Index
The sale of real estate between first-degree relatives is permitted without particular restrictions.
Do you want to transfer your real estate property to your son or daughter and don't know how to proceed? Before proceeding with the purchase, it is important to evaluate the legal, fiscal, and family aspects.
With this Casavo article, we explain how selling a house between relatives works and how to do it safely and without
Selling a house to a child: what are the possible options
It often happens that parents decide to sell their own home to their children or other relatives to guarantee them a residence they can fully benefit from. In some cases, it may be necessary to obtain a mortgage to facilitate the sale.
The first institution that comes to mind in these cases is the real estate donation, but there are also other ways to complete the transfer. If you're wondering if a parent can sell a house to their son or daughter, the answer is yes, and it's often the best solution to avoid unexpected events and negative consequences.
Real Estate Donation
Donating a property is the most established practice for transferring ownership of a property to a relative. While it's true that it allows you to save on the costs of the sale, the donation is still taxable. In addition to the traditional registration, land registry, and mortgage taxes, there is also a specific gift tax whose amount varies based on the degree of kinship between the donor and the donee.
In the vast majority of cases, for direct relatives (parents and children, husband and wife), the amounts to be paid are low: the applicable rate is equal to 4% of any value exceeding one million euros. Therefore, if you donate an asset valued at €1,100,000, you will have to pay 4% of €100,000, i.e. €4,000.
To find out the details of the tax rates for other degrees of kinship, we recommend consulting our article on taxes relating to donations.
On the surface, this may seem like the best solution, but remember that this institution exposes you to the risk of disputes from any other heirs. If you decide to donate a home to just one of your children, siblings may request the return of the donated property within 10 years of your death to receive their legitimate share of the succession. It is therefore very important that there is general consensus on the decision to avoid exposing yourself to possible disputes.
The sale
The sale of properties from father to son (or from mother to son or daughter) protects against recriminations from other heirs. The main disadvantage is that the agreed price for the sale must be in line with market prices, and therefore requires a real cash outlay consistent with the value of the home.
A fictitious sale for a lower amount established by mutual agreement is always possible, but in this case there remains the possibility of restitution claims from the other heirs who could object to what would be, to all intents and purposes, a disguised donation.
A parent can sell a house to just one child without harming the interests of the others. At the time of inheritance, in fact, their inheritance rights to the legitimate share – that is, the part of the deceased person's estate that by law belongs to relatives in the direct line – remain valid on the amount received from the sale. A possible downward valuation is therefore not acceptable unless all interested parties agree.
Let's also quickly consider the hypothesis that the child sells the house to his father or mother. Legally, there are no problems: you have every right to do so by reaching the agreement you prefer with your parents. However, if you have brothers or sisters, at the time of succession the property will fall within the legitimate share and will therefore be divided among all the heirs. Lenders may require additional guarantees for mortgage approval in these transactions.
Donation with sale and consent of the heirs
Finally, the option of donation with sale with consent of the other co-heirs remains to be considered. This operation consists of the free transfer of the property to all entitled heirs according to the shares established by the inheritance law.
The people who have received a portion of the property will then transfer their share to the donor's son or daughter, who will ultimately obtain full ownership of the home.
Let's assume that you and the other parent have three children and decide to transfer one of your properties free of charge to an only daughter in agreement with her siblings. To avoid future inheritance disputes, a donation with sale and consent establishes, in the presence of a notary, the will of all parties involved to renounce their inheritance rights.
Selling a house to a child in the presence of creditors: is it possible?
What happens if the person who decides to donate or sell a house to a child or another relative has debts and their property is at risk of seizure? In the case of a donation or sale at a fictitious price, the person claiming a claim has the right to request revocation of the transfer within 5 years of the deed if there are no other easily seized assets that allow the debt to be paid.
If we are faced with an absolute simulation, however, the creditor has no time limit to defend their claims. Absolute simulation is a legal act that produces no effect. In our case, therefore, a father agrees with his son to donate the house, which he then continues to live in as if nothing had happened.
Now you know all the options for selling a house between relatives. Don't forget that a parent has the option of transferring a property without leaving anything to the children, but we'll discuss this in more detail in another article. If you plan to sell your property within a certain timeframe, come and discover all the advantages that await you with Casavo!
Want to sell your house?
We'll buy it, even in 30 days, or we'll help you find the perfect buyer.