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Buying a home in Italy

Buying a property in Italy

Working and living in Italy

Italian Property Secrets

Process of buying an Italian property

In Italy the purchase of an Italian property is a regulated process. To ensure that the Portuguese property you wish to buy is free of debts and restrictive clauses, it is essential to employ an English-speaking lawyer or solicitor to protect your own interests.

You will need a fiscal code, in order to buy property, open bank accounts and pay bills. This can be obtained by contacting the local tax office.

Legal process for buying an Italian property

The legal side for buying an Italian property falls into two parts, the preliminary contract (compromesso) and the completion (il rogito).

Stage 1: Preliminary Contract (Compromesso di vendita)

A purchase through an agency may involve an official 'offer to purchase' by which the prospective purchaser is bound to the offered amount for the duration of the validity of the offer, usually 14 or 30 days. Once a price has been agreed with the vendor both parties will sign a preliminary contract, most usually a Compromesso di vendita and make a deposit of 10%-30% of the purchase price (except in the case of new constructions where this deposit is considerably less). The deposit is forfeited if the purchaser does not proceed, and if the vendor withdraws double the deposit is paid to the buyer by the vendor.

The purchase process differs in many ways from the current situation in other countries and is generally less complicated and quicker, but this is mostly because Italians do fewer checks and searches on property they are buying. To ensure that the property you wish to buy is free of debts and restrictive clauses it is recommended to employ an English-speaking lawyer to protect your own interests.

Stage 2: Completion (il rogito notarile)

The vendor and purchaser must use the same notaio (a notary public who represents the Italian government) to execute the deed. At this point the buyer must pay a property registration fee and a land registry tax plus the remaining balance of the agreed purchase price. Then both vendor and purchaser sign the il rogito notarile, the definitive contract equivalent to the Deeds of the property.

All registered property transactions in Italy must take place in front of a notaio. The notaio’s job is to check that the sale documents are correct, to verify the identities of the parties involved, to collect the tax on the sale due to the Italian government and to ensure that the entries in the land registry are updated to show the new owner.

Costs related to buying an Italian property

Agent negotiation fee

A fee (usually between 2.5% and 3% of the purchase price) is agreed at the outset between the Italian estate agency and purchaser, and is paid on the successful completion of purchase of an Italian property. If you are dealing direct with the vendor of the Italian property, then this fee is obviously not payable.

Property purchase tax

On new Italian properties Value Added Tax (VAT) is payable at 9% for non-luxury property and 19% for luxury property. If the property is not new, then a property purchase tax is paid instead. Purchase tax is levied at 10% for non-residents and at 3% for residents, and gets paid to the Italian Government.

Stamp duti (bolli)

Stamp duty (bolli) is levied at 1% for both non-residents and residents, and gets paid to the Italian Government.

Notio's fees

The notaio's fees usually amount to approximately 2.5% of the Declared Land Value of the Italian property.

Italian survey fees

The Geometra's fees vary depending on what work is involved in the conveyance and is usually of the order of €250.

Example breakdown of costs related to buying an Italian property

An Italian property with a purchase price of €200,000 may have a Declared Land Registry value of €120,000. The purchase tax (or VAT in the case of new properties), notaio's fee and stamp duty (Bolli) are all be calculated on the Declared Land Registry value and not the purchase price. The following table shows a typical total cost breakdown of purchasing an Italian property for €200,000 with a Declared Land Registry of €120,000.

  Resident Non Resident
Purchase price 200000 200000
Purchase tax 3600 12000
Notaio's fee 3000 3000
Estate agency fee 8000 8000
Stamp duty (Bolli) 1200 1200
Geometra's fees 250 250
Total 216,050 224,450

Differences between buying new and old Italian properties

Due to the high demand for new Italian property, most purchasers buy properties "from spec" from Italian property developers. This means that the purchaser will buy new Italian properties from the plans, and select which property they want within a particular development. Typically, purchasers who buy a new property have to make regular installments during key stages of the property development (opposed to paying for the property when it is complete), and an initial deposit of 5% to 10%. The initial deposit and regular installments vary from one Italian property developer to the other.

Note: If you have to make regular stage payments to the Italian property developer you should ensure that you receive bank guaranties for each payment. These bank guaranties protect you in the unlikely event that the Italian property developer has financial difficulties before the property is transferred to your name.

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