When we talk about the donation of real estate, we are referring to the contract whereby a person, the donor, transfers in a spirit of liberality and free of charge their property or other rights to another person, the donee.
Donation, what the Civil Code says
Article 769 of the Italian Civil Code states: "A gift is a contract whereby, in a spirit of liberality, one party enriches another, disposing of a right in favour of the latter or assuming an obligation towards the latter". There are therefore two elements that characterise a donation. These are the spirit of liberality and the enrichment of the donee.
How does the donation of real estate work
The donation of real estate takes place by means of a contract by which the two parties agree. There are frequent cases of donation of real estate, for example the case of a father giving his house to his son.
The parties involved in the donation of real estate are the donor and the donee. And the types of donation that can occur are direct and indirect. In particular, the direct donation of real estate consists of the formal act received by a notary in public in the presence of two witnesses by which the donor deprives himself of ownership of the property and transfers it to the donee without receiving any consideration. In the case of the indirect donation of real state, on the other hand, the transfer of the property from the donor to the donee takes place with the purchase by the donor of the property, which is then directly registered in the name of the donee. This is the case, for example, of a father buying a house and putting it in his son's name.
The direct donation of a property must be made by public deed and in the presence of two witnesses. As a contract, the donation consists of a proposal by the donor and an acceptance (which may be simultaneous or deferred) by the donee.
Donation of a property, what documents are required
When it comes specifically to the donation of a property, the notary must carry out the mortgage and land registry searches to verify the ownership of the property and the existence of mortgages or foreclosures, for example, and must then certify the conformity between the cadastral header and the results of the public land registers. In the specific case of a house or a flat, the deed must then indicate the cadastral data, the conformity of the plans deposited at the Land Registry with the actual state of the property and the details of the planning authorisations. At the end of the donation, the notary must then proceed with the transcription of the deed in the public land registers, registration and transfer.
Donation of real estate, the cost
The donation of real estate involves the payment of certain taxes of varying amounts. The relationship between donor and donee is decisive.
In particular, for donations of real estate in a straight line, the 4% rate applies, but only if the property is worth more than 1 million euros and only for the part exceeding 1 million. Otherwise, the tax is not payable. If the gift of a property is made between siblings, the rate is 6% and is calculated on the value exceeding 100,000 euros. If the gift is to relatives up to the fourth degree, relatives in the direct line or relatives in the collateral line-up to the third degree, the rate is 6% on the total value of the property without any deductible. If the donation is made to other persons, the rate is 8% on the total value of the property donated, without any deductible. Finally, if the gift is made to a severely handicapped person, the tax applies to the part of the value of the share that exceeds 1,500,000 euros, regardless of the degree of relationship.
Then we have to consider the mortgage tax, for transcription in the public land registers, which is equal to 2% of the cadastral value of the property or of the higher value indicated in the deed, and the cadastral tax, for the transfer to the land register, equal to 1% of the cadastral value of the property or of the higher value indicated in the deed. If the donated property is the first home for the donee, the tax to be paid is equal to the fixed rate of 200 euros for each tax. Finally, if the value of the donated property exceeds one million euros, the registration tax of 200 euros must also be paid. Finally, the notary's fee must be taken into account.
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