Have you bought a new home and decided to own the property to your children? Good. There are several factors to take into consideration when it comes to owning your children’s home with usufruct.
First of all, you should know that owning the house to a child means dividing the right of ownership of the apartment into bare ownership and usufruct.
This means that your children will become owners of the right to bare ownership, but you will still have the right to live in the apartment, rent it out, or even give the usufruct to another person.
Basically, you will be able to dispose of the property as you wish, except to sell it. This will be up to your children, as naked owners. But that’s just the tip of the iceberg: there’s a lot more to know about usufruct.
In this article, we will deepen the subject by reviewing all the useful information. Let’s proceed in order.
What does it mean to register the house to the children with usufruct?
From the moment you decide to register the house with usufruct to your children, they will become holders of the right of bare ownership of the property in question.
Now you may be wondering if your child can send you away from home. The answer is no, since the naked owner cannot send the usufructuary away from home.
Therefore, if you decide to register the house for your children, but still reserve the usufruct, the notarial deed will establish that you will be able to continue living in the property for your entire life. Therefore, your children will be able to dispose of the property as they wish only when you are no longer there.
However, it is good to know that the risk of being thrown out of the house does not exist only as long as the child is a minor. The law sees parents as holders of legal usufruct on the assets of their minor children until they reach the age of majority or emancipation.
In order to become a usufructuary of the assets of the minor child, the parent must have parental responsibility. Therefore, the legal usufruct belongs to both parents who jointly exercise parental responsibility.
Should a separation or divorce occur, with the child entrusted to only one of the parents, the right of usufruct will be granted to one of the two also based on the provision taken by the judge?
If at a later time reconciliation between the spouses occurs, the right of usufruct will be restored and granted to both.
The right of usufruct is due to the movable and immovable property of the minor child with the exception of those:
- Purchased by the son with the earnings of his own work
- Given or given to the child to pursue a career, an art or a profession
- Transferred or donated with the condition that the parents who exercise parental authority or one of the two do not have the usufruct
- Received to the child by inheritance, bequest or donation and accepted in the interest of the child against the will of the parents exercising parental authority
- Parents use their child’s property as if they were the owners
- The fruits deriving from the assets owned by the child are intended for the maintenance of the family and for the education and upbringing of all children
- Parents cannot sell, mortgage or pledge their child’s property
- Upon reaching the age of majority of the child, the parents lose the legal usufruct and consequently, the owner of the property could in some cases “kick them out of the house”
To solve this problem, one of the two parents who buy the property on behalf of the child can make a donation subject to the usufruct.
That is to say that in the deed it will be established that the parent will be able to live inside the property until his death. Only from that moment on will the child be able to make use of the good as he sees fit.
Heading the house to the children with usufruct: the factors to take into consideration
Before making your home to your children with usufruct, we advise you to pay attention to the expectations of the heirs on your assets.
In fact, it is not possible to divide the assets to your liking, but you will have to respect the quotas established by law, called legitimate quotas.
Should you fail to comply with these quotas, the heirs could contest the transfer of ownership within 10 years of the succession.
Let’s continue with some insights regarding the legitimate share:
- If you have only one child, and your spouse is still alive, he or she will be entitled to 33% of your assets, while your child will be entitled to an additional 33% of the assets. You can leave the last third of your assets to whomever you prefer.
- If you have more than one child, and your spouse is still alive, he or she will be entitled to 25% of the assets. Another 50% will have to be shared among all children. You can leave the last quarter of your assets to family members, associations, or strangers.
If you are still not clear on the concept of a legitimate share, we suggest you consult your lawyer.
How does the header happen?
The title of the house takes place in front of a notary, who will take care of the stipulation of the deed. Therefore, during the deed, you can choose whether:
- Register the property to your child free of charge by making a donation
- Register the property to your child for consideration, by selling him the house
- Register the house to your child in exchange for an annuity, thus opting for an intermediate solution
In the event that you decide to transfer bare ownership of the property to your child with an annuity, he will be obliged to provide you with assistance throughout your life. The assistance in question must be moral and material. This means that your child will also need to earn you an annuity every month.
The amount of the annuity is agreed in front of the notary. Also, in the event of illness or any other need, your child will be obliged to help you.
Once the deed has been registered, the notary will transcribe it in the real estate registers. The last step involves communicating to the Revenue Agency the change in the owner of the property in question.
Heading the house to the children: advantages and disadvantages
From a fiscal point of view, owning the house to your child implies some advantages, such as that paying reduced taxes at the time of the deed. In fact, the VAT can be discounted at 4% instead of 10% and the registration tax at 2% instead of 9%.
Moreover, the land registry and mortgage taxes are fixed: therefore 50 euros each if you buy from a private individual, while 200 euros each if you buy from a construction company. To all this is added the possibility of obtaining tax deductions on the interest expense of the mortgage.
To be able to benefit from these benefits, it is essential that your child does not own other homes in the same municipality and take advantage of this type of tax advantage for them. Furthermore, he/she must be resident in the Municipality where the property in his / her name is located.
It is necessary to consider that if you decide to own the house to your children and they decide not to live there, you will have to pay the Imu and Tasi as if it were a second home.
Another advantage of the title of the house to the children through usufruct is that the property cannot be foreclosed by the collection agent, in the event of taxes due and not paid by the buyer.
In addition, if the parent is the owner of only one house, that is the one of residence and does not become the owner of a second property, it will automatically make the first one non-foreclosable as well.
Buying a house and making it in the name of the children makes it necessary to make an indirect donation. That is to say that the parent will pay the seller directly, or he will pay money into the child’s current account and from this, he can send a transfer to the seller.
In any case, if the child has not reached the age of majority, the authorization of the tutelary judge will be required, which will be issued within two months. While if the child has reached the age of majority, there will be no need for the court, but only for his / her consent and it will be necessary for him/her to be present before the notary.
In the event that the parent decides to sell the house given to his minor child, he will not be able to do so without having obtained a new authorization from the tutelary judge.
All the information you need to know if you have decided to own the house for your children
In this article, we have tried to deepen all the concepts concerning the transfer of ownership to children through usufruct.
Before taking such an important step, we still recommend that you evaluate its pros and cons and seek advice from your lawyer and perhaps even your trusted notary.