Whether you want to realise the dream of buying a home in the Italian countryside, make a property investment, or find an accommodation solution while living or working in Italy, buying a property need not be daunting if you go into it with eyes wide open.
The following is a brief guide to the property buying process in Italy, your rights as a buyer, and pitfalls to avoid.
Once you have decided on a property that suits your needs, we suggest that you get a full estimate of fees and taxes which are payable over and above the price of the property, to see if the purchase is viable.
Only then should you make a written offer for the property, which should contain the amount you are offering and a proposed purchase date. At this stage you are not required to pay any retaining fees or deposits to the owner as there is no formal agreement in place yet between you and the seller to protect you, and you could lose any money you pay upfront.
If your offer is accepted by the seller, you will enter into the phase of the preliminary contract agreement (compromesso). This is a private agreement between the purchaser and the seller and need not be signed in front of a public notary. To protect yourself as a buyer, you should make sure that the agreement contains the following:
Exact specifications of the property, including entrances and rights of way to the property, preferably accompanied by official plans from the land registry office (ufficio di catasto) and confirmation from the municipal technical office (ufficio tecnico comunale) that the building complies with all the local regulations and that all building or renovations have been carried out with the necessary permissions. As a new owner you may become liable for fines pertaining to the property for any past infringement of the building regulations;
• A guarantee from the seller that there are no mortgages or outstanding expenses on the property;
• The exact price of the property and the payment process;
• The date of occupation, with forfeits should the seller not vacate the property within an agreed-upon period from the agreed date of your occupation;
• In Italy if it is not a private sale, both the purchaser and the vendor are subject to agency fees ranging between three-four per cent. IVA (VAT) is payable on agency fees only when buying luxury property or buying from a company. The agreement should reflect the exact fee so that it is not subject to change later. You are also not obliged to pay the fee to the agent at this stage; by agreement it may be paid over to the agent in front of the notary at the signing of the final deed of sale.
At this stage of the process you will be required to pay a deposit of between 10 – 20 per cent of the value of the selling price of the property. If the seller pulls out of the preliminary agreement after it is signed you are entitled to receive double the deposit you paid; if you pull out of the agreement you will lose your deposit. Even if this agreement is drawn up by an estate agent, insist that it includes the above. As a buyer you have the right to appoint a surveyor or technician (geometra) to carry out any surveys on the property at your own care and cost.
This contract then needs to be registered with the fiscal authority at the registry office (ufficio del registro) within 20 days of its execution, and then submitted to a notary (notaio) for the preparation of the final deed of sale (rògito). Depending on the complexity of the sale, this may take up to three months. Whether buying through an agency or privately, you have the right to choose a notary; as the buyer, you will be paying the notary fees, so find one that is ecommended by friends or colleagues and that suits your needs and pocket. Before signing the final deed of sale, you will need to acquire – unless you already have one – an Italian tax code (codice fiscale), which can be obtained from the tax office (agenzia delle entrate). This in turn is needed to open an Italian bank account which is obligatory for all payments involved in purchasing your property.
The signing of the final deed of sale (rògito) takes place in front of the notary. If you are not fluent in Italian, request that a translator be present. You should be aware that at the conclusion of the deal you will be required to pay the following:
• The balance outstanding between the deposit and the sales price of the property;
• The notary fees;
• If you have taken a loan with a bank you will have to pay for the mortgage agreement (atto di mutuo);
• Land registry tax (imposta di registro) for first properties* – three per cent of the declared value of the property for residents and seven per cent for non-residents;
• Mortgage tax (imposta ipotecarie) for first properties – €168 for residents and two per cent of the property’s declared value for non-residents;
• Transfer tax (imposta catastale) for first properties – €168 for residents, one per cent of the declared value the of property for non-residents. The property’s declared value (at the registry office) is not the sale price of the property but the value reflected at the registry office, and is lower than the sales price. Check this value before paying the tax; it is normally reflected on the land registration (visura catastale). If at the date of purchase you are awaiting residency, you are still entitled to the reduced taxes as long as your residency is granted within 18 months of the signing of the deed of sale;
• Agency fees as per the commitment agreement.
After this you are the proud owner of a property in Italy and are ready to enjoy a place in the sun. If you are attempting a purchase via a private sale or if you are not fluent in Italian, bilingual legal assistance is advised to save you from exploitative expenses and fines in the long run.
Avv. Gianfranco Annino
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* first property (prima casa) means your only or primary residence in Italy