EU Property Regime Rules. Marriages & Partnerships

Cross Border Property Rules for Marriages & Registered PartnershipsEU property regime rules for cross border marriages and registered partnerships

According to the European Commission, there are about 16 million couples in the EU living in a “cross border situation”. These international couples are citizens and/or, own properties in different EU Member States. Until 2019, no EU property regime rules existed for cross border marriages and registered partnerships.

On 23rd June 2016, Members of the European Parliament approved two regulations. These regulations determine homogeneous rules applicable to property regimes in cross border situations. Council Regulation (EU) 2016/1103 determines rules for married couples. Council Regulation (EU) 2016/1104) determines rules for civil partnerships. These two regulations entered into force on January 29th, 2019.

The rules determine jurisdiction and applicable law for matrimonial and registered partnership property regimes in case of divorce, separation or the death of one of the spouses or partners.

The objective of the regulations is to increase foreseeability and legal certainty regarding jurisdiction and applicable law in the matter of property regimes of international couples. In addition, the regulations harmonise international private law rules between EU countries.

EU property regime rules determine the applicable law in the event of divorce or death

EU Regulations bring broader legal certainty and end parallel and/or conflicting proceedings in the various EU Member States.

The regulations do not affect the underlying institutions of marriage and civil partnerships. These remain matters defined by the national laws of the EU Member States.

Regulations explicitly regulate two cases of jurisdictional governance. These are the death of one of the spouses or registered partners, and divorce.

In the case of death, the court in a competent Member State, pursuant to EU Succession Regulations, will have jurisdiction in matters arising from the couple’s property.

In the case of divorce, the court called upon to rule on an application of divorce will have jurisdiction, provided the couple agrees. Couples may also reach an agreement regarding jurisdiction during court proceedings.

In cases other than the above mentioned, and in cases where spouses fail to reach agreement, jurisdiction lies with the courts of the Member State where couples are habitually resident. Failing that, jurisdiction lies with Member State where couples were last habitually resident, insofar as one of the spouses or partners is still considered resident there. Otherwise, jurisdiction lies with the courts of the Member State of the respondent’s habitual residence and failing that, the state of the couple’s common nationality at the time of court proceedings. The parties may also agree to give jurisdiction to a Member State whose law is applicable to the matter. Should the respondent take the matter to court, that court will have jurisdiction. This would be irrespective of which court has jurisdiction according to the aforementioned rules.

Choice of law rules is applicable to marriages and registered civil partnerships

The regulations allow spouses and registered partners to choose which country law shall apply in the event of divorce or death. Marriages and partnerships registered prior to 29th January 2019 are subject to national choice of law regulations.

The regulations are applicable in 18 EU Member States that joined the enhanced cooperation initiative on this matter, namely: Belgium, Cyprus, Greece, Croatia, Slovenia, Spain, France, Portugal, Italy, Malta, Luxembourg, Germany, Czech Republic, the Netherlands, Austria, Bulgaria, Sweden and Finland.

The EU members that did not adopt the Regulation are The Republic of Ireland and Denmark. These countries continue to use the choice of law rules of their national laws.

Regulations pertaining to applicable law are universal in scope. Thus, the law of any state, including states that are not members of the EU, may be found to be applicable. The law provided by the regulations is applicable to all assets, irrespective of  location.

Finally …

Divorce or death of a spouse or registered partner is hugely emotional wherever you live. Having to work through matters related to inheritance and asset separation can add to the pain. The complications multiply when couples live or own properties in different countries. We understand the legal complexities that international couples can face in Italy. If you need advice, we are here to help.

 

You may also be interested in Review of EU and Italian Divorce Law

 

Insidertipps beim Immobilienkauf in Italien

Tipps für den Kauf einer Immobilie in Italien Wir haben Kunden nach ihren Insidertipps beim Immobilienkauf in Italien gefragt. Hier ist eine Auswahl von Antworten, von denen wir hoffen, dass sie hilfreich sein könnten, wenn Sie planen, Immobilien in Italien zu kaufen. In Italien tauschen Sie rechtsverbindliche Papiere und Geld viel früher aus, sobald Ihr Angebot […]

Homes for €1 in Sambuca, Sicily (Italy)

Is it true that the Italian town of Sambuca in Sicily is selling homes for the symbolic value of €1?

Homes for 1 Euro in Sambuca

To combat dwindling populations and to attract Italian and foreign investors to revitalise their areas, a number of Italian villages, towns and cities, have launched charm offensives by putting a number of houses up for sale for the symbolic sum of 1 Euro.

