2024 Real Estate Donations: Updated Regulations, Risks, and Protections
Significant updates to the Italian Civil Code on inheritance and real estate donations have been introduced through the 2024 Legge di Bilancio.
Aimed at enhancing security for buyers and sellers, these reforms seek to reduce risks in transactions involving donated properties and improve market accessibility.
Historically, property donations—where ownership is transferred from a donor to a donee free of charge—have carried significant risks. Such transactions were often challenged by statutory heirs (spouses, children, and in some cases, parents), who could even reclaim properties from subsequent buyers. This uncertainty discouraged market interest in donated properties and limited access to financing.
Under the new law, good-faith buyers are protected from such claims, as statutory heirs can no longer reclaim donated properties. Instead, heirs are entitled only to monetary compensation from the donor, based on the property's assessed value.
The reform significantly reduces the risk for buyers of losing properties acquired from donations, provided the purchase was made for consideration. However, acquisitions made gratuitously may still involve residual risks.
Sellers, or donees, remain liable if statutory heirs initiate reduction actions. In such cases, the donor must compensate heirs in cash. If the donor is insolvent, the donee or gratuitous recipient may also be required to compensate heirs, but only within the limits of the benefit received.
Reduction actions, previously used by heirs to reclaim donated properties, have been restructured. These now result in monetary claims rather than property restitution. Although heirs can still contest donations that infringe on their reserved share, such claims no longer jeopardize the rights of good-faith buyers.
To navigate these changes, buyers should thoroughly investigate a property’s donation history, while sellers must remain mindful of potential liabilities. Notaries will be pivotal in ensuring adherence to new rules for registering reduction claims and safeguarding good-faith purchasers.
The 2024 reforms are designed to strike a careful balance between protecting the rights of statutory heirs and ensuring the security of real estate transactions.
By providing clearer rules and stronger protections for good-faith buyers, the changes are expected to instill greater confidence in the market, particularly regarding properties that have been donated. These updates aim to unlock the full potential of donated properties, making them more attractive and accessible to buyers.
“The 2024 reforms on real estate donations are a game changer. By protecting buyers and balancing heirs’ rights, these changes will transform the market, making donated properties more secure and accessible. It’s essential for everyone involved to stay informed and seek legal guidance to make the most of this significant shift”