Italy modernizes its real estate market: what the Simplification Act means for investors
The recent “Simplification Act” introduces a structural reform of the legal regime governing real estate assets originating from donations, significantly enhancing legal certainty in property transactions. A new regulatory framework aimed at facilitating investment, financing, and real estate transactions.
Milan/Madrid, 2 February 2026 – Law No. 182 of 2 December 2025, known as the Simplification Act, marks a profound shift in Italian succession law and, more importantly, in its impact on the real estate market. For the first time, the legislator directly addresses one of the structural factors that has historically generated uncertainty among investors and market participants: the legal risks associated with the sale, financing, and acquisition of real estate assets derived from donations.
Under the previous legal framework, Italian law afforded forced heirs (“legittimari”) a form of in rem protection, enabling them—where their reserved share was infringed—to seek restitution of the donated property even against subsequent purchasers for value. While intended to safeguard family interests, this mechanism resulted in significant constraints on the circulation of real estate assets, limiting access to credit and disproportionately affecting market participants unfamiliar with such succession-related risks.
The 2025 reform introduces a clear paradigm shift. The protection of forced heirs no longer takes the form of a proprietary remedy affecting the asset itself, but is instead confined to a monetary claim against the donee. The donated property, by contrast, is released from succession-related encumbrances and may circulate freely on the market.
This principle is expressly reflected in the new wording of Article 563 of the Italian Civil Code, which has been entirely restructured. The action for reduction of a donation – unless the relevant claim has been registered beforehand – no longer produces effects vis-à-vis third parties who have acquired the property for valuable consideration: ownership is definitively consolidated upon transfer, without the need to await extended limitation periods or to verify the lapse of twenty years from the date of the donation. From an investor’s perspective, this constitutes a decisive improvement in terms of legal certainty and risk predictability.
Forced heirs retain full protection, albeit exclusively on an obligatory rather than proprietary basis. They may bring a claim for financial compensation against the donee to restore their reserved share, without jeopardizing the stability of the real estate transaction. Even in the event of the donee’s insolvency, the legal framework continues to protect bona fide purchasers for value, reallocating the economic risk within the succession sphere rather than onto the market.
In line with this new approach, the legislator has amended the rules on land registration concerning actions for the reduction of testamentary dispositions infringing forced heirship rights, shortening from ten to three years, as from the opening of the succession, the time limit beyond which the registration of the claim prevents a favorable judgment from being enforceable against third-party purchasers. This amendment is of particular relevance in real estate due diligence, where temporal exposure is a key element in legal risk assessment.
The law further establishes a carefully calibrated transitional regime. The new provisions apply not only to successions opened after their entry into force, but also to prior donations and successions, unless forced heirs initiate legal proceedings within a strict six-month period. Failing such action, pre-existing transactions are definitively subject to the new regime, thereby consolidating transfers and contributing to market stabilization.
Overall, this reform conveys a clear message: Italy is moving towards a more modern, accessible, and internationally competitive real estate market. The new legal framework significantly reduces structural uncertainties and creates tangible opportunities in acquisition, financing, and real estate development transactions.
The Simplification Act is not merely a technical amendment to succession law. It operates as a strategic instrument to attract capital, facilitate the circulation of real estate assets, and strengthen the confidence of investors who regard Italy as a stable—and now more than ever, legally secure—investment jurisdiction.
