There are many reasons why expats and investors search for properties in Italy, whether it be the stunning beaches, hills and lakes, the ancient rustic beauty, fantastic climate, or the excellent food and wine and laid back Mediterranean lifestyle.
We are exceptionally spoiled to have all of these amazing qualities in our lifestyle not to mention properties for sale such as detached villas complete with a swimming pool, or an authentic restored trullo, an apartment in a historical city all for the same price or less as many parts of the UK.
Buying a property in Italy can be a tricky process when you are not aware of the procedures and this is where dealing with a trusted agent is essential as you can rely on their expertise to guide you through the sales process as smoothly and efficiently as possible.
To be a licensed real estate agent in Italy, it is essential that a course and exam are completed before obtaining the license. There are people in other professions such as architects, engineers and surveyors that are “so called agents” but are not legally able to trade without a license. Therefore, if you are purchasing a property through one of these types of agent, with no license you are not protected throughout the buying process should something go wrong. Should you decide to purchase a property without the services of a professional agent, the choice is completely yours but we suggest not to run the risk of losing your investment. It is also prudent to check that the owner is actually legally the owner and has the right to sell the property and that there are no outstanding debts or rights attached. It is also worth bearing in mind that for any properties, especially those that have undergone a restoration, it is essential to check that the restoration or property has been approved by the local authorities.
That said, once you have decided on a property, the first thing to do is make an offer. In the event of a property being sold directly by the owner, here is a step by step guide:
1) Check out all the documents on the property.
Property title. This is one of the most important documents regarding a property, by which are identified the owner/s who therefore have the authority to sell the property, the cadastral details of the property (the cadastral parcels), the permission of building etc.
Permission of Building. The permission of building is a document needed in the purchase process, as here it is specified if the property has been built according to Italian laws (“Testo Unico dell’Edilizia”); if a house has, for example, a room that is not registered on the floorplan or does not have a planning permit, the property cannot be sold. On the contrary, if there is the possibility to submit a planning permit to the “commune” (local council) where the property is located in order to “legalise” what is not registered, the owner must do it. Once the owner obtains the planning permit, the ownership of the property will be transferred from him to the buyer in front of the Notary Public. In some cases, planning permission is not required, which may seem strange to you: until 1 September 1967, planning permits were not required to build a house in the countryside, therefore if the building you are going to acquire is mentioned on the property title of the seller as “fabbricato rurale, rudere, trullo, masseria” etc. “built before the date above”, the planning permit is not needed.
Cadastral searches. The cadastral searches include the “visura catastale”, which is a document issued by the Italian revenue office that specifies the details of the property identified on the map of the area, and the “”planimetria catastale” (the floorplan registered at the revenue office). All of these documents should be collected by the agent before the property is put up for sale.
Energy performance certificate (“attestato di prestazione energetica” – APE). It is required by law to attach this certificate to a deed of sale, and also to a rental contract. Basically, it contains information about a property’s energy use and typical energy costs and recommendations about how to reduce energy use and save money.
Legal inspections (people checks and debt checks) are carried out by the Notary, who is a public official responsible for the stipulation and the registration of the Final Public Act.
Usually, the real estate agent checks all the paperwork before the preliminary contract is signed in order to protect the buyer. Of course, you have the option to have a “geometra” (surveyor) help you in buying a property, and to contact a lawyer for your own peace of mind. But through the agent these costs can usually be avoided. Basically, a property should have: the title, a cadastral plan registered at the Registry Office, the Energy Performance Certificate and the Permission of Building. As mentioned above, in some cases, a planning permit doesn’t exist if the house was built before 1 September 1967. From that date onwards, the law also termed in Italy “Legge Ponte”, requires a planning permit to build in the countryside. In these specific cases the Permission of Building is not required.
2) Obtaining a fiscal code (“codice fiscale”),
The “codice fiscale” in Italy is similar to the National Insurance Number (UK) and the Social Security Number card (USA). It basically serves to identify unambiguously individuals residing in Italy and enables a bank account to be opened, obtain connection to utilities etc. It is issued by the Revenue Office (“Agenzia delle Entrate”).
