Before you buy
The legal side of a purchase
The italian notary
The property buying process
Taxes on real estates in Italy
The running costs of a house
The property ownership issues
The italian property market
Restoring an italian property
ICI 2007 - General Guide
ICI 2007 - Town of Gaeta
ICI 2007 - Town of Formia
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The property buying process in Italy :
Forget all you know about buying a home in the UK, the US or wherever. Some of the procedures and terms which may be familiar and easy to recognise in for you the UK or US house-buying process may be completely different here in Italy.
Your offer to the seller is normally made via
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the Italian estate agent (agente immobiliare). As an indication of good faith this will usually include the payment of a small holding deposit, displaying your commitment to buying the property in Italy. The offer usually includes the delivery of a small payment to the agency.
There are three basic steps when buying an Italian property:
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Step 1: Proposal of purchase (proposta di acquisto)
This document is a first formal written offer on the property in which the purchaser acknowledges that, having seen the property, he wants to make an offer clarifying his terms
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regarding timing and methods of payment, survey, etc. It is the norm to expect from the purchaser a non-negotiable bank cheque as a deposit corresponding to 2-3% of the purchase price, which becomes binding if the offer is accepted. This deposit is held in a special bank account under the estate agent’s responsibility.
This deposit has 2 main functions: the first is to enhance your chance to buy the property before somebody else launches another offer on your chosen property.
This means that other clients will not be able to visit the property or to put an offer in for it. Secondly this deposit allows us to commence the legal procedures to draw the final contract of sale. Important noticing that if you withdraw from the purchase for any reason the deposit will be not refundable. On the other hand, if there is an irresolvable problem with the seller documentation or the seller withdraws you will get the full deposit back.
Something worth mentioning here is that until we get to preliminary contracts this offer is binding only upon the buyer not the seller. This has specific implications. First you need to make your offer dependent upon the property fulfilling certain criteria. You may also want to put a time limit on your offer and in this way avoid the frustration of being left in a limbo watching other suitable properties being sold, only for the seller then to decline your offer for whatever reason.
Our tips and hints at this stage
 It is possible to draw up a detailed document including a promise to buy (proposta irrevocabile d’acquisto) and a promise to sell which is signed by both the buyer and the seller. This document includes details regarding the property for sale, names of the parties concerned, the agreed purchase price, and the planned date for signing the preliminary contract of purchase (compromesso). A cheque deposit for a nominal sum from the purchaser will then be held by either the notary or your estate agent. This sum will be returned when the compromesso is signed. As mentioned above, the buyer will lose this deposit if he backs out of the sale once this agreement has been signed. However, the deposit will be returned to you if the sale falls through for any other season.
Don’t transfer all your money into an Italian account. You have to be careful and make ensure you don’t become liable to Italian taxation. Important is the location of your assets. Italian bank charges are high and bank services here hardly match the efficiency and competitiveness of their UK and American counterparts. We advice to keep a home or offshore bank account and transfer cash into an Italian account only when you need it. These days, with electronic and internet banking and credit and debit cards, you don’t need a local bank branch anymore unless you decide to retire or work permanently in the country.
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Step 2: Preliminary purchase contract (compromesso)
If the seller accepts your offer, the two of you have then entered a first binding deal which is then formalised via the compromesso. The compromesso is the initial document
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involved in real estate sales in Italy. It is also known as preliminary contract of sale (contratto preliminare di vendita). This is a first binding document upon both vendor and buyer but it does not confer final ownership nor does it preclude the rights or claims of third parties over the property.
The final ownership is guaranteed only when you sign the deed of sale (rogito) and have it registered at the land registry. We arrange for the 'compromesso' to be drawn up and usually signed 1-3 months later. Once this contract is signed and the deposit (caparra) of the purchase price paid, the seller may only withdraw if he pays double the caparra (deposit) amount to the buyer or should the buyer wish to withdraw, he will lose his deposit.
