buy home in Italy

Some Tips on Buying Process in Italy

Italian Real Estate Market is an interesting market as Italians are historically used to invest in real estate, so that is a very stable market.

Interesting burgains are possible both in city-centre of main Italian towns and countryside.

Investments in City-centre of main towns is guaranteed through time thanks to a no-drop price.

In the countryside you can buy old stile/stone style apartments or country-houses with low budget and restore with modern and technic and design. Once reselling your restored real estate you will be able to optimize the new value created.

Pre-Activity

Selection of Apartment

If you are interested in looking for a property in Italy Step 1 is determining  the priority  characteristics you wish for the piece you are looking for; Step 2  is taking contact with the realtors who list properties you like. We can assist you since step 1, by introducing you to a selected and specialized number of realtors or real estate consultant, independent experts who  co-operate with the legal firm in order to give pro-client advising, 100% your side person, who can look after the research of a property matching your priorities and assist you for visiting the places. “Open Houses” for viewing are not a common in Italy. For visiting a home, you’ll need to make an appointment with the seller or a real estate agent.

Once you find the place you like it is important to start a legal and technical check. The legal Advisor can help you working together with a notary and a technician to  make all relevant chekching.

Codice Fiscale.

If you wish to close any transaction within Italian Territory you need to get a Codice Fiscale which will be reported on the new property title. This is an identification code or tax code to identify each individual (similar to a social security number in the U.S.).

Apartment file

  • Title documents
  • Energy certification
  • Floor plans and land maps / Technical survey / Public Records Consultation

The notary will check all the documents. Among them it is highly recommended, though not mandatory, a technical survey about the state of house. A survey can be provided by any registered surveyor, architect or engineer to cerify  the state of a property you are interested in. We can select for you the right fiduciary technician and work it him to all relevant checking required.

PROPOSAL SIGNING AND DOWNPAYMENTS

Once you have selected the apartment you are ready to place a bid, making an offer and signing a proposal. Realtors will make you sign a form including main terms of the offer, such as price, timing and steps of the title transfer. The proposal is guaranteed by a deposit of a sum with specific effects, Caparra, usually by a check of 0,5%-1% of the price offered, easy to receive back in case of no acceptance of the offer. Such deposit as binding effects for the buyer. The vendor has a time to accept and sign the offer. After such acceptance of the deposit/caparra has following effects:

  • CAPARRA CONFIRMATORIA
    – In case of default in completing the process on the agreed terms, the purchaser will automatically lose the whole of the deposit paid.
    – In case the selling is not completed because of the Vendor, he will be under a binding legal duty to pay to the buyer twice over, the sum originally received as a deposit.
    – In some cases it might be possible that in addition to Caparra further sums may be payable, if it is proved that the damages actually exceed the amount of the deposit;
  • CAPARRA PENITENZIALE
    – Subject to the actual wording of the contract, it will enable either or both parties to the contract to withdraw from the transaction.
    – By allowing the vendor to keep the deposit paid, in the case of the buyer withdrawing.
    – Or compelling the vendor to return the deposit received, where the vendor wishes to terminate the contract.

Preliminary Contract

Once you decide to move forward to buying a house, you can decide to postpone the final closing meanwhile pay a deposit of about 10% to “hold” the house.

The Preliminary Contract, a contract with obligation effects which determines all terms of the future final act, may be in need for example if you may need to search for a mortgage loan or in case the seller needs time to look for a new property to move in.

The preliminary agreement must be registered at the Agenzia delle Entrate (Italian Revenue Agency) to have effects as a contract against third parties. If the preliminary agreement is not registered, has effect only amongst the parties.

The terms of the sale will be stated in the preliminary agreement and will have to be respected. The preliminary agreement must be registered at the Agenzia delle Entrate (Italian Revenue Agency) to be an official contract. If the preliminary agreement is not registered, it’s value is reduced to a mere agreement amongst two people.

When the buyer and the vendor will both have signed the preliminary agreement, the buyer must send a deposit of the 10% of the final purchase price. The deposit can be sent directly to the owner of the house or to the real estate agency that is handling the sale.

Deed of Sale and Final Signing

In Italy, notaries handle the sale of property (the closing) instead of attorneys as in the U.S., the buyer choses the notary and pays the notary’s fees.

On the closing date the parties will meet the notary at his/her office to go over the contract and finalize the sale. In such circumstance the payment must be completed and keys will be given. The passage of the keys means gives possession of the real estate property.

Your attorney will look after the draft of contract, making sure it follows your interests and, if need can sign on your behalf with power of attorney, in case you have signed at any point of the process a specific act. Such power of attorney can be useful to avoid an official swore translation of the deed, which would add costs.

Taxes, Accessories Expensies And Mortgage Loan

TAXES AND ACCESSORIES EXPENSIES

You should expect to pay for Notary fee, purchase taxes, registration taxes and realtor/agency fee.

Transfer taxes include:

Registration Tax (9% or 2% if “first home”) of the cadastral value- rendita catastale – if this is your second home in Italy, or if you are non-resident; cadastral fixed tax ; mortgage fixed tax.

MORTGAGE LOAN

You can ask a mortgage loan in Italy as resident and as foreign non-resident. We can look after that by selecting banks at best for value or specific intermediaries for non-resident loans.

Visa, Temporary and Permanent Residency

If you plan to use your Italian house as a seasonal home and you’re not an EU citizen, you need to know that limits on the amount of time you can spend in Italy without a visa is 90 days within a 180-day period.

NEW FLAT TAX FOR RETIRED MOVING TO SOUTHERN ITALY

The Italian Stability Law for 2019 finally approved on 30 December 2018 has introduced a new article (art. 24-ter) in the Income Tax Act (ITA). It includes a substitute tax of 7%, in lieu of ordinary taxation, on all non-Italian-sourced income earned by foreign retired transferring their tax residence in the southern regions of Italy. The special regime is optional and available for the fiscal year in which the transfer of residence occurs and for the following 5 years.