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Guide to buying a property in Italy
Italy has been attractive to tourists since the eighteenth century and owning a property in Italy has attracted northern Europeans since that time. This page we guide you through the process of buying your dream Italian property.
Buying property in Italy is a fairly straightforward operation provided you have the correct help and advice. As a fellow member of the European Union, Italy poses no real restrictions to foreign nationals buying real estate. The purchase of property in Italy is not a complex procedure and for the most part, a foreign national has the same rights in the buying process as any Italian citizen. However there is one exception; foreign nationals must pay an 11% purchase registration tax, while an Italian only pays a 4% purchase registration tax.
Using an Estate Agent
Using an agent who has local knowledge and can guide you through any difficulties you may come across is essential. A good agent will know lawyers and other professionals who may be needed to ensure the decision you make is the right one.
The Initial Agreement (Compromesso di vendita)
Once you have researched and found the property you wish to purchase, an initial agreement between yourself and the vendor will need to be signed and executed. This document the agreed price of the property and deposit paid. You will need to pay a deposit of 10% of the total purchase price, however in Italy it is not uncommon for this deposit to run as high as 50% of the purchase price. Generally, the deposit is non-refundable, except in the event that the clear title to the property cannot be obtained within the time specified in the initial agreement.
During the period of the initial agreement, you may well then need to obtain finance while the vendor will need to ensure that the title to the property is free and clear of any debts. As the real estate purchase process can take more than six months to complete in Italy, unlike in most other countries of the world, it is quite normal for purchasers to move into residential properties after the signing of the initial agreement before taking possession of the property at final agreement.
The Preliminary Contract
The next step is the preliminary contract. This contract is usually conditional to all searches being clear. It is advisable that you have the right to pull out of the sale and the return of all deposits written into the contract. This is usual practice and protects you in case searches on the property are unsatisfactory or you are unable to get a mortgage. Be warned, however, you won’t be able to pull out at this point just because you have changed your mind.
The Notary
Real estate purchase is overseen to a large extent by a notary. The notary performs more duties than normally associated with notaries in other countries. In Italy they are responsible for legal title searches and checking the property is free of any defects or debts.
Appointing a Lawyer
In Italy the notary acts for both sides, so it is essential to have your own lawyer who will look after your interests. This is particularly important, as there is a law of “subrogation” which means that debts such as utility bills, community dues, local taxes etc., remain with the property. Your lawyer will ensure the property is clear of all liabilities. He will also check ownership rights and that the relevant building licenses have been approved by the local town hall. The lawyer will also keep his eye on the notary and ensure that he is completing all the necessary searches.
The Geometra
At this stage, it is important to get the building inspected or surveyed. No self-respecting Italian would put in an offer without this and we advise that you do the same, particularly in the case of older Italian properties. The Geometra will survey the boundaries of the property for sale and make sure it fits with the legal description laid out in the contract of sale.
However, an architect would be more suitable to check a modern building provided he isn’t the designer, of course. Some purchasers use a geometra, a surveyor and official valuer.
Completion
The final step is the transfer deed. All fees are paid at this point and the notary lodges the deeds with the land registry office
Costs
You will need to build into your budget at least 10% of the purchase price to cover professional fees. A further 10% is needed for property VAT, plus 5% to cover utility connection fees.
Documentation
Documentation is uncomplicated. You will need your passport and an Italian tax number. You can apply for this at the Italian consulate or embassy in you home country. If you are a married woman, you will need your birth certificate or marriage certificate, as the deeds are put in your maiden name in Italy.
Mortgages
Mortgages of up to 70% are available in Italy. It is a good idea to have the offer of a mortgage in place before looking for you property. Typical interest rates are 3.3% (2006) and minimum loans are for €50,000.
Tax Liability
• Registration tax (imposta di registro) is the main tax on property and is levied at between 0 and 10 % of the declared value.
• Land registry First home resident buyers of new or resale properties pay a fixed fee of €129.11. Buyers of second homes and non-residents pay 11 % of the declared price.
• Local community tax or rates, ICI, ('Ichy') is paid annually and is usually between 0.4 – 0.7% depending on the local authority and size of the property. This is usually paid in June and December.
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