Buying a holiday home for your son: why do it?
Buying a house for their children is the desire of many parents. The crisis in the real estate market and the collapse of prices no longer allow you to consider buying a house as a real investment, but still represent a means of saving your savings from inflation and the risk of an economic crisis. Today the timing when it’s possible to buy a house have also changed. Previously, banks granted mortgages more generously. Today, however, especially for the youngest, it is increasingly difficult to buy a house. It’s so often parents who buy the house for their young children and register it at a later time and often it happens with a holiday home.
Why buy a vacation home for your son?
There are several reasons to buy a holiday home and then name it to your son. One of the most frequent reasons is to avoid a double change of ownership which would involve noticing payments and costs of charges. Another reason is of a fiscal nature. Buying a property and making it payable to your child, you wouldn’t pay taxes on the second home if the owner, or your child, doesn’t have a home. The third reason is to avoid and prevent possible foreclosures by creditors.
How to buy a holiday home in the name of your children in Italy
When you buy a holiday home in Italy to make it to your children, you are making a donation, which can take place in two different ways.
You can make a direct donation with a double visit to the notary. A transfer is made without specifying the reason, by registering the deed with the Revenue Agency. The son will then use that money to buy the property. The advantage of this solution is that the donation is registered, with a tax dispute that becomes more complicated.
If you want to avoid going to the Revenue Agency instead, you can make an indirect donation. The purpose of this transfer of money must be specified in the reason for the transfer. The second option is to make the transfer directly to the seller, asking him to make the house to your son. The indirect donation is currently the most used, fast and economical. If it’s done correctly and traceable, there will be no problems from a tax point of view.
If all the steps aren’t carried out correctly, fiscal problems could arise with the so-called “profit meter”. The Revenue Agency asks for explanations to the taxpayer who is the owner of luxury goods – such as real estate – but who appears to have an income lower than that necessary to maintain them. It will therefore be necessary to demonstrate with all the documentation the correct passage of money certified by account statements or checks.
Maintain control of the holiday home
Sometimes it happens that parents want to keep a check on the vacation rental purchased for their children. Perhaps to prevent them from reselling it to obtain liquidity. To prevent such problems, it’s advisable to register a particular right, such as usufruct, or a share of co-ownership. This obviously entails additional security but also additional costs.