Italy Country Guide - Buying In Italy

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Italy is one of the safest countries in which to buy a house thanks to its legal system, requiring strict procedures for property transfer. However, foreign buyers can encounter difficulties in understanding these procedures. For this reason, our agents in Italy will provide you all the necessary assistance to thoroughly understand all of these procedures before taking the decision to buy a property.

INTRODUCTION

Buying a property in Italy is usually arranged in three stages:

- The first stage consists of searching, visiting and selecting the property with the assistance of an agent (Mediatore or Agente Immobiliare). Once the property is selected, the buyer may be asked to sign a buying proposal (Proposta d'acquisto), and leave a small deposit with the agent.

- The second stage is that if the buying proposal is accepted by the vendor, the next step is to sign and exchange the contract (contratto preliminare or compromesso). This is normally a legally binding agreement to complete the purchase by a public sales act drawn up by a notary and to pay the balance of the agreed price on a future specified date. The preliminary sales agreement (compromesso) is a private agreement between the buyer and seller, where the "promising" buyer and the "promising" seller commit themselves in transferring a property. This agreement can be drawn up by the vendor, agent or a solicitor/lawyer. Since it is a complex legal document, it should always be submitted for advice to, or drawn up by a specialised Italian lawyer.

- The third stage consists of the completion formalities. The sale will be completed by a public notary when the final deed (rogito) or conveyance of transfer is signed. The notary issues a certified copy of the deed of sale and registers the original document with the land registry, which makes the buyer the legal owner of the property. The notary checks that the title deeds are in order, that the property is legally registered and that it has no illegal buildings. In Italy only a notary is entitled to validly transfer title to property. The notary drafts the Purchase Deed (rogito), ensures its proper execution, registration, and payment of all Italian taxes connected with the completion.

Usually the sales price declared on the deed is lower than the actual sales price. This is a common practice by which the buyer can lessen the impact of purchase costs as the notary's commission and the purchaser's registration fees are based on the declared sales price - not the actual sales price.

The notary usually charges about 1.5 - 2.5% of the declared sales price.

Solicitors and Estate Agents

In view of the legal and practical difficulties involved in buying a property in Italy, it is highly advisable for foreign buyers to obtain the assistance of a specialised Italian lawyer, preferably one who can speak fluent English, to act on their behalf. He will be in charge of drawing up contracts, contacting the Notary and giving all necessary legal advice.

Purchase Taxes

Registry taxes for buying a property in Italy are usually between 3 - 10% of the declared purchase price:
3% for residents (only for their main residence)
10% for non-residents (or for second houses)
18% for agricultural property

Property Taxes

Non Residents owning a property in Italy have to pay the following taxes:

Income Tax (IRPEF)
Non-residents must submit a tax return stating the details of their Italian property. If they let the property, they should declare the yearly rent, otherwise they should only declare the cadastral rental (usually quite low). There is a no-tax area for yearly income below €5,000.00.
The Local Community Tax (ICI)
This is between 0.4% - 0.7% of a property's cadastral value (official value in the Land Registry), to be paid in two yearly installments.

Restoration or Construction

In order to proceed with the restoration or the construction of a building, it is necessary to obtain the services of a licensed surveyor (Geometra), or an Architect. All major construction or restoration works require the presentation of a request for authorisation to the local commune, signed by the owner of the property and a licensed technician. In the case of light restoration works (internal walls, painting, floors, window and door frames etc.) it is sufficient to present a particular request called a DIA (dichiarazione di inizio attività), signed by a technician.

Mortgages

It is currently reasonably cheap to get a loan from Italian banks which lend amounts against purchase prices of up to 100% (usually 70-80 %).

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