Buying Gifted Property in Italy

The search for the Italian perfect property is an exciting moment for any investor. However, when it comes to buying gifted property in Italy, legal complexities can quickly dampen enthusiasm. Many buyers and banks hesitate to proceed with these transactions due to potential inheritance disputes that may arise years after the purchase.

Before committing to a property purchase in Italy, buyers must conduct thorough due diligence. This includes verifying whether previous owners gifted the property. You can start by requesting a title search (visura ipotecaria e catastale) from the local Land Registry (Conservatoria dei Registri Immobiliari). This document details the property’s ownership history, including any recorded gifts. Additionally, consulting a real estate lawyer will help identify this and any other potential legal risks and provide guidance on navigating any complications.

To fully understand the issues, let’s examine what a gift is and how it can create legal complexities.

What Is a Gift, and Why Can It Be Challenged?

In Italy, a gift is a legal act in which a person voluntarily transfers ownership of an asset to another without receiving anything in return. The most relevant type of gift in real estate transactions is direct (or pure) gift, which requires a notary and two witnesses to be legally valid. A common example is parents gifting an apartment to their children.

While this seems straightforward, Italian inheritance laws protect legitimate heirs – such as children, spouses, and sometimes parents – through two legal actions:

1. Action for Reduction: Determines whether a gift or will has violated the heirs’ rights. 
2. Action for Restitution: If the gift is deemed unlawful, heirs can reclaim the property – even if it has already been sold to a third party.

These legal actions can be initiated up to twenty years after the gift is recorded. This uncertainty makes banks reluctant to grant mortgages for gifted properties and discourages buyers from investing.

Buying Gifted Property in Italy: How to Safeguard Investment

Despite these legal challenges, solutions exist to make buying gifted property in Italy a safer investment.

Revoking the Gift Before Sale

If the giver is still alive, one option is to revoke the gift and return the property to their assets before selling it. The giver can then use the proceeds to compensate the original recipient. This approach eliminates legal risks but requires a high level of trust between the giver and the recipient.

Waiver of Restitution Action by Heirs

If the giver has passed away, legitimate heirs can formally waive their right to claim the property. However, this waiver is only effective against the specific heirs who sign it. If new heirs emerge within the twenty-year period, they can still challenge the gift, making this solution somewhat uncertain.

Safe Gift Insurance: The Best Solution

The most secure and recommended solution is Safe Gift Insurance. This policy protects the buyer from losing the property due to legal claims by legitimate heirs. In case of a dispute, the insurance will compensate the buyer, ensuring financial stability and peace of mind. Moreover, banks are more likely to grant mortgages for gifted properties when an insurance policy is in place.

Finally …

Navigating Italy’s legal system can be challenging without expert guidance. International law firms in Italy provide invaluable support, ensuring compliance and protecting clients’ interests. Whether buying property, setting up a business, or dealing with inheritance matters, legal expertise is essential for a smooth process. Seeking legal advice from professionals experienced in international law ensures that all legal matters are handled efficiently and effectively, allowing clients to focus on their personal and professional goals with confidence.

Book a free consultation with our experienced legal team today and get the expert guidance you need.