Dream homes for 1 Euro in Sambuca is the latest €1 property scheme in Italy. This is how the Sicilian Municipality of Sambuca is promoting tourism and highlighting depopulation issues. Sambuca is in the Province of Agrigento.

News of €1 property sales in Sambuca spread further through a CNN article on 18th January 2019.  Local officials say, “It’s not the first Italian town to lure in outsiders with tempting offers but, Sambuca is scrapping red tape to make sure any interested investors can more or less make their purchase right away”.

As opposed to other towns that are merely doing this for propaganda, this city hall owns all the homes for 1 Euro in Sambuca on sale,” says Giuseppe Cacioppo, Sambuca’s deputy mayor and tourist councillor. “We’re not intermediaries who liaise between old and new owners. You want that house, you’ll get it in no time.”

Are there any conditions attached to the purchase of €1 properties in Sambuca?

New owners must commit to refurbishing their choice of the crumbling 40 – 150 square meter dwellings within three years. Renovation costs start at €15,000 (about $17,200). Owners will also need to cough up a €5,000 security deposit that will be returned once the remodelling is complete.

With the population dwindling, Cacioppo says the town needs outsiders to prevent it from falling into ruin. “We can’t afford to lose our lovely Arab heritage. Luckily, foreigners are lending a hand in this rescue crusade.” (Source: CNN).

1 Euro houses at auction

As with all 1 Euro house schemes around Italy, sales take place in public auction (vendita con incanto).

It’s impossible to tell what you are taking on just from looking at a few photos of a property.

In some countries house auctions are common. In Italy however, they are not. There are no legal packs, which contain essential information including official titles and searches, property information and planning permission. In effect, you are responsible for conducting property-related searches.

To avoid buying what seems like a bargain but, subsequently turns out to be a money pit, you should inspect the property before deciding to make a bid.

Finally …

While €1 properties may seem like a great opportunity, buyer beware! Conditions always apply.

There are plenty of other reasonably-priced houses in Italy without the terms and conditions attached to €1 property schemes. These properties may be a better option for you because you can undertake renovation at your own pace and on your own terms.

Before making any type of property investment in Italy, you should seek independent legal advice on matters such as ownership titles, zoning, planning, structure and conditions of sale and purchase.

If you are considering buying a property anywhere in Italy for 1 Euro, or more, please free to contact us via email or fill in our contact form.

 

You may also be interested in How to get a mortgage in Italy

Legitimate Heirs. Rights of “Forced Heirs” in Italian Inheritance

Italian law provides for legitimate heirs

legitimate heirs in Italian inheritanceAlthough a testator may have expressed wishes in a Will, certain people have a legal right to receive at least a portion of an Italian inheritance. These are all so-called, “legitimate heirs”, or “forced heirs”.

The testator only has one portion of assets to dispose of freely, which varies between a quarter and a half of total assets. This is defined as the, “available quota”.

The remainder of an Italian inheritance is legally designated. This portion goes to a testator’s spouse (or registered partner), children and, in the absence of children, if they are still alive, the testator’s parents.

Legitimate Heirs: what are inheritance quota rights?

If there is only one child, s/he is due at least half of the decedent’s total assets. This becomes a third of assets if the decedent’s spouse or registered partner is still alive. A child would therefore be entitled to inherit a third of the assets.

In the case where there are two or more children, they divide two thirds of the inheritance between them. A surviving spouse or registered partner is entitled to a quarter of the assets, children’s quota decreases to half of the assets. If one or more children pre-decease the testator or renounce an inheritance, their descendants qualify to receive that entitlement.

Where the decedent and surviving spouse or registered partner have no children, the surviving partner is entitled to at least half of the assets.

Parents and other ascendants of the deceased only become legitimate heirs in the absence of descendants. Parents have the right to a third of the inheritance, reduced to a quarter if the decedent’s spouse or registered partner is still alive. The latter is legally entitled to half of the assets.

Regarding property pre-owned by the deceased or owned in common by the spouses or registered partners. The surviving spouse or registered partner has the right to (i) remain in the family house and, (ii) retain all movable assets in the property. In this case, if there are any other co-heirs, there is no requirement to pay property tax on their portion of inheritance. Tax liabilities remain with the spouse or registered partner, even if s/he renounces the inheritance. 

What about the inheritance rights of separated couples?

In cases of a legal separation, the spouse or registered partner loses inheritance rights if a court judgement finds s/he was to blame for the breakdown of the marriage or registered partnership.

