more than 10 years: in these cases, in fact, it can no longer be revoked.

In principle, if already selling a house is almost never a simple thing, even more so, if it is a property given as a donation, it is always absolutely advisable to rely on the advice of an expert consultant in the sector.

Is it better to rent or sell an inherited house?

It is certainly a much-debated topic in general, regardless of whether the property was originally purchased or received as an inheritance.

Let’s say that, in the latter case, after removing the various expenses and taxes we mentioned earlier, if nothing else, a real outlay for the purchase had to be incurred. Everything depends, therefore, on the economic needs of the heir, as well as clearly on the type of property and any other circumstances (state of conservation, size, position, etc.). If you need immediate liquidity, clearly groped to sell the property in the best possible way is almost an obligatory choice, the most obvious.

On the contrary, if you do not have these urgent financial needs, the hypothesis of guaranteeing a periodic income through a rent is absolutely not to be discarded, on the contrary. Nowadays it can certainly prove to be the best choice, especially if the accommodation has certain requirements that can make it particularly attractive for any renters.

For further information: how to rent a house

In this sense, it is necessary to make a distinction between two different types of rent: the more traditional one, which consists in finding someone interested in a prolonged stay (families, etc.), and the one, on the other hand, more oriented towards temporary solutions: accommodation to rent. for holidays (clearly, they must be located in tourist locations and strategically positioned), or apartments for business travelers, the military, off-site university students, and so on. This second option (especially the tourist one) usually offers higher but less certain, less continuous monthly income.

It is, therefore, a choice certainly dictated by circumstances but, in some way, also dependent on the subjective preferences of those who inherited.