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HOUSES IN INHERITANCE: SUCCESSION EXPLAINED IN 5 STEPS

The succession of real estate is a delicate subject, which concerns legal, fiscal and family aspects related to the transfer of ownership of real estate from a deceased person to his heirs.

It is a complex procedure and therefore knowing the fundamental steps can help the heirs to face it in the best way, avoiding complications and problems.

Step 1) When are we in the presence of a succession?

Succession – specifically, the succession of real estate – occurs when, following the death of a person, the heirs find themselves having to present the declaration of succession to obtain ownership of the real estate left by the deceased.

The declaration is essential to officially transfer all the deceased’s properties to the heirs.
This last ones must indicate each property subject to the succession in detail, with its cadastral value and the share of ownership due to each if there are multiple heirs.

Step 2) How many types of succession are there?

There are two main types of succession based on whether or not there is a will:

• Legitimate Succession.
  This is when the deceased does not leave a will and therefore it is the Italian law according to the Civil Code that establishes both how the estate is divided and an order of inheritance among family members.
  Usually, spouses and children have priority, followed by other relatives.
• Testamentary Succession.
  It’s when the deceased leaves a will with the specific indication of the beneficiaries of his real estate and how he wishes them to be distributed after his death. The will must comply with certain legal formalities to be valid.

Stepp 3) What is the procedure to follow to carry out the succession?

First of all, the heirs must collect all the necessary documentation:

• death certificate
• family status of the deceased
• family status of the heirs
• documents relating to the real estate

Once collected, the documents must be submitted together with the inheritance report to the Revenue Agency within 12 months of the date of death of the deceased.

The heirs will have to pay inheritance taxes since inherited properties are subject to tax costs. Inheritance taxes are determined on the basis of the cadastral value of the property and vary on the basis on the degree of kinship between the deceased and the heirs.

At this point, the heirs will request the cadastral transfer, in other words the updating of the owners of the properties in the Land Registry.

The last phase is that of the transcription in the real estate registers,that is the one that makes the transfer of ownership official. This procedure is carried out at the Land Registry Office, ensuring the publicity of the transfer and the protection of the rights of the heirs.

Step 4) Is it possible to sell a property received in inheritance?

Absolutely.

When a property is inherited, the purchase value for the new owner – the heir – is generally the market value of the property at the time of the deceased’s death. This value is important because it will be used to calculate the capital gain in the event that the property is subsequently sold.

Let’s open a parenthesis to specify that a correct real estate valuation is a central aspect in the sale of a property. This is why we recommend that you contact our team of experts in estimates and valuations to immediately identify the most correct market price and achieve the goal of selling your house in the shortest possible time.

The difference between the sale price of the property and the value declared at the time of succession constitutes the so-called capital gain. If the sale price is higher than the purchase value, the capital gain that is generated is subject to taxation only if the property has been owned for less than five years.
The exception is the property used as a primary residence for at least half of the period of ownership by the deceased or the heirs, in that case the capital gain is not taxable.

Step 5) Conclusions and considerations

It is very important to respect the timeframes and deadlines for filing the inheritance declaration and paying taxes, as delays or non-compliance may result in penalties and interest.

It is also essential to keep all the documentation relating to the property, including the will, the inheritance declaration and any appraisal that certifies the value of the property at the time of the inheritance. These documents will be useful in the event of tax audits or for the correct declaration of capital gains.

Given the complexity of tax regulations and the possible variations based on the specific situation, it is always advisable to consult professionals in the sector (accountants and lawyers expert in inheritance law) so as to be able to receive personalized advice and professional support to optimize the tax and legal management of the property subject to inheritance.