Surviving spouses or registered partners who have no court judgement regarding their separation are not legally separated. They therefore have the same inheritance rights as a non-separated spouses and partners. This would also be the case where no assignment of responsibility for the breakdown of the marriage or registered partnership exists.

In other words, the loss of the right to an inheritance relates only to court-issued judgements of separation. The law, in accordance with article 151 of Italian Civil Code, deems a couple to still be in the marriage or registered partnership if their separation was a personal decision and did not go through the courts.

Legitimate heirs and reserved quotas in Italy

Legitimate heirs Reversed quotas and availability
Spouse (or registered partnership) (in the absence of children and parents) 1/2 to the spouse (or registered partner) = 1/2 available quota
One child (in the absence of a spouse or registered partnership) 1/2 to the child = 1/2 available quota
Two or more children (in the absence of a spouse or registered partnership)  2/3 to children (divided into equal parts) = 1/3 available quota
Spouse (or registered partnership) and only one child 1/3 to the spouse (or registered partnership) 1/3 to the child = 1/3 available quota
Spouse (or registered partnership) and two or more children 1/4 to the spouse (or registered partnership)  1/2 to children (divided in equal parts) = 1/4 available quota
Spouse (or registered partnership) and parents (in the absence of children)  1/2 to the spouse (or registered partnership)  1/4 to parents (divided into equal parts) = 1/4 available quota
Parents (in the absence of children and spouse or registered partnership)  1/3 (divided into equal parts) = 2/3 available quota
If there is a Will, the law reserves a quota of inheritance only for the spouse (or registered partner) and children (if the deceased had no children there is a reserved quota for parents who are still living), so if the Will is valid, other relatives cannot make claims.  

 

Finally …

Italian inheritance is a complex matter. In addition, if you own assets in more than one country, this can further compound the complexity. We recommend you seek independent legal advice regarding your personal situation. If we can be of assistance, please get in touch.

For more information about Italian succession and inheritance, you may find our Italian Succession Guide useful.

At De Tullio Law Firm, we have over 55 years of expertise managing cross border succession and estate planning matters throughout Italy. We are a full member of STEP, the world’s leading association for trust and estate practitioners.

 

Buying A Property in Italy. Insider Tips from Our Clients

In a recent survey, we asked clients what top tips they would offer to others buying a property in Italy. What would they recommend in order to ensure that Italian property purchases run smoothly? Here is a selection of replies, which we hope might be helpful if you are planning to buy real estate in Italy.

“Notaries and solicitors are not the same. The former works for the Italian State. The latter works for you …Tips for Buying A Property in Italy

Once the vendor has accepted your offer, it’s crucial to have the right people on your side.

We thought that because under Italian law you have to use a public notary, a ‘notaio’, we were protected from a legal point of view. However, we learnt that an Italian notary is not at all the same as having a solicitor. While a notary handles the conveyancing, they can’t give you any legal advice. In fact, Notaries are government employees. They are responsible for collecting all the relevant taxes you pay at completion.

In Italy, the vendor and buyer often share a ‘notaio’ but I’d advise you to appoint your own. Despite what anyone tells you, I’d recommend you consult a solicitor to advise you on matters such as price negotiations, checks and searches on the property, inheritance and how to structure your purchase and tax issues.

Choose the solicitor yourself, not someone the vendor or estate agent recommends. And, make sure the solicitor speaks your language and has experience of dealing with Italian property purchases and all the associated legal, estate planning and tax aspects”.

“It’s not just about buying a property in Italy. Don’t ignore inheritance planning!

Under Italian law you have to leave a portion of your estate to your children (or your parents if you have no children), you can’t just leave all your property to whoever you want, whether that is your spouse or the local dog rescue centre.

Of course, there are ways around this, but they have legal and tax implications so it is important to seek professional advice if for any reason you don’t want to leave your Italian home to what are known as, “forced heirs”.

There are several ways to structure property transactions in Italy, which is great. However, you can’t change the ownership structure later on, so it’s important to consider the options before you buy. There are also inheritance tax implications so, again, getting professional advice before you sign anything is crucial”.

“You have to be smart with your cash.

Firstly, make sure you get your offer right. It’s surprising how many people who have an accurate idea of prices where they live will make an offer in Italy based on what they feel is right rather than market knowledge. It’s easy to research prices across Italy online on various property portals and agency websites. Your estate agent can advise you too. They also have a good idea of the price the vendor would be willing to accept.

