Index
What are the factors to take into account to understand how to calculate the value of a property in succession? An example to calculate the value of a property in inheritance is to multiply the cadastral income by the cadastral coefficient (e.g. 430 x 126).
Here is the Casavo guide that answers all your questions.
Cadastral income and multipliers
When a loved one passes away, you must prepare to face many bureaucratic steps. One of these concerns the declaration of succession. If one or more properties are among the assets left in inheritance, you will need to understand how much they are worth for the calculation of inheritance taxes.
For the purposes of this tax the market valuation or the cadastral value is not taken into account. The starting point is always the cadastral income, to which different multiplication coefficients are then applied.
Once this data has been obtained, the specific multiplication coefficients for buildings are applied, thus determining the cadastral value for inheritance.
Before proceeding with the calculation methods, we remind you that there are some cases in which the payment of inheritance tax is not required. Relatives in a direct line – i.e. parents, children, and spouses – benefit from an exemption of one million euros each on their legitimate share, beyond which they pay a rate of 4%. Brothers and sisters, however, are entitled to an exemption of up to 100,000 euros and a rate of 6%.
How to calculate the value of inherited properties
In all other cases, it is necessary to know how much the inherited property is worth to calculate the inheritance tax. The starting point, as we have already said, is the income, a figure that you can retrieve from the Land Registry where the property is located or from the land registry. It is important to know the cadastral income of real estate to determine the overall value of the inheritance.
Once this data has been obtained, a 5% revaluation is carried out and the result is then multiplied by the coefficient corresponding to the cadastral category of the building.
For homes, there is only one fundamental difference to remember, with two multipliers slightly lower than those foreseen for the calculation of the cadastral value:
- if the home received as a bequest is intended as a first home, a quotient of 110 is applied;
- for others residential hypotheses the coefficient is equal to 120.
Starting from this base, with a few calculations, go back to the total from which you can then calculate the possible inheritance tax.
Let's do some calculations as an example to help you clarify the steps to be taken. Let's summarize in a diagram the elements to keep in mind:
How to calculate the value of properties for inheritance
Property Revaluation coefficient Cadastral multiplier First home 5% 110 Other home 5% 120
So let's imagine that You have inherited a house with a cadastral income of 500 euros. After the revaluation, the total rises to 525. If this is your first property, the figure you are interested in is 525 x 110, equal to 57,750 euros. If you already have a property in your name, the result will be 63,000 euros. The same calculation applies to land, considering the specific cadastral income for agricultural and non-agricultural land.
Inheritance tax on real estate
With these results, it is possible to calculate the total amount due for inheritance tax. As we mentioned previously, there are different rates defined based on the degree of kinship to the deceased person. In particular:
- 4% for all relatives in the direct line, which we said are parents, children and spouses;
- 6% for other relatives up to the fourth degree in the case of affinity in the direct line and the third degree for the collateral line. This group includes cousins, nieces, nephews, grandparents, great-grandchildren and great-grandparents;
- 8% for all other degrees and relationships.
Let's go back to our example and leave aside the discussion on tax exemptions for simplicity. A daughter who receives the property in our hypothesis as a first home in a will pays an inheritance tax on 4% of 57,750, therefore 2,310 euros. A brother who inherits a second home, however, will be required to pay 6% of 63,000, equal to 3,780 euros. Another relative, finally, will pay 5,040 euros.
To these amounts must then be added the mortgage and land registry taxes. For first homes, their amount is 200 euros each. For second homes, they are calculated proportionally to the value: 1% for the land registry tax, 2% for the mortgage tax.
This short guide on how to calculate the value of a property in inheritance should provide you with all the information you need to know the charges to be paid when you receive a home as an inheritance. If the home you inherited represents more of a cost than an opportunity for you, perhaps you're interested in finding a way to sell it quickly. That's what Casavo is for.
Introduce your property to us through our free property valuation system. If it meets the parameters set by our experts, we'll make you a direct purchase offer to buy it within 30 days. Alternatively, we will help you find the best solution for you on the market.
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