A Guide to Buying Property in Italy
Buying property in Italy is generally considered a safe investment. Italy is an attractive real estate market for capital appreciation and the opportunity for a lifestyle change. However, many often find the buying process confusing and complicated.
The conveyancing process and rules in Italy may be different to the system and procedures you may be more familiar with in your home country. This guide takes you through the process and key points to consider.
Before Beginning Your Search
Italy has 20 regions with varying climates, landscapes, and lifestyle activities. If you are unsure where to buy your property, start with deciding what you want by completing a Perfect Property Checklist. Then when you are ready to begin your search, we can help.
Only a tiny percentage of real estate agents in Italy speak a language other than Italian. Unlike other countries, many do not assist buyers with finding a property unless it is one of their own properties. Buyers quickly discover that they often have to work with several listing agents. However, our in-country partners are familiar with Italy’s territories and real estate markets, often speak several languages to accommodate clients and can coordinate interactions with multiple real estate agents.
It is also necessary to have a budget in mind and know the level of renovation you’re willing to take on. With municipalities dating back centuries ago, houses in Italy are comprised of everything from 1-euro homes to move-in ready properties. If you require finance, it is possible for non-residents to get a mortgage if they meet certain conditions. A mortgage specialist is essential in helping you secure a mortgage.
Before you place an offer on a property, you must have a “Codice Fiscale”, a tax identification number. It does not imply tax duties; you can get one free from your local Italian embassy or consulate.
The Buying Process
Once you’ve found your dream home, there are key steps and professionals that comprise the buying process.
Step 1: The initial offer
It is called “Proposta,” a document outlining the offer terms. You might be requested to provide a formal written offer to purchase the property. Under Italian law, an accepted purchase offer becomes fully binding, so it is essential to consider your offer carefully. You may be asked to pay a deposit between 1% and 5% of the offered price, held in escrow by the real estate agency.
Step 2: The preliminary agreement
In Italian is called “Preliminare” or “Compromesso”. It is an agreement listing the terms of the sale of the house. It is signed by both the buyer and the seller, binding both parties to complete the transaction. During this step, the buyer typically pays 10% of the purchase price, and both the buyer and seller pay agency fees which generally amount to 3% each. Typically, the preliminary agreement is signed at the notary’s office.
Step 3: The Deed of Sale
Following the preliminary agreement, the notary performs due diligence checks on the ownership title and prepares the deed of sale transferring the title. Within 3 months, the deed of sale or “Rogito” is signed before the notary. The buyer pays the purchase price balance, and after the signing of the deed, the notary records the transfer of title at the title office and pays the stamp duty and other purchase taxes on the buyer’s behalf. If you cannot travel to Italy and sign the Deed of Sale in person, you may request a Power of Attorney to perform this service on your behalf.
Key Professionals:
Lawyer
An independent lawyer working to protect your interests will ensure your property purchase dreams become a reality, not a nightmare.
Notaio
the Italian Notary Public who acts independently and does not represent the buyer or seller. He is someone the parties must hire and is a cross between a lawyer, notary public, title and escrow officer. His fees amount to a few thousand euros. Their fees are based on the property sale price, generally between 2% and 4%.
Geometra
A mix between a house inspector, contractor, land surveyor, and junior architect, this individual plays a significant role in the purchase of a property. A Geometra undertakes several checks, including confirming the house matches the blueprints on file with the city, is up to code, and has all the proper permits. By law, a property cannot be sold if it does not comply with building and urban planning regulations. The Geometra will also give a professional opinion on the soundness of the property and an estimate for any renovations.
Currency Specialist
A currency specialist will help you get the maximum value from your currency transfer and help protect the cost of your property against currency market volatility by providing the ability to lock in a favourable exchange rate. A small change in the exchange rates could increase the cost of your property by thousands. You should open an account with a currency specialist at the beginning of your property search, and you will be ready to secure your dream property when you find it.
Common Questions When Buying Property in Italy
How long does it take to buy a property in Italy?
It can take a few weeks when things run smoothly, and you do not require any finance. However, it can take several months if there are complications, and you are getting a mortgage.
Can foreigners get a mortgage?
Yes, foreigners can obtain a mortgage. The typical loan-to-value (LTV) is generally 60%. We can help secure financing with competitive terms for foreign buyers. Contact us for details.
What transaction costs do I have to pay?
The total costs paid by the buyer range from 7% to 18% of the property cost. Below is a breakdown of those costs.
• Registration Tax – 2% – 9% (Private Sellers) or 200 Euros (Construction Company)
• VAT on Deed Registration (Construction Company) 4% – 10% – 22%
• Land Registry Tax (Ipotecaria & Catastale) 50 euros (private sellers), 200 euros (construction company)
• Notary Fee 1% – 2.50%
• Legal Fees 1% – 3% (+ 22% VAT)
• Real Estate Fees 1.5% – 4% (+ 22% VAT)
How much will I pay in property taxes?
Property taxes range between 0.4% – 0.76% of the property value stated at the Land Registry. If you are retired, the taxes are halved. If you decide to move to Italy and make Italy your primary residence, you do not have to pay any property taxes.
I thought the seller must pay Real Estate Agent fees?
Italian law requires the Real Estate Agent to be paid a commission by both the buyer and the seller, which is usually between 3% and 6% of the purchase price. Often an Italian Agent will require a foreign buyer to sign a standard Agent’s fee contract, which details the terms relating to the Agency commissions and when they are due.
Help finding your dream property in Italy
With so much choice in Italy, finding your dream property can be overwhelming. Help is available from the team at Overseas Property Forum and our network of experts. Let us help make your dream of a place in Italy a reality.