We wanted complete peace of mind and preferred to have someone working purely on our behalf, so we asked De Tullio Law Firm to help us and they did an excellent job. They advised us all the way through our Italian real estate buying experience. They saved us a great deal of money negotiating a price for the property and sound legal advice. In addition, they helped put us in touch with foreign exchange specialists and helped us look in to taking out an Italian mortgage. We decided not to go down that route in the end but, it would have been an option”.

“Make sure your estate agent is qualified.

Italy has a well-regulated estate agency system. Buying a property in Italy is therefore pretty safe. Plus, it is easy to make sure your agent is one of the good guys. Check that your estate agent has professional insurance and is registered with their local chamber of commerce. Still, it’s a huge thing to sign legal documents if like us, your Italian is not great.

From personal experience, it’s a good idea to have a lawyer look over paperwork before you sign anything. Take care who you give your money to. Never give it directly to the seller – only to the notaio or to your estate agent so long as they are insured to take such payments. And never be tempted to pay ‘under the table’ to avoid taxes on the purchase by declaring a lower sale price. Even if you get away with it at the time, you will have to pay higher capital gains taxes when you come to sell as the difference between the price you paid (or declared you’d paid) and the price you sell at will be higher”.

“Although surveys are not common in Italy, that doesn’t mean you don’t have to have one.

We’re glad we had a survey done. When we were buying a property in Italy, our surveyor found quite a few structural issues and planning permission issues. Things that we couldn’t see just from viewing the property. We were able to use the issues to negotiate on the price of our house.

Make sure you choose an independent surveyor. Someone who understands the peculiarities of Italian buildings. Get a complete survey covering structural, zoning, building permits, termites, lead paint, asbestos, natural and industrial risks, gas/electrical/water installations, septic tanks and energy efficiency ratings. Because we were planning to renovate our property, we also asked a builder to look over the property”.

“Renovations can be a great opportunity, but they can turn in to a money pit.

If you are looking for a renovation project in Italy, it is important to understand the likely costs and timescales involved, to avoid them spiralling out of control. Get at least a couple of quotes from builders before you sign for the property, and make a realistic plan for how you will proceed – will you use an architect and, or geometra, a project manager, Italian builders and artisans, or do the work yourself?

Planning permission is also key; get your lawyer to insert a condition into the preliminary sales contract (compromesso) stating that the purchase is subject to planning consents. We have renovated a couple of buildings in Italy, but wouldn’t have undertaken the projects without seeking legal advice beforehand”.

“Choose a reputable developer if you decide to buy an off-plan property in Italy.

Looks great on paper? A chance to design certain elements of your home? That’s what we thought but, buying an off-plan property in Italy is not for the faint-hearted. There have been so many stories of things going very wrong with off-plan real estate.

If you are thinking of buying off-plan, having your own lawyer is a must. Italian law is very complex and Italian legalese is a completely different language. It is crucial to establish that the developer is reputable before you sign any papers or hand over any money – do the developers have a bank guarantee for example? Bear in mind that in Italy developers won’t get funding from a bank until a certain amount of properties have been signed up, so check how far the development has progressed (has planning permission been approved or building work started?).

Never sign anything until you have taken legal advice and never ever hand over all the money at the start of the process, even if a developer is pressuring you. You should only make payments in stages. A final payment is only due once the property is complete.”

“On top of the asking price, you need to budget for additional costs.

This is really important to think about. Notary and estate agent fees can easily add up to 15% of the price of your property. Notary fees include various Italian State taxes like stamp duty as well as their actual fees, set on a sliding scale according to the value of the real estate. Estate agency fees are at the agency’s discretion. If you have a mortgage, don’t forget to account for mortgage fees as well. In addition, think about costs such as solicitor’s fees and surveys. Also think long term about property taxes, maintenance and running costs”.

“Do your homework before buying a property in Italy …

Read specialist magazines, consult websites – take care they are reputable though. Online advice can be a little misleading or even incorrect. Go to Italian property exhibitions and talk to experts there. Make sure you understand what you are taking on – not just the buying process and costs involved, but everything else. How will you get to your property? What are the running costs, including property taxes, utilities bills and service charges if you are buying an apartment?

Italy is a great place in which to buy a property – as long as you take care with your research beforehand and use reputable and registered professionals to help you”.

Finally …

If you are thinking of or in the process of buying a property in Italy and have a question,  please get in touch for a free consultation.

 

You may also be interested in How to get a mortgage in Italy