At this point you must seek legal advice. Remember that the notaio is not acting only on your behalf, but is a rather neutral officer who makes sure that all is done under law. Doing things legally, does not necessarily mean that you will get the best tips on how to structure your purchasing contract.
This contract is formally binding both parties and clearly states that Mr Rossi promises to sell to Mr Smith, who promises to buy.
Mr Smith has to deposit a sum usually corresponding to 10 up 20% of the agreed price (caparra confirmatoria) which includes the previous 1% already deposited. This deposit will be discounted from the final sum.
The notary will then require about a month or two to make all the necessary legal searches and prepare all the paperwork needed for the final document. Steps 1 and 2 can be carried out at the same time in some occasions. In other words stipulates that both parties agree to buy and sell the property, and concur on the terms and conditions of the sale. At the time of signing, the buyer will usually pay a deposit of between 5 and 10 per cent of the purchase price. The contract is usually prepared by the real estate agent. Do not worry about. This is the norm and isn’t quite as daunting as the idea of an English estate agent preparing a legal contract on which your future dream home relies on. In Italy the agents have professional qualifications and a specific competence regarding this aspect.
Our tips and hints at this stage
The compromesso should fix the price, and list any deposits that you have lodged against the final selling price.
It should state when you expect to take possession of the property: generally speaking on the signing of the rogito, but you can also decide a deadline date here to move things along.
The buyer should get a detailed description of what he is buying here, with clear reference both to the ground it covers and to the physical look and structure of the property. All this information will be obtained from the land registry.
It should also stipulate the movable as well as the immovable valuables of the real estate you are buying as well as its liabilities connected with the ownership. Does the parking space come with the house? Do you own the products that grow on the olive groves in the land you are buying with the property or does Mr Bianchi down the lane have rights over your olives?
If your property is part of a condominium the document should separate the common and private parts, and detail the rights and responsibilities of the other condominium members and partners.
Amendments to the basic right to ‘force the sale’ or exact compensation should be inserted at this point if desired. And you (or the seller ) can insert conditions here (clausole resolutive), giving you a smoother and legal way out should unwanted details come to light during the property surveys and the sale process.
You could try to bargain further and make your purchase subject on planning permission being granted for extensions, conversion or upon a new swimming pool: you may sincerely be told that it has been granted, but they may be mistaken by complex red tape procedures. Better protect yourself and eventually insert conditions to this regard.
At this stage you may ask insert specific clauses codas on there being no pre-emptive buying rights, or stipulate that if there are they cannot be endorsed. You might make it subject upon your mortgage application being accepted, or over your existing home sale within a specific date. Most important of all, make it contingent upon the seller owning the title deeds to the property.
After the compromesso
Once you’re happy with every aspect of the compromesso, it’s time to hand over the deposit. It could be as little as five per cent, but it may be much larger. There are pros and cons on either side. On the other hand, with a larger deposit of over 20 or 30 per cent, you will have the advantage of forcing the sale. In fact, a seller is less likely to pull out if he has to refund twice 30 per cent as a penalty for declining the sale. By giving out a larger sum, you might have to fight to reclaim a much larger chunk of your cash, weakening your chances to buy something else.
Remember here that though the sale isn’t complete, at this stage you are both bound by the compromesso, a solid legal document. An attempt by either side to back out gives you (or them) the right to force the sale through or seek for damages. For their part, they can keep your deposit should you renege. You can register the compromesso, protecting your deal (at least in part). You’ll have to pay for this, but it’s worth doing particularly if there is to be a long delay between compromesso and rogito.
You are ready now to take the last step. The final stage is the signing of the deed of sale (rogito) the equivalent of completion in a UK property transaction. Just as at home, there is a long and anxious wait while the checks and surveys are made.