3) Opening an Italian bank account.
An Italian bank account is useful for purchasing a property (in order to pay the balance to the owner of the property with Italian funds), to pay utility bills, taxes etc.
4) Irrevocable purchase proposal (“Proposta irrevocabile d’acquisto”).
The irrevocable purchase proposal is a document drawn up by the registered estate agents and represents the intent by the purchaser to block a property. Usually it is signed by the buyer first, and includes all the details of the property, including cadastral details, the offer made by the potential buyer, the amount of the deposit etc.
5) Preliminary contract of sale (“Compromesso/Preliminare di vendita”).
The preliminary contract, also known as a “compromesso” or “preliminare di vendita” in Italy, is a legally binding contract drawn up by the estate agent, a lawyer or a notary public, which establishes the selling price agreed to by both parties, the date by which the sale will be stipulated in front of the notary public and other agreements if any. This contract is recognised and governed by the Italian Civil Code.
6) Final deed (“Rogito/Atto pubblico di compravendita”).
The final deed (or deed of sale) is the public document through which the property is transferred from the owner/s to the buyer/s, and is stipulated by the notary public (a public officer representing the Italian government and standing as a neutral party) with all the guarantees that a notary offers. The balance to the seller is paid at this stage, and the means of payment are mentioned on the deed. If you don’t speak Italian, the law requires you to have a copy of it translated into your own language, and the presence of a translator at the signing of the deed, unless the notary speaks your language. Once the final deed is stipulated, the notary will provide to register it at the Registry Office (“Conservatoria dei Registri Immobiliari”) within one month from the stipulation of the deed of sale.
7) Agent’s fee.
The estate agent in Italy according to The Italian Civil Code (art. 1754), does not work for a party in particular, and his own activity consists in bringing into contact two or more parties for the conclusion of a deal. Basically, both the seller and the buyer avail themselves of the service of the estate agent, who charges a fee (commission), which is usually 3% plus VAT of the agreed selling price.
Please note that the commission is not shared by the parties (the seller and the buyer) but is paid by both parties.
Taxation all depends on whether you wish to establish your residence in Italy and the figures illustrated below are just examples and not a definitive tax guide. For specific and accurate tax costs, please seek advice from your accountant. If you are a resident, you will pay a notary’s fee (it depends on the property price), a registry tax of 2% of the cadastral value, a fixed cadastral tax (€ 50), a fixed mortgage tax (€ 50, nothing to do with mortgage). If you are not a resident, you will pay a notary’s fee (it depends on the property price), a registry tax equivalent to 7% of the cadastral value, a cadastral tax equivalent to 1% of the cadastral value and a mortgage tax of 1% (nothing to do with mortgages). The taxes are calculated on the cadastral value of the property which is lower than the commercial price of the property. This means you will pay less tax when stipulating the final deed of sale.
Buy a property in Puglia or Valle D’Aosta
HelloGroup’s real estate division specialises in offering Buy to Let property solutions for expats and overseas investors in Puglia and Valle d’Aosta and assisting our clients to start their new life in Italy. Due to the increase in growth and demand in both regions and to the popularity of Holiday Rentals we have created an innovative formula to assist our clients throughout the entire purchase phase from viewing to potential renovations, right up until the moment the contracts are signed.
Please do not hesitate to contact email@example.com with any queries that you may have with regards to buying a property in Italy, we will be delighted to assist you.
Unity Financial Partners invited the HelloGroup’s real estate division to write an article explaining the process of how to purchase a property in Italy.
The contents of this article have therefore been provided by HelloGroup and Unity Financial Partners is not responsible for the accuracy of the information provided.
If you are interested in finding out more about how Unity Financial Partners can help you with your personal financial planning needs as an Italian resident please contact us on the following link: http://www.britishinitaly.com/contact-us/