Inheritance share of a house: does it affect income...

You inherit a share of a house property. You begin to think about all the bureaucratic procedures you will have to deal with and the expenses (especially tax-related ones) you will incur: from the inheritance declaration to the inheritance tax, from the mortgage tax to the cadastral tax. At the same time, however, you realize that this property, even if only a share, increases your assets. But does it also increase your income? The question is relevant both because assets and income are different concepts and because increases in income are scrutinized by the tax authorities. In fact, while assets represent, so to speak, a static measure that captures a person’s wealth at a certain point, income indicates changes in that wealth over time, changes that are significant for the Ministry of Economy and Finance and its operational arm, the Revenue Agency. Indeed, income not only influences the payment of many taxes - primarily personal income tax (Irpef) - but also the eligibility for social benefits such as, for example, home assistance for the disabled or non-self-sufficient individuals or discounts for local public transport subscriptions. Inheritance share of a house: does it affect income?

Inherited properties: should they be declared to the tax authorities?
Income from land – i.e., those generated from lands and buildings located in Italy and registered (or to be registered) in the cadastre – are part of the income of those who own such properties as owners or holders of another real right (for example, usufruct).

The fact that the law refers to the owner of the property is significant. For instance, if there’s a bare owner and a usufructuary of the same apartment, only the latter – as the holder – will have to include the related land income in the tax declaration.

Therefore, anyone who inherits even just a share of a house property is obliged to report in the tax return, starting from the date the inheritance was opened – i.e., the death of the person whose estate it is – the land income produced by the inherited property.

For the fraction of the year preceding the opening of the inheritance, the land income must be included in the last tax return that the heirs are required to file on behalf of the deceased.

Exemption cases from declaration
If you only earn income as an employee (thus you wouldn’t normally be required to file an income tax return) and inherit a share of a house, you become obliged to submit such a declaration if your total annual income – i.e., your employment income combined with the land income – is not less than 8,000 euros. It’s worth noting that this calculation excludes any income possibly derived from the main residence and its appurtenances.

If the property is rented out, it contributes to income; otherwise, the taxpayer isn’t required to declare unless the apartment is located in the same municipality as the main residence. In this case, the property is subject to both the municipal tax (Imu) and personal income tax (Irpef) at 50% of the cadastral income, revalued by 5% and increased by one-third.

However, if the inherited property, which isn’t rented out, is located in a different municipality from the main residence, it won’t contribute to the heir’s income, who will still be obliged to pay the Imu.

Inherited house: does it affect the Isee?
The Isee (Indicator of Equivalent Economic Situation) is a value representing the economic situation of a household and is used to determine whether a person is eligible (and if so, to what extent) for certain social benefits.

As seen above, for tax purposes, the mere ownership is less important than possession of the property.

Therefore, for example, if children and the surviving spouse (holder of the right of residence) inherit shares of a property from the deceased spouse, the children wishing to apply for the Isee shouldn’t indicate their respective property shares on the Dsu (the unique substitute declaration used to request the Isee). Instead, the mother, as the person exercising the right of residence, should declare 100% ownership in the Dsu.

© laleggepertutti.it