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Step 3: Final purchase contract (rogito notarile)
The final contract, (Rogito) is usually signed within two up to three months from the compromesso. The Rogito takes place in the notary’s office, only after all details regarding |
the property and the purchase have been checked in advance. All parties are required to be present for the signing of the final contract, though if this is not possible (or if the purchaser does not speak Italian well enough to follow the entire process) then we can arrange to represent you with a power of attorney.
Now we come to signing the completion date or data del rogito. You’re just one step away from owning the home of your dreams in Lazio, between Rome and Naples. The signing equates to ‘completion’ in a UK property transaction.
It’s possible that if you are buying from overseas you won’t be able to be present at the allotted date of signing. No problem, you can assign your power of attorney to a friend or to us, your agent in Italy. You’ll also need to present a passport or other valid identification, and ensure the funds or mortgage are in place.
Balance and timescale for releasing the total payment is given to proprietor, and on final signature purchaser becomes legal owner and receives the deeds to the property and the keys.
Now is time to take a deep breath and be ready for the next expenses on your new real estate in Italy. You’ll be paying for the purchase:
Real estate tax (imposta ipotecaria e catastale) of 3 per cent
Stamp duty of 7 per cent
Mortgage fees , estate agents’ fees and notary fees .
In Italy , both vendor and purchaser pay the estate agent, the percentages established by the Chamber of Commerce of latina is 3 per cent plus iva (3,6 per cent total) for both vendor and purchaser.
A quick shop-around and price check either online or via other local estate agents and you will have a clear idea of our favourable fee as estate agents. Finally, before enjoying your dream home you will have to open your wallet to pay your (much smaller) fees for connecting to the water, electricity and gas mains. We will give you more details of these later on.
Current set of laws set the purchase tax on first residences in Italy at 3%, but for this to apply the purchaser must establish residence in Italy. If it is not your first residence here, or if you do not wish to establish residency here, then the cost will be 10% for the house . Please note that it is normal practise for these taxes to be calculated based on the cadastral value .
Our tips and hints at this stage
The power of attorney is worth to be considered and advisable if the buyer has a hectic, busy, professional life which could make difficult planning frequent trips required to buy the property. A sudden, important business meeting may force you to cancel your flight booked to sign the final contract within the agreed timescale. The buyer has two options worth to be taken into consideration (just in case):
Power of Attorney signed in Italy.
Power of Attorney (procura) is need when the purchasers do not speak fluent Italian and would not be aware of what they were signing. Therefore this is not legitimate under the Italian law which is very clear to this regard. The Power of Attorney enables us to attend and sign on your behalf the relevant documentation. This must be in the Italian form and signed in front of an Italian notary.
Power of Attorney signed abroad.
If you can’t or don’t wish to sign the power of attorney (procura) in front of an Italian Notary we can arrange for you to draw it up and sent to you. You can then print it off and sign it in the presence of a solicitor/notary in your country. You have to send or take it to the Foreign Office in your country who needs to stamp it and then send it back to us in Italy. After we receive it, we can then sign the compromesso or final contract or even both on your behalf, without the need for you to come to Italy. If the buyer wishes to be present but the notary considers that he/she does not speak good enough Italian to understand completely, and then the agent can sign on the buyer’s behalf.
We do not advice you to pay in cash or with banker’s drafts which can go astray. A better and more secure method of payment could be to arrange an electronic transfer in good time.
Ensure you or someone on your behalf physically checks over the property before the completion date. This won’t stop them subsequently removing a nice garden table or the precious antique lanterns at the last minute. It is always a good thing to double check you get what you have been promised if you buy a furnished property. This may be easier after the excitement of first viewings is over and before your money is changing bank account!
For completion you’ll need to have your tax code and we can arrange this for you.
Your notaio must file and register the title deeds (and lodge your taxes) immediately. Only when the deeds are with the land registry is the property yours, so this is important.
The notaio must also inform the local police (carabinieri or questura) of the change of ownership within 48 hours and ensure that utilities have been changed under your name. We can also double-check these details on your behalf.
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