Useful Info
There are no restrictions on foreign ownership in Italy.
Buying a Property in Italy
There are no restriction for non-residents wanting to buy a property in Italy, but you will need to apply for the tax identification number, being registered with the Italian tax authorities, the so called CODICE FISCALE.
The procedure of buying a property starts with an eximination of the paperworks relating to it, as the information held by the public land registries which inform all the facts concerning ownership, charges and debts that can affect a property. This information is contained in a certificate and is protected by law. Title deeds of the property and related documents will be checked by us in order to take the decision about carry on with the purchase or not.
Italian law requires all contracts relating to land or buildings to be in writing, signed by both parties. An English translation of it will be provided with the contract.
“OFFERTA” You can be offered a reservation contract, reserving the right to buy the property for a fixed period of time by means of the payment of a small deposit. Once you are happy with the terms of the contract, we will instruct you to pay a preliminary deposit, usually about € 3.000,00 . This should be followed by signing the main contract, two to three weeks later, after checks on the property have been carried out.
“COMPROMESSO” It is a private contract of escrow signed by the buyer and the seller (or their representatives). The buyer must produce a deposit guarantee (usually between 10% and 30% of the purchase price) to the seller, which will engage both the buyer and the seller in a contract to complete the sale within an agreed period of time. If the seller does not complete the sale, he is required to refund the deposit in full plus the same amount again as a penalty for damages. If the buyer does not complete the sale, he will forfeit the full amount of the deposit.
“ROGITO” The public title deeds of purchase will then be signed in completion of the sale at the notary’s office. The Italian Notary purpose is to witness the signature of the title deed and other administrative functions. Buyers become the sole owners and the property is immediately registered in their name. The Rogito can be signed in your absence in person or through us as your representative by means of a Power of Attorney. In this moment the balance of the price of the property must be paid, and also the tax funds must be issued.
TRANSACTION COSTS CHARGED TO THE BUYER
Registration Tax 3.00 - 7.00%
Land Registry Tax €168 or 2%
Cadastral Tax €168 or 2%
Notary Fee 1.00% - 2.50%
Legal Fees 1% - 2% (+ 20% VAT)
Agent's Commission 2% - 3% (+ 20% VAT)
Registration Tax:
For old properties, registration tax is 3% for those buying their main home, under law 1089/39. The home must be located in your present or future comune of residence (or in the comune where you have or plan to have your main place of business) and it mustn’t be classified as a ‘luxury’ home.
The registration tax for non-residents and those buying second homes is 7%, so if you’re planning to become a resident in Italy, do so 18 months before buying your home. The tax is calculated on the declared value of the property and not on the purchase price.
Registration tax on the purchase of building land is 8%. Registration tax on the purchase of agricultural land is 15%.
Land Registry Tax:
2% or a fixed fee of €168 for new properties. Fixed fee of €168 also applies if the property is their main or only residence.
Cadastral Tax:
1% or a fixed fee of €168 for new properties. Fixed fee of €168 also applies if the property is their main or only residence.
VAT:
Buyers of new properties do not pay the 3% or 7% proportional registration tax, nor land registry tax, not the cadastral tax. Instead they pay a fixed registration tax of €168 (plus similar land registry tax and cadastral tax), plus VAT which ranges from 4% to 20%.
VAT is levied at 4% for first-home resident buyers, at 10% for second-home and non-resident buyers, and at 20% on luxury homes with a rating of A1 in the Property Register. New properties are defined as those dwellings sold within five years of completion of construction or restoration.
Notary Fees:
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 20% VAT). The notary fee is payable when you sign the final contract. There are widely varying estimates and everything is up for negotiation, but €2,000 for a property costing €50,000 up to €3,500 for property costing €500,000 might be typical, including the cost of the fee of the conveyancer (geometra) which is levied depending on work, and can itself vary from €500 to €3,000.
Legal Fees:
A preliminary contract or a compromesso is drawn up by the seller, his attorney, or real estate agent. Hence, the buyer may opt out of paying the legal fees. The buyer is in any case protected by the public notary. The public notary is much more important than generally believed, he is obliged to check carefully all documents and if they are not 100% correct, no contract at all, so the buyer is very protected.
Agent's Fee:
The standard agency fee, regardless of the type of property (commercial, residential, or land sales), is between 4% to 6%, and is usually shared between buyer and seller. The agency fee is payable at the signing of the preliminary contract
AFTER THE PURCHASE
Annual Tax – The ICI (Imposta Comunale sugli Immobili) is an annual council tax calculated on the value of the property. It is payable twice a year in June and December. It can be paid once in December for non residents.
UTILITIES: water, electricity, gas, telephone
CONDOMINIUM EXPENSENS – If you area buyer of a property which is part of a group of properties which share some communal areas you will be required to pay condominium expenses.
RUBBISH tax
FUNDS
You will need to have a bank account in Italy in order to organize the final payment of the price of the property and taxes and to set up the direct debits for council taxes and utilities. We can help you opening your bank account.
