Is the donation of bare ownership convenient?

Transferring real estate with the donation of bare ownership, what are the tax advantages

It often happens that the donation of bare ownership is used for the transfer to the descendants of real estate.

The advantage on the part of the donor is the right to use the asset, reserving the usufruct or the right of residence. In fact, this second case is also interesting from the point of view of the protection of assets, since the right of residence is unequivocal and impregnable.

Another interesting point is to limit the tax impact with respect to the donation of full ownership.

In fact, in this case the inheritance and gift tax, of 4%, is applied to the cadastral value of the property, reduced by the age of the usufructuary.

Subsequently, upon the death of the donor, the "consolidation" between usufruct and bare ownership will have zero taxation.

However, it should be considered that this maneuver involves the risk of making the property subject to restitution action by the legitimate heirs of the donor, and reducing the marketability of the asset and, consequently, its value.

Therefore, a donation of an indirect nature would be preferable to direct donation.

By donating, therefore, the money to the son / grandson to buy the property in full or bare ownership, and then transfer the right with a deed for consideration.

In this case, the injured person could claim only the value of the asset, without the possibility of requesting the return in kind.

To facilitate the marketability of the donated property, you can take out an insurance policy.

It covers the damages that the buyer of the donated property may suffer, following a favorable outcome of the property restitution action promoted by the legitimate heirs of the donor.

In this case, the insurance would pay the equivalent in cash, preventing the return in kind of the asset.

As an alternative to the donation, if the assets consist of prestigious properties and / or period villas, the transfer of prestigious properties, in full or bare ownership, to a company could be evaluated.

Costs

The transfer costs would certainly represent an element to be carefully evaluated.

In fact, in these cases, an appraisal of the value of the property is essential, on which the registration tax would be paid, proportionally, after deducting the liabilities.



Benefits

In addition to this, there may be some positive considerations.

For example, the more efficient and rational management of various real estate properties, especially when the form of a partnership is chosen, and the possibility of subsequently transferring the capital to descendants with favorable taxation.

Finally, in the event that conservative and non-commercial / entrepreneurial property management of the assets is envisaged, you can opt for the simple company form, which is also absolutely acceptable for use. In fact, thanks to its characteristics, such as simplicity of operation, flexibility and management cost-effectiveness, in certain circumstances it can represent an excellent tool for planning and managing the assets of luxury properties.

These are some tips that the consultants of Stresa Luxury Real Estate can provide you for planning your real estate assets.

The purchase of a luxury villa on Lake Maggiore will be supported, from the preliminary stage, by our consultants, whom Francesco Papurello has selected in his long career.

Buying a villa or property in Stresa is now particularly convenient, as prices are still stable.