Real Estate in Succession

Real estate is frequently involved in cross-border successions. In such cases, it is necessary to consider not only the provisions of the applicable national inheritance law, but also the rules of private international law, the relevant tax frameworks, and often the domestic law of the heirs. A legally sound structuring and administration of the succession requires in-depth knowledge of both legal systems as well as the pertinent European regulations, in order to ensure an efficient settlement and to avoid unnecessary disputes.

Applicable Law and Choice of Law

Under the European Succession Regulation (EU Succession Regulation), the applicable inheritance law is generally determined by the habitual residence of the deceased at the time of death. At the same time, the Regulation allows for a choice of law in favor of the deceased’s national law, for example to apply German or Austrian inheritance law to real estate located in Italy. Such a choice of law may have significant consequences for the succession and therefore requires careful examination with regard to its validity, scope, and potential tax implications.

Forms of Testamentary Dispositions in Italy and Germany

Italian inheritance law recognizes several forms of wills. In addition to the notarially executed public will, both the secret will and the holographic will are permissible, each subject to strict formal requirements. The choice of the appropriate form depends on the circumstances of the individual case and may be decisive for the subsequent recognition and enforceability of the testamentary disposition.

German inheritance law likewise allows for different forms of wills. Most common are the holographic will, which must be handwritten, signed, and dated by the testator, and the notarial will, which is drawn up and certified before a notary. Married couples or registered partners may also opt for a joint will (Ehegatten- oder Berliner Testament), which is not possible under Italian law. Each of these forms entails specific advantages and legal consequences, and the choice requires careful consideration, particularly in cross-border situations.

Co-Heirships and Partition of Inherited Property

When real estate in Italy or Germany becomes part of a co-heirship following a succession, complex issues regularly arise regarding the administration, use, and tax treatment of the property. Diverging interests among the heirs often call for differentiated solutions. These may include a consensual partition agreement, the sale or transfer of individual co-ownership shares, or the adjustment of entries in the land register and cadastral records.

A legally secure settlement requires careful consideration not only of the applicable rules of succession and property law but also of the related tax implications and cross-border aspects. The aim is to achieve sustainable solutions that accommodate the interests of all parties involved and minimize the risk of future disputes.

Tax Aspects

The transfer of real estate by way of inheritance or gift is subject to inheritance and gift tax both in Italy and in Germany. In Italy, taxation depends primarily on the degree of kinship, the cadastral value of the property, and statutory exemptions. In Germany, taxation is determined by personal allowances, progressive tax rates, and the classification of tax brackets based on the heir’s relationship to the deceased.

In cross-border cases, both tax regimes may apply simultaneously. To prevent unlawful double taxation and to make effective use of available reliefs, the provisions of double taxation treaties and the relevant EU regulations must be carefully considered. A coordinated tax strategy is therefore essential to ensure legal certainty and to optimize the overall fiscal outcome.

On-Site Administration of Cross-Border Successions

The practical implementation of a cross-border succession involving real estate in Italy or Germany requires close coordination with notaries, land registry and cadastral offices, as well as the competent tax authorities. This includes obtaining certificates of inheritance or similar proof of succession, registering heirs in the relevant property registers, and clarifying all associated tax obligations. Structured and expert coordination on the ground in both jurisdictions is essential to ensure that the succession is administered efficiently, securely, and in full legal compliance.