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Renounce Ownership of a Property: What to Know?

The steps to be taken to dispose of the ownership of a house, land or share of co-ownership in favor of the state or another person. Here's how to give up ownership of a property.

Renounce Ownership of a Property What to Know

It can happen that the costs of running a house become prohibitive and higher than the possibility of the owner. In the case of property ownership or co-ownership, you may have expenses and obligations that are of little use. Considering, then, the taxes to be paid and the current economic difficulties that affect families, being a property owner has now become a luxury: in these cases, it may be necessary to dispose of a property.
Consider, for example, who has inherited a small plot in a remote location; or to those who have become co-owners of an unusable ruin that no one wants to buy. How to get rid of such assets whose management, in many cases, becomes a burden not easily sustainable? The solution is to renounce ownership.

In this article we will explain all the aspects to know to get rid of a property, including:
  • Why dispose of a property?
  • How does property renunciation work?
  • How does co-ownership renunciation work?
  • How much does it cost to give up ownership?
  • What happens to debts in the event of a property co-ownership?
  • Is it possible to get rid of the condominium fees?

Why dispose of a property?


The renunciation of ownership of a property is useful, for example, in the case of a co-ownership asset between multiple persons, where each of them owns only a small part. The infinitesimal quota could be more a source of problems than benefits.

Think of a house bequeathed to three children: if one of the three were to give up his share, the other two would become owners of the property at 50%; whereas if the second accountathlete also renounced its share, the latter would become 100% owner. In the case of co-ownership, therefore, the renunciation of ownership is convenient as it causes the share of co-ownership of the other co-owners to expand.

But what if the owner is one? He might consider the management of the asset uneconomical: it is the case, for example, of an old ruined cottage whose renovation would become too onerous and which no one wants to buy, or an inaccessible property. In these cases the owner would only have charges (taxes, maintenance costs, etc.) without the possibility of using or reselling the property. So, then, it might be convenient to proceed with the renunciation of ownership of the property.

How does property renunciation work?


The owner of a property can unilaterally renounce the property of the property without the need to find another entity to become its new owner. But how to proceed with the renunciation of the ownership of a property?

A formal waiver act is required in writing which must be transcribed in the Real Estate Registers. The renounced property thus becomes the ownership of the state, which cannot refuse to become the owner of the property.

How does co-ownership renunciation work?


It is also possible to dispose of a share of co-ownership, always with written act, to be published in the Real Estate Registers. In this case, the real right does not go to the state but to the other co-owners, who see their share of co-ownership increase; they can in turn forfeit the benefit of the other co-owners, as long as there is only one left. In the event that even the last one renounces, the ownership of the renounced asset comes to the state.

The act of renouncing a co-ownership, with expansion of the share of co-ownership of the other co-owners, is to be considered as a donation. As such, the donation tax is paid (as it is a free transfer). In particular:
  • In donations between spouses, parents and children, the tax is 4% but only on the value of the asset that exceeds the deductible of one million euros. No taxes are paid for lower goods;
  • in donations between brothers and sisters the tax is 6% but only on the value of the asset that exceeds the deductible of 100 thousand euros;
  • in donations between relatives up to the fourth degree and related up to the third, the donation tax is 6% of the value of the asset;
  • in other donations, the tax to be paid is 8% of the value of the asset.
We now turn to mortgage and land taxes, they are due with rates of 2% and 1% of taxable value. Unless the beneficiary of the waiver can apply the "first home" benefits: in this case, the mortgage and land taxes are paid in the fixed measure of 200 euros each.

How much does it cost to give up ownership?


In the case of renunciation of property the cost is not prohibitive. In fact, it is around a few hundred euros and serves to cover the fee of the lawyer and the notary, and the costs of registering the act.

The least expensive waiver is the one that affects the entire property. This is the case where you give up ownership in favour of the state. In this case you do not pay anything register, mortgage and land tax. Instead, you pay the stamp duty of 230 euros and a mortgage fee of 90 euros.

Hypo-catastrophic visures, usually performed by the notary or other professionals, cost about 100 euros. Finally, the notary's compensation, the amount of which depends on the difficulty of the practice, but whose cost does not exceed 1000 EUROS in any case, must be taken into account. The total expense of relinquishing the entire property is generally less than 2000 euros.

What happens to debts in the event of a property co-ownership?


According to art. 1104 c.c., in the event that the renunciation co-owner has expenses to be incurred due to co-ownership, the renunciation of the share of property will take release and therefore it will be up to the "survived" co-owners to take charge of the expenses arising from the co-ownership: both those already accrued and those that will be produced in the future.

Is it possible to get rid of the condominium fees?


We now come to clarify the case in which the ownership of a property is part of an apartment building, that is, it concerns the thousandth share of co-ownership that is due, on the common parts of the building, to who owns an apartment inserted in an apartment building. In this regard, art. 1118 according to paragraph c.c. specifies that you can not give up the condominium to get rid of the condominium costs.

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