There are no restrictions on foreign ownership in Italy.
Any money remitted from outside Italy for purchasing property, should be officially documented to ensure that the proceeds of any resale can be repatriated.
Italian and British sale approaches differ substantially one to the other, and often unfortunately a lack of correct information leads suspicious reaction and mistrust, heading eventually in a painful transaction process all the way through.
The Italian business model emphasizes the role of the intermediator [the agency] and the super partes governmental inspector [the notary, notaio]. No double solicitors involved.
The agency in between the parties is in charge of negotiation and legal matters to finalize the preliminary contract acting for the good of both and charging double fee.
The seller or his conveyor [geometra], if the seller prefers or needs to appoint one, do the legal searches and prepares the supporting documents including cadastral checks [title register and land register] to inform of any liability that the property may have.
The transaction is closed by the notary [notaio] after his final review and due diligence on the property.
Should the buyer prefer to hire another conveyor [geometra] or a lawyer to double check the documents and the state of the property, it is advisable to do that before signing the preliminary contract [compromesso] as this binds the parties to pre-contractual liabilities.
LETTER OF INTENT TO PURCHASE
Once you have chosen the property, make an offer. You must down pay a forfeit symbolic amount in order for the agency to keep the property out of market within a restricted period of time and your offer to be seriously consider by the seller. The amount is return,if the offer refused, or included in the preliminary contract down payment, if the offer accepted.
THE PRELIMINARY CONTRACT
If the seller accepts your offer, the next step is to draw a preliminary contract, so called ‘compromesso’, which bounds both parties. It’s containing the sale price, the amount to be paid as deposit, the completion date, the land boundaries and details of the property, and any other relevant clauses (i.e. water rights and rights of passage).
All the information regarding the property and the seller are going to be check later by the notary with a proper due diligence.
Upon signing of the ‘compromesso’, the deposit is raised to 10% to 20% of the sale price, depending on what has been agreed. Since, Italian law provides for pre-contractual liability, in the event that you decide not to pursue the purchase, the ‘compromesso’ will be forfeited or the seller may seek legal action to enforce the purchase. On the other hand, if the seller backs out, he will be liable to pay double the amount you have given as deposit.
The compromesso is drawn by the agency that acts as middle-man with the purpose to close the deal for the good of both parties.
Should the buyer prefer do not rely on the agency assistance only, he can consider to seek an extra assistance by a conveyancer (geometra) to double check the property documentation and the compromesso content before to sign it.
Any extra-legal assistance is negotiated directly by the buyer and is not included within the agency fee.
Many guides in internet suggest to hire an exclusive assistance in order to protect to buyers in foreign countries by unforeseen inconveniences.
OUR FREE COMMISSION POLICY intends precisely to help you to contain your bill, should you find yourself more comfortable and reassured in hiring your personal technical-legal assistance for double checking or extra services as translation, interior design and contractors, moving,…
DEED OF PURCHASE
Closing usually takes six to eight weeks. The ‘notaio’ or notary public has the responsibility of performing due diligence, he is chosen by the buyer, and acts for both parties and ‘super partes’ as guarantor of governmental laws. When the check has been conducted, a date is arranged for transfering the deed or ‘rogito’ (witnessed by the notaio). This requires you to present a valid identification document, and your tax code.
The ‘notaio’ will issue you a copy of the deed and present copies to the tax office and Land Registry. The necessary government duties must be paid for the sale to be officially registered. Registration protects the property from third parties charging any other interests against it. The ‘notaio’ will also ensure that the utilities have been transferred to your name, and inform the local police of the change of ownership within 48 hours of signing the deed, in compliance with anti-mafia laws.
It takes an average of 15 days to complete all the four procedures needed to register a property in Italy.
TRANSACTION COSTS IN DETAIL
(Imposta di Registro)
Land registry tax
These are the 3 main taxes you have to pay when you purchase your home in Italy, in addition to other minor taxes.
The “cadastral declared value” of the property on the Rogito (deed of sale) usually represents the basis (base imponibile) upon which the these 3 taxes are applied, and it can be considerably less than the commercial value since the latest appraisals go back to many years ago. But the government is currently updating these values. However, the “rule of the cadastral value” is not always applicable. For instance, if the buyer purchases a property as a company and not as a private entity, the base upon which taxes are applied is represented by the commercial price of the property.
The amount of these 3 main taxes varies depending upon the type of property as well as the subjective characteristics of both the seller and the buyer:
A) Deeds of purchase stamped at the appropriate stamp duty = if the seller is a PRIVATE OWNER – REAL ESTATE AGENCY – DEVELOPER or RESTRUCTURING COMPANY that sells after 5 years from completion of work and opts out of the VAT regime:
- Stamp duty:– 2% for primary home (always applied on the cadastral value);- 9% for second homeapplied on the cadastral value if the buyer is a private entityapplied on the purchase price if the buyer is a business entity>> €1,000 is its minimum payment due.
- Land registry tax: €50 (fixed rate)
- Cadastral tax: €50 (fixed rate)
B) Purchase subject to VAT (Value Added Tax) = if the seller is a DEVELOPER or RESTRUCTURING COMPANY that sells within 5 years from completion of work or that sells after 5 years from completion of work and opts to charge VAT on the sale:
- VAT (applicable on the purchase price agreed and stated in the act by the parties):- 4% for primary home;- 10% for second home;- 22% for luxury home.
- Stamp duty: €200 (fixed rate)
- Land registry tax: €200 (fixed rate)
- Cadastral tax: €200 (fixed rate)
- Duties: €230 (fixed rate)
- Land registry fee: €35 (fixed rate)
- Cadastral fee: €55 (fixed rate)
The standard agency fee in Italy is 3% for the buyer and 3% for the seller, regardless of the type of property (commercial, residential, or land sales).
The agency’s fees includes the cost for promotion and negotiations and to draw the preliminary contract or a compromesso to be submitted to the notary. The agency fee is payable on signing the preliminary contract.
Abita-Italy performes all agency duties on behalf of both parties including negotiation and finalizing the preliminary contract.
Our prices are INCLUSIVE of buyer commission. NO agency fee to be added on top to the listed price.
Notary fees generally range from 1% to 2.5% of the declared value of the property. The cost of a notary is based on a property price list prepared by the Bar Association and varies according to the town council (and is subject to 22% VAT). The notary fee is payable on signing the deed transaction. There are widely varying estimates and everything is up for negotiation.
They may include the help of a lawyer for legal issues; a surveyor or an architect for the property inspection; a translator and a moving company. Also consider mortgage fees in case you need to establish a loan.