How to buy a property in Italy
Just like in any other Western country, buying a property in Italy means complying with a bureaucratic process defined by the law. Nevertheless, some optional documents and practices can help you avoid unpleasant episodes which may cost you time and, above all, money. In this handy guide, we describe the official process, and offer advice on how to invest with a certain degree of safety.
It is good practice, once you have pinpointed your property, to ask for the „atto di provenienza dell immobile“ or Title Deed. This is the public document drawn up by a notary proving the vendor’s right of ownership. Not everyone knows about this document (even real estate firms rarely ask for it or provide it) but this deed certifies the actual ownership of the property and the circumstances of that ownership.
The title deed is useful not only to expose scams but also to understand if the property is fully owned by just one person or is in joint ownership.
The second important detail to check is that the property is not currently subject to a mortgage. The „Conservatoria dei registri immobiliari“ is the competent body for this matter, and the check is normally carried out by the notary before completion of the notarized deed.
The „visura catastale“ or cadastral survey should be obtained from the vendor before the notarized deed of sale. The cadastral survey is simply a small-scale reproduction of the plan of the property drawn up by a qualified expert and presented to the cadastral office. If the cadastral plan differs from the actual situation of the property, it must be rectified by submitting a report of variation, which can incur additional time and costs.
Since 2013, owners of properties in Italy must hold an energy performance certificate („Attestato di Prestazione Energetica“, or APE) drawn up by a recognized expert and provided by the vendor by the time the two parties meet at the notary‘s office to sign the transfer of ownership.
For properties like flats, that are part of an apartment building with more than eight units, Italian law requires the administrator of the condominium to release a statement verifying that the vendor is up-to-date with payments, and the copy of the last two sets of minutes from the owners‘ meeting. All this is necessary to avoid future hidden costs to the buyer.
Once the verification process has been successfully concluded (including facilities such as the electrical and water supply), and the two parties have reached an agreement on the purchase price, the next stage is drafting the contract between the two parties, the so-called „contratto di compravendita“.
A preliminary purchase agreement is an essential step in any property buying process that outlines prices and terms for real estate transactions. Every element of the sale is covered, from the deposit to disclosures. The goal is to protect both the buyer and seller, and to ensure that all expectations are clear.
In Italy the „contratto di compravendita“ is a legally binding document which may be enforced by a court. Unless not specified on the contract, a withdrawal by one side may trigger a financial reimbursement to the other party. If you are not used to the legal system in Italy, we would advise contacting a reliable notary to handle this stage
The preliminary purchase agreement must be registered within twenty days of signing, along with payment of a small tax.
Notary and Deed of sale
The investor needs a notary anyway, as the next stage is the notarized deed of sale. In Italy it is the buyer who normally chooses the notary. The notary is ultimately responsible for ensuring that the transfer of the property is carried out in the correct and legal form. Prior to completion they must verify that the owner has the title deed, that the property is available for sale and that there are no encumbrances (outstanding debts/mortgages or third-party rights, etc)
The deed of sale will include a list of authorizations, details of the method of payment of the deposit and balance, as well as the energy performance of the building and details of tax (VAT or registration tax, and any tax benefits applicable) on the purchase.
The notary will calculate the taxes due on the transaction, collect them and pay them on behalf of the parties. The language of the deed will be Italian, as the jurisdiction and laws that govern the contract are Italian. For foreigners an interpreter may be available.
Lastly, the notary handles the formalities following the deed, such as registration (for payment of taxes) and transcript (to make the deed not opposable to third parties).
Once these procedures have been finalized the transaction is officially public. The notary will keep the original deed in their files and the buyer and seller will receive an authenticated copy.
Other formalities - Opening a bank account.
In the event of a successful purchase it is essential to open a bank account in Italy not only to transfer the funds for completion but also to arrange for the various utilities to be paid automatically. To open an Italian bank account, you need a „Codice fiscale“, which is an identification code like a social security number, issued on request by the Agenzia Provinciale delle Entrate.
The taxes for buying a property in Italy are between approximately 10 and 20 percent of the purchase price. Depending on circumstances, there may be tax reductions for first time buyers, young couples and so on.