Introduction
Selling an inherited property can be a complex process that involves various steps and considerations. Here is a guide on how the process generally works:
Declaration of Succession: After the owner’s passing, it is necessary to submit a Declaration of Succession to the Revenue Agency. This document is crucial for legally transferring the property to the heirs.
Division of the Property among Heirs: If there are multiple heirs, deciding how to divide the property is necessary. This division can occur in various ways, such as through the sale of the property and the distribution of the proceeds among the heirs or by assigning a specific portion of the property to each heir.
Property Valuation: Before listing the property for sale, obtaining a professional appraisal to determine its current market value is advisable. This can help the heirs establish a fair selling price.
Allowing Co-heirs to Purchase: In some cases, the law may grant co-heirs the right to purchase each other’s share of the property. This is known as the “right of preemption”. If a co-heir is interested in buying, they can do so before the property is officially on the market.
Appointment of a Real Estate Agent: Heirs may choose to appoint a real estate agent to handle the sale. An experienced agent can assist with marketing, negotiations, and transaction details.
Sale of the Property: Once the property has been appraised, and the heirs are ready, the real estate agent can list the property for sale. Prospective buyers will make offers, and when an acceptable offer is received, the negotiation phase begins.
Deed of Sale: Upon concluding negotiations, a deed of sale is drafted. This document formally transfers ownership of the property to the new buyer.
Payment of Taxes: It is crucial to ensure that all taxes related to the sale, including the property transfer tax, are paid.
Distribution of Proceeds: Once the sale is complete, the proceeds are distributed among the heirs according to the succession provisions or mutually agreed-upon decisions.
Recording the Deed: The deed of sale must be recorded with the Land Registry Office to ensure the legality of the property transfer.
It is advisable to involve a notary in this process to ensure the legal and tax correctness of all transactions. Additionally, laws may vary by jurisdiction, so it is always wise to consult with a local legal professional.
The declaration of succession is the initial step to take when inheriting a property, serving as a document that notifies the transfer of the asset to the heirs for tax purposes.
It should be submitted within one year from the opening of the succession, typically coinciding with the passing of the individual who bequeathed the property. The declaration of succession can be filed through:
- Telematic services
- An authorized intermediary
- At the competent office of the Revenue Agency.
This declaration comprises a list of all the deceased’s assets and is instrumental in determining the amount of inheritance taxes. Given that no inherited property can be sold until the relevant taxes are paid, this document holds significant value.
Selling an Inherited Property: How Does It Work?
Selling an inherited property can be a complex process involving various steps and considerations. Here is a guide on how the process generally works:
Declaration of Succession: After the owner’s passing, it is necessary to file a Declaration of Succession with the Revenue Agency. This document is crucial for legally transferring the property to the heirs.
Division of the Property among Heirs: If there are multiple heirs, deciding how to divide the property is necessary. This division can occur in various ways, such as selling the property and distributing the proceeds among the heirs or assigning specific parts of the property to each heir.
Property Valuation: Before putting the property up for sale, obtaining a professional appraisal to determine its current market value is advisable. This helps heirs establish a fair selling price.
Allowing Co-heirs to Purchase: In some cases, the law may grant co-heirs the right of first refusal to purchase each other’s shares. If a co-heir is interested in buying, they can do so before the property is listed on the market.
Appointment of a Real Estate Agent: Heirs may choose to appoint a real estate agent to handle the sale. An experienced agent can assist with marketing, negotiations, and managing transaction details.
Selling the Property: Once the property is appraised, and the heirs are ready, the real estate agent can list the property for sale. Prospective buyers will make offers, and when an acceptable offer is received, negotiations will proceed.
Deed of Sale: Once negotiations are finalized, a deed of sale will be drafted. This document officially transfers ownership of the property to the new buyer.
Payment of Taxes: It is crucial to ensure that all taxes related to the sale, including the property transfer tax, are paid.
Distribution of Proceeds: After the sale is completed, the proceeds are distributed among the heirs according to the succession provisions or agreed-upon decisions.
Registration of the Deed: The deed of sale must be registered with the Land Registry Office to ensure the legal transfer of ownership.
It is advisable to involve a notary in this process to ensure legal and tax correctness. Additionally, laws may vary by jurisdiction, so consulting a local legal professional is always recommended.
Inheritance Tax for Selling an Inherited House
Regarding inheritance taxes on the property (settled by the Revenue Agency within the third year from the declaration of succession), these vary based on the degree of relationship:
- 4% on the cadastral value of the property, with a deduction of €1.000.000 for children and spouses.
- 6% on the cadastral value with a deduction of €100.000 for siblings.
- 6% on the cadastral value, without applying the deduction, for nieces, nephews, uncles, first cousins, brothers-in-law, and parents-in-law.
