How to Transfer Property to Your Child with the Lowest Costs?

Intestare Casa ai Figli: Metodi Economici

Many parents wish to pass down their house to their children, but the high costs involved often hold them back.
However, there are inexpensive ways to transfer property ownership to children.
In Italy, any transfer of real estate, such as houses or land, requires a notarial deed as per the law.
Whether through sale or donation, the burden of the notary deed must always be met.
Let’s explore the most cost-effective methods for transferring a house to a child.

Donating a House to a Child

Transferring ownership typically involves either sale or donation, both requiring a notary due to the necessity of a public deed.
While a sale entails a consideration for the property transfer, a donation does not pose this issue.
However, in case of donation and if there are other heirs involved, within 10 years of death, siblings could challenge the deed if their legitimate share was affected.

Both sale and donation incur costs: 2% registration tax if the recipient considers it their primary residence; €50 for mortgage tax for the primary home; €50 for cadastral tax for the primary home.
If the property value is below one million euros, no gift tax is due, but notary fees must be considered.
When solely looking at costs (excluding the sale price), donation and sale bear similar economic weight.

Transfer through Usucaption

One can opt for usucaption among relatives to donate a house to a child: if the child acts as the home’s owner for at least 20 years, using, renovating, and maintaining it, they can start an usucaption process (with the parent’s approval).
Legal assistance is required to finalize the property transfer, incurring fees such as lawyer’s fees and court and registration taxes for the judgment and transcription.

The expenses, when calculated, are not significantly lower than those for a notary, making usucaption seemingly less advantageous at first glance.
However, the Court of Cassation believes that a formal lawsuit can be avoided through mediation if an agreement is reached (particularly if the parent intends to donate the house).
Though legal and notarial services are necessary for mediations, the costs are quite favorable compared to other solutions.

Donating the House during Separation

Another way to donate a house to a child is during the parents’ separation.
Parents in the separation phase may agree (not imposed by the court) to transfer the house to the child instead of monthly support.
The house transfer replaces the child maintenance obligation (though the judge must approve the decision’s fairness and non-detrimental nature to the child).

This agreement is not seen as a donation but as fulfilling parental duty.
The promise to transfer the property is irrevocable and does not entail payment of customary property transfer taxes or notary fees.
Since the transfer is stipulated in the separation order (which is a public deed), no notary is required to establish the property transfer.

This method is undoubtedly the most cost-effective (only legal fees for handling the separation case are incurred) but likely the least feasible (especially if parents do not wish to separate).