Don't buy an apartment in Italy that was donated

So here is the latest thing to worry about when buying a property in Italy: donated property. This happened to a friend of mine very recently. She was interested in buying the small apartment next to her own small apartment to join them and make a bigger space. No problem. She knew her neighbor, he had already moved and the apartment was empty. He was happy to sell it.

So they go through all of the checks and appointments and everything and just before making the final deal, the notary (they actually do work sometimes, I hear) uncovered the fact that this apartment had been donated. This is a clever way of having your apartment go under someone else's name so you can pay less tax on it than if you were to actually sell it. This works well in two situations: 1. you are so rich that you have a gazillion apartments and therefore a big enough percentage of your estate goes to your heirs that this apartment can go to whomever you want, or 2. You plan to live in the apartment you receive until you die. Then it will just pass on to your heirs and you don't have a thing to worry about.

Italian law protects the inheritance that should go to your heirs. There's no cutting your kids out of your will either. Two-thirds of your estate MUST go to them. If you try to donate your house to someone else in order to give them less, forget it. Your kids have up to 20 years after your death to get that house back, and they will. They have a right to it, especially if they didn't get that famous two-thirds (see, you can decide what you want to do with that other third, leave it to your guinea pig, but the other two are not your choice). This means that if you buy a donated house (it has happened and happened again and not come to light sometimes until the third owner after the donor gets the place taken away from him or her by the protesting heir or heiress, even after paying market price. GULP! Big loss, people).

So, don't buy a donated apartment, but if you are absolutely convinced that you must, don't pay market price. It's a high risk investment that could (probably) get taken away from you somewhere down the line.

If you have received a donated property you are not interested in, why not rent it out? You only pay 20 percent tax on the rent you recieve. Find a small place, live the simple life, and sock money away until you can buy the place you really want.

Just a thought.