- Things you should know about buying and selling real estate in Italy
- Step 1: binding proposal of purchase or "Proposta Irrevocabile d'acquisto"
- Step 2: Preliminary purchase contract or "Contratto preliminare"
- Step 3: Final purchase contract or rogito notarile
- Other costs associated with buying a property in Italy:
Things you should know about buying and selling real estate in Italy
First of all, we strongly suggest the use of an accredited realtor. He/she should guide you toward all the steps. Please verify that your real estate agent is licensed by the Chamber of Commerce.
A foreign citizen who wishes to purchase property in Italy must first of all obtain a tax identification number (codice fiscale). This can be requested at any government financial office or at an Italian Consulate or Embassy. This request should be submitted on the relevant forms along with a photocopy of one's national passport. It is also possible to have the request submitted by a person entrusted with this task through a proxy prepared by an Italian notary or by a Consulate or Embassy. Please note that married women should only use their maiden names for the request. A Codice Fiscale or tax identification number is essential for:
- Signing the preliminary purchase agreement ( "Contratto Preliminare" or "Compromesso" )
- Requesting bank financing
- Opening bank accounts
- Concluding the final purchase agreement with notary
- Purchasing a car
- Arranging public utilities contracts (gas, water, electricity, telephone)
- Presenting declarations as needed to public offices , whether communal, regional or state
Generally, there are three steps to buying a property, as explained below:
Step 1: binding proposal of purchase or "Proposta Irrevocabile d'acquisto"
This document is a written offer on a property in which the purchaser acknowledges that, having seen the property, he wants to make a binding offer stating his terms regarding the timing of the transaction, financing, guarantees, etc... He is expected to sign a non-negotiable bank cheque on the name of the seller or alternatively process a bank transfer to the account fo the seller, corresponding to a small percentage of the purchase price (nornally between € 10.000 and € 20.000) which becomes binding if the offer is accepted. This proposal can be prepared by the Agent: it is quite simple and doesn't involve the Notary.
Step 2: Preliminary purchase contract or "Contratto preliminare"
This contract, which is binding on both parties, clearly states that the seller promises to sell to the buyer, who promises to buy. The buyer has to deposit a sum usually corresponding to 10/20% of the purchase price (caparra confirmatoria) which includes the despoit previously paid for the "Proposta d'acquisto". The Notary will then require some time to make all the necessary enquiries, e.g. find out if there are legal problems or if there is a mortgage on a property, and prepare all the paperwork needed for the final document.
In some cases, steps 1 and 2 can be carried out at the same time.
Step 3: Final purchase contract or rogito notarile
This final contract is signed in the Notary's office. Balance of total payment is given to proprietor, and on final signature purchaser becomes legal owner and receives the deeds to the property and the keys.
Other costs associated with buying a property in Italy:
Foreign clients often ask "...but how much are the extras?". It is often difficult to be exact about this figure. However, the following should make it clearer and easier for the client to at least understand why.
All properties in Italy are registered at the local land-registry office (catasto) and as far as the Italian state is concerned are given a certain value depending on district, number of rooms, etc. This value can differ greatly from the property's commercial value, perhaps because the property has recently been restored, or it's in a wonderful position with a great view, etc.
When a house is sold it has to be registered. The registry tax (imposta di registro) is 3% on a first house and 7% on a second property. This applies for Italians too, not just foreigners. The registry tax is calculated on the value stated at the land-registry office which can be considerably less than the commercial value. Here is a simple chart:
Government taxation on purchase of properties:
First house 4%
Second property 10 - 20%
Historical/ listed 10%
First house 3%
Second property 7%
Historical/ listed 3%
Mortgage + Catasto (Euro)
First house 168+168
Second property 3% + 1%
Historical/ listed 2% + 1%
* You will be liable for either VAT or registration tax. VAT is applicable on purchases from a company, whereas the registration tax applies to private purchases.
The agency fee is usually 3% plus VAT (I.V.A.), and is payable at the signing of the preliminare contract.
All property transactions must go through a notary who is appointed by the buyer. There can be a slight variation in price between notaries, but not much. Notary fees on a property of Euro 250,000 would be from Euro 1,800 to 2,000. The higher the price of a property, the higher the notary fees are likely to be.