Real estate exchange between siblings: how it works, costs, and benefits

In the context of inheritance and family asset management, a real estate exchange between siblings represents a contractual form increasingly appreciated for its flexibility and cost-effectiveness. It is a type of transaction that allows ownership of a property to be transferred from one party to another without the need for two separate sale and purchase agreements, thereby reducing time, costs, and tax burdens.

Beyond its economic aspects, this type of exchange also carries significant relational value: it enables an equitable redistribution of inherited assets and helps prevent potential family disputes arising from the division of property.

What is a real estate exchange

An exchange is a contract regulated by Article 1552 of the Italian Civil Code, under which each party undertakes to transfer ownership of a property to the other in return for ownership of another property.

Applied to real estate, it consists of the exchange of two properties — for example, an apartment for a villa, or a plot of land for a building.

Unlike a sale, an exchange does not necessarily involve the payment of a sum of money. However, when the properties involved do not have exactly the same value, a cash adjustment may be included to compensate for the difference in value between the two assets.

Like a standard property sale, the real estate exchange deed must be executed as a public notarial act and registered in the land registry, so that the agreement becomes enforceable against third parties.

Why choose a real estate exchange between siblings

Within a family context, an exchange represents an efficient tool to rebalance an inheritance distribution or to adapt asset allocation to the individual needs of each sibling.

After an inheritance is opened, heirs often find themselves managing properties of different types or locations, not always suited to their living needs or financial situations.

Through a real estate exchange between siblings, each person can obtain the property that best fits their circumstances, without having to sell and repurchase on the open market.

For example, one brother may prefer the home located closer to his workplace, while the other may wish to move into a larger property suitable for his family. The exchange allows both needs to be met in a single transaction.

From a family perspective, this legal instrument facilitates harmonious management of shared assets, avoiding disputes and preserving harmony among heirs.

From an economic standpoint, it also offers significant advantages compared to a traditional sale, since the registration, mortgage, and cadastral taxes apply only once — and solely to the property of higher value.

Tax aspects and costs of a real estate exchange between siblings

From a tax perspective, a real estate exchange between siblings follows the same rules as a sale and purchase, with some advantageous distinctions.

The registration, mortgage, and cadastral taxes are calculated based on the property of higher value and paid only once, not for each asset exchanged.

If both siblings qualify for “first home” benefits, the registration tax is reduced to 2% of the cadastral value of the higher-value property, while the mortgage and cadastral taxes remain fixed at €50 each.

If neither qualifies for the first-home benefits, the ordinary rate of 9% applies.

The notary’s fee for a real estate exchange varies according to the value of the properties and the complexity of the transaction but is generally lower than the combined cost of two separate sales. On average, the notarial expense ranges between €1,500 and €2,500, including registration and ancillary fees.

It is important to note that if one of the siblings operates as a business or holds a VAT number, the transaction may be subject to VAT and additional taxes (such as stamp duty).

How to execute a real estate exchange between siblings

The process for carrying out a real estate exchange between siblings is straightforward but requires careful attention at every stage:

1. Property Valuation – Each property’s value must be determined, preferably through a professional appraisal, to avoid imbalances in asset values.
2. Agreement Between the Parties – The siblings must agree on the terms of the exchange, specifying any cash adjustments and transfer conditions.
3. Notarial Deed of Exchange – The notary drafts the public deed, which is signed by both parties and then registered in the land records.
4. Fiscal and Cadastral Formalities – After signing, the notary handles the deed registration and updates the cadastral ownership records.

It is advisable for the deed to include clear clauses regarding the delivery of the properties, any cash adjustments, and compliance with urban and cadastral regulations.

A practical example

Imagine that two brothers, Marco and Luca, have inherited two properties:

• an apartment in the city valued at €180,000
• and a seaside house valued at €150,000.

Marco wishes to move to the city, while Luca prefers to live by the sea.

Through a real estate exchange, Marco transfers his share of the seaside house to Luca in exchange for the apartment, paying a €30,000 cash adjustment to balance the difference in value.

In a single operation, both brothers obtain the property they desire, saving on taxes and notarial fees that would otherwise have applied to two separate transactions.

A real estate exchange between siblings is not only a financially advantageous option but also a valuable asset-planning tool.

It simplifies the management of family property, eliminates unnecessary intermediary costs, and preserves fairness among heirs — strengthening family ties rather than dividing them.

Before proceeding, it is always advisable to consult experts in inheritance law who can carefully assess the legal and fiscal implications of the transaction.

The Agenzia delle Successioni provides comprehensive assistance at every stage of the real estate exchange between siblings — from preliminary legal advice to cadastral verification and tax management.