- 8%, also without applying the deduction, for all other individuals, including cohabitants.
Other Taxes to Pay
In addition to the inheritance tax, selling an inherited property incurs regular expenses similar to standard real estate transactions:
- Mortgage tax (2% of the cadastral value).
- Cadastral tax (1% of the cadastral value).
Both must be paid before filing the declaration of succession. However, if at least one of the heirs qualifies for first-home benefits, these taxes apply at a fixed rate of €200 each.
Other costs include:
- Stamp duty, €64 for each transcription note.
- Special taxes (e.g., secretarial fees).
- Fixed mortgage tax of €35 for each transcription note.
To proceed with the sale of an inherited property, a cadastral transfer application must be submitted to the land registry office within 30 days of the declaration of succession. For this application, the following fees apply:
- €55 for the special cadastral tax.
- €16 for every 100 pages of stamp duty.
Acceptance and Transcription
To sell an inherited property, two additional acts must be presented.
The first is the acceptance of the inheritance because the heirs do not formally accept the received assets with the declaration of succession alone.
This act can take two forms, according to Article 474 of the Civil Code:
Express acceptance is declared formally through a notarial or private document (the safest choice for a smooth real estate transaction).
Tacit acceptance, where the heir does not create a formal act but expresses the will to accept the inheritance through behavior.
The second act is the transcription of the acceptance of the inheritance, certifying for all involved parties that ownership of the property has transferred from the deceased to the new owner, who intends to sell it.
Transcription can occur concurrently with the notarial deed, which cannot be concluded without this act. The primary reason for this formality is to protect the buyer and any mortgage lenders from the concept of the apparent heir.
To have the acceptance of the inheritance transcribed by the notary, the following documents are required:
- The death certificate of the deceased property owner.
- The declaration of succession.
- Selling an Inherited Property Jointly
Often, multiple heirs own the property to be sold. In this case, it is referred to as joint inheritance. If the property is designated to multiple heirs, all must unanimously agree to the sale for it to proceed. Thus, co-heirs can sell the inherited house only if an agreement is reached.
In situations where not all heirs agree to the sale, two options can be considered:
The first option is to sell one’s share of the property. In this case, co-heirs have the right of first refusal. After determining the value of their share, they must offer it for purchase to those holding other shares of the property. Only if they decline can the share be sold to third parties.
The second option is to dissolve joint ownership through a legal process, viable only if a mandatory mediation attempt with co-heirs fails to find a resolution.
In this case, a judge will autonomously establish the selling conditions based on prevailing laws regarding real estate expropriation and distribute the proceeds among co-heirs.
When Becoming Owners of an Inherited Property: What to Do
Ownership of an inherited property is acquired through the declaration of succession submitted to the Revenue Agency within one year of the death.
Once owners of the property, selling it becomes possible unless other heirs are present. If there are no intentions to live in or rent out the property, selling it is an option.
The seller can choose between selling the house privately or using a real estate agency. While selling privately might save on commission fees, it comes with risks. That’s why many international clients prefer to use our services as agents for their property purchases in Sardinia.
Selling an Inherited Property within 5 Years
If one decides to sell an inherited property within five years, there is no taxation on the sale of the inherited house.
In standard real estate transactions, a capital gains tax is applicable if a property is sold within five years. However, the Revenue Agency (Agenzia delle Entrate) does not consider the sale of inherited properties as real estate speculation. Therefore, no taxation applies.
It should be noted that if the heir designates the inherited property as their primary residence, there is a prohibition on selling within five years of succession. If the sale occurs within five years, the heir is obligated to purchase another residence to designate as their primary home within the following year.
Selling an Inherited Property After 10 Years
Selling an inherited property ten years from the deceased’s death may present challenges if the inheritance has not been accepted.
Italian law provides a maximum period of ten years within which to accept an inheritance. If an heir does not accept the inheritance within this time limit, the declaration of succession alone will not be sufficient to affirm the acceptance of the inheritance.
In cases of non-acceptance, selling the deceased’s property is no longer possible.
Selling a Share of an Inherited Property
Each heir has the option to sell their undivided share of the inherited property to a third party or another heir. If one heir acquires all the inherited shares from other heirs, joint ownership can be dissolved without division.
Each heir has the right of pre-emption over another heir’s share intending to sell it to a third party.
Selling an Inherited Property with Multiple Heirs
Selling an inherited property is possible when multiple heirs are involved. Besides reaching an agreement among heirs on the property’s destination, filing the declaration of succession and accepting the inheritance is necessary.
The sale will be executed through a notary, and all co-heirs must be present with the new buyer. The shares will transfer from the co-heirs to the new buyer, who will become the sole owner of 100% of the shares.
