Transfer real estate with the donation of bare ownership, how to do it and what are the tax advantages.

4 January 2020

It often happens that the donation of bare ownership is used to transfer property to the descendants. The advantage 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 the patrimony, since the right of residence is unequaled and impignable.

Another interesting point is to limit the tax impact compared to the donation of full ownership. In fact, in this case the inheritance and donation tax of 4% is applied to the cadastral value of the property, reduced according to 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 entails the risk of making the property subject to restitution by the donor's legitimate heirs, and of reducing the marketability of the property and, consequently, its value.

Therefore, an indirect donation would be preferable to direct donation. Therefore, by giving the son / grandson the money to purchase the property in full or bare ownership, and then transfer the right by way of an act for consideration. In this case, the injured legitimate claimant could only claim the value of the asset, without the possibility of requesting the return in kind.

To facilitate the marketability of the donated property, an insurance policy can be subscribed. It covers the damages that the purchaser of the donated property would suffer, following a favorable outcome of the property return action promoted by the legitimate heirs of the donor. In this case, the insurance would pay the cash equivalent, preventing the return of the asset in kind.

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


Costs

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

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



Advantages


In addition to this, there may be positive considerations.

For example, the most 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 the descendants with favorable taxation.

Finally, in the event that conservative and non-commercial / entrepreneurial real estate management is envisaged, you can opt for the simple company form, absolutely acceptable even for use. In fact, thanks to its characteristics, for example simplicity of operation, flexibility and economic management, in some circumstances it can be an excellent tool for planning and managing the heritage of luxury properties.

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

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

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

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