Donating a home or money within the family: when a notary is needed and which taxes are paid

Donations are an issue that affects many families closely, in Italy as well as abroad. Donating a home, a sum of money or another asset is often a way to help those who need it today and, at the same time, to organise the transfer of the family estate. In the Italian framework, donations and successions are closely linked: what is transferred during life may affect the future division of the inheritance and the shares that the law reserves for certain family members. For this reason, before making a donation, it is worth asking what resources will remain with the donor, what obligations the recipient will assume and how that choice will fit into the family balance. The taxes and formalities of the deed are part of the decision, together with today’s needs and those of the years ahead.

In a family with two children, for example, one of them might need cash to start a business, while the other might want to live in one of their parents’ flats. Assigning sums or assets of the same value today may seem like a simple way to treat them equally, but whoever receives money can use it immediately, while whoever receives a property takes on costs, constraints and responsibilities. And the donor needs to understand whether they will be able to meet their own expenses in the years ahead. The decision starts here: what can leave the family estate, and on what terms?

The first calculation concerns the donor

Before setting the amount, it is worth distinguishing the money available from the resources needed to generate income or cover future expenses. Take two parents who want to transfer a rented flat to their daughter. If they donate full ownership, they also give up the rent. If they intend to continue receiving it, they can consider with the notary a donation of bare ownership with retention of usufruct. The daughter immediately acquires bare ownership; the parents retain, within the limits of the reserved right, the enjoyment of the property. The two solutions are not equivalent either in terms of the value of the right transferred or in terms of freedom to dispose of the asset.

For money, the form is what changes most. A direct donation generally requires a public deed with two witnesses; for movable assets of modest value, however, delivery is enough. The Civil Code does not set a threshold in euros: the donor’s economic situation also matters. If a mother wants to allocate 80,000 euros to her son’s business project, the fact that the bank transfer is traceable or that the sum is below the tax-free allowance does not solve the issue of form. Before the transfer, it is useful to define whether this is a donation, a loan with an obligation to repay, or another operation, because each has different effects.

How much of the tax-free allowance remains

The gift tax depends on the relationship between donor and beneficiary. For spouses and relatives in the direct line, the rate is 4% on the amount exceeding one million euros per beneficiary. Between brothers and sisters, 6% applies above 100,000 euros. For other relatives up to the fourth degree, in-laws in the direct line and those in the collateral line up to the third degree, the ordinary rate is 6% with no ordinary tax-free allowance; for other beneficiaries it is 8%. For people with serious disabilities recognised under Law 104, a special tax-free allowance of 1.5 million euros applies. When calculating what remains, previous tax-relevant donations made by the same donor to the same person must also be taken into account.

An example: a parent has already donated to their daughter 750,000 euros relevant for the purposes of the tax-free allowance. If they give her another 320,000 euros, the residual tax-free allowance, assuming there are no other transactions to consider, is 250,000 euros. The gift tax is 4% of the 70,000 euros exceeding that amount, that is 2,800 euros. For a property, in addition, the economic valuation of the asset, useful for comparing what family members receive, must be kept separate from the determination of the taxable base under the tax rules. The cadastral value does not necessarily coincide with the market value.

For property, there are other taxes and decisions to make

Even when no gift tax is paid, the transfer of property is ordinarily subject to 2% mortgage tax and 1% cadastral tax. With the requirements for the first home relief, these two taxes are 200 euros each. This is a benefit separate from the tax-free allowance and does not exhaust the charges of the deed. If the home is transferred to more beneficiaries, the law allows, under the stated conditions, the fixed amount to be applied when the requirements are met by at least one of them and the required declarations are made.

It must also be considered what will happen if the beneficiary wants to sell or apply for a mortgage. Law No 182/2025 amended the rules to make the circulation of properties acquired by donation easier, strengthening the protection of third-party buyers and lenders. The reform does not remove the rights of forced heirs; in the cases governed by the new rules, it changes how they are protected in relation to third parties. The date of opening of the succession and the transitional provisions remain relevant. To assess an actual sale, therefore, the provenance of the asset and the acts already completed must be examined.

The balance between heirs must be considered before signing

Imagine that two brothers receive, respectively, a flat and a sum of money of similar value. Years later, the flat may be worth much more or much less, while the sum may have been invested or spent. In succession proceedings, it is not enough to remember that, at the time of the donations, the family considered the gifts equivalent. It is necessary to verify which assets and values are relevant under the succession rules. Collation, in the cases provided for, concerns what is received by donation by children, their descendants and the spouse who take part in the succession. The protection of the reserved share operates on a separate plane: a dispensation from collation does not make it possible to undermine the share reserved by law.

Good preparation leaves the family with three verifiable pieces of information: what resources remain with the donor, what each beneficiary receives and how the transfer fits into the future inheritance structure. Bringing these answers to light before the deed helps in choosing between full ownership, bare ownership and cash. The tax saving enters the calculation, but by itself it does not say whether the donation is suitable for the family’s objectives.

Sources

Italian Civil Code, Articles 536 and following, 737, 782 and 783

Legislative Decree 346/1990, Articles 56 and 57: rates and earlier donations

Law 342/2000, Article 69: first home relief

Law 182/2025, Article 44: circulation of assets acquired by donation