🏛️ Passing on a prestigious property:
the best strategies.

Passing on a prestigious residence: a major heritage issue

Prestigious homes, by virtue of their unique character, sentimental value, and heritage significance, require a tailored approach when it comes to passing them on to the next generation. These rare properties, often steeped in history, come with obligations for maintenance, enhancement, and preservation that demand foresight.

Choosing the right legal structure: SCI or dismemberment?

To ensure a smooth transfer of ownership, creating a French real estate company (SCI) is often recommended. It allows for the organization of property management, the transfer of shares through gradual donations, and avoids some of the complexities of traditional joint ownership.

Another option is to divide ownership rights : the donor retains the usufruct of the property (the right to live in it or rent it out), while the heirs receive the bare ownership. This arrangement allows for an efficient and tax-advantageous transfer of assets.

Have the property appraised by a luxury professional

Luxury properties can only be properly valued with the help of professionals specializing in high-end real estate. Their expertise encompasses not only size and location, but also architectural features, rare amenities (swimming pool, grounds, panoramic views, etc.), and overall appeal.

Take into account tax obligations and exemptions

Certain properties listed or registered as Historical Monuments may benefit from partial or even total exemptions from inheritance tax, subject to commitments regarding their preservation and public access. It is therefore essential to consult a notary or wealth management advisor to assess the available tax options.

Involving the heirs in a shared vision

Passing on a beautiful home is more than just a legal act. It's also a symbolic act, a way to perpetuate a family legacy, a lifestyle, or even a shared project. Involving heirs in decision-making, making them aware of the property's value, and engaging them in its management can prevent many future conflicts.

Mistakes to avoid when transferring a high-end property

Transferring ownership of a high-value property requires careful planning. Poor preparation or ill-informed decisions can lead to family conflicts, heavy tax burdens, or a loss of asset value. Here are the main mistakes to avoid.

Neglecting anticipation and planning

Waiting until the last minute to organize the transfer of a valuable asset is the most common mistake. Without a prior strategy, heirs often find themselves facing unprepared joint ownership, high inheritance taxes, or an asset that is difficult to manage. A clear transfer plan (gift, division of ownership rights, real estate investment company, etc.) helps preserve family harmony and optimize tax efficiency.

Underestimating applicable taxes

Inheritance tax on high-end real estate can represent a significant burden, especially if the property is not passed down through direct line of descent or if its value far exceeds the applicable allowances. Failing to factor this into the estate plan can force heirs to sell hastily to settle the taxes owed. A simulation with a notary or tax advisor is essential.

Failing to have the property accurately appraised

An inaccurate or outdated property valuation can distort the entire inheritance process. In the event of undervaluation, the tax authorities may issue an assessment. In the event of overvaluation, the heirs will pay excessive inheritance tax. Therefore, the expertise of a professional specializing in luxury real estate is crucial.

Ignoring the implications of joint ownership

Joint ownership can be paralyzing if it hasn't been planned for. Many conflicts arise from disagreements: rejected renovations, refusal to sell, blocked rentals, etc. It's essential to anticipate how joint ownership will work or to circumvent it through a SCI (Société Civile Immobilière), which allows for more flexible management by majority vote.

Do not consult specialist professionals

Inheriting real estate, and especially transferring a high-end property, requires a range of expertise: notarial, tax, legal, estate planning, and real estate. Failing to consult with the right professionals (notary, tax lawyer, luxury real estate agent, wealth manager) can lead to costly mistakes, both in terms of taxes and logistics.