Buying Property in Italy

Some Facts 

There is no substitute for adequate research in property purchases anywhere in the world and Italy is no exception. Invest the necessary time, money and effort and do your own groundwork before you make any decisions. While the internet does provide some good leads there are some excellent published resources like like Buying a Home in Italy, written by David Hampshire and Living and Working in Italy, written by Nick Daws and World of Property, a quarterly publication containing many properties for sale in Italy (and other countries). 

Legal Advice 

Do not attempt to buy property without legal advice. Italian inheritance laws are complex and could create problems for the uninitiated later. One of the main reasons to engage a lawyer (avvocato) is to protect your interests through the inclusion of any necessary conditional clauses in the contract. 

The Real Estate Market in Italy 

Unlike most countries where real estate transcations are largely facilitated by agents, most property sales in Italy are privately conducted by the buyer and seller directly. If you choose to buy privately you would need to know Italian or at least make use of the services of a friend or colleague who can converse in Italian on your behalf. Do not deal with unlicenced agents. 

To find an agent in a particular town or area, look under Agenzie Immobiliari in the local yellow pages or look online www.paginegialle.it. Reputed nation-wide restate chains in Italy are Gabetti (www.gabetti.it ), Grimaldi (www.grimaldi.net )and Tecnocasa (www.tecnocasa.it) while Rome and Milan have property ‘exchanges', where you can buy and sell properties through agents. 

Remember most estate agents in Italy are local and the seller usually is a relative or friend which is why the agent may not have the buyer's best interests at heart. Agents' commissions (provvigione) range between 3 and 8 percent and are usually shared equally by the vendor and buyer. Some agents are also known to levy a fixed commission such as €2,000 on properties costing up to €50,000 and a maximum of €12,000 on properties costing up to €300,000. As a thumb rule the cheaper the property, the higher the fee as a percentage of the sale while the commission payable on expensive properties may be negotiable. 

Costs Likely to be Incurred 

The fees associated with buying a property in Italy are among the highest in Europe and likely to include notary and agent's fees, mortgage fees, legal costs, registration tax, land registry tax and value added tax (VAT). Fees are usually payable on the completion of a sale and amount to anything from 9 to 15% for a non-resident (the average being around 13 per cent). The fees associated with buying luxury property can be as high as 20%. Buyers must check on the amount of fees before signing a preliminary contract. Expats who are resident in Italy can offset these costs against income tax.   

The first step involved in buying property in Italy is usually the signing of a preliminary contract (compromesso di vendita, or contratto preliminare di vendita normally referred to as the promesso), which may be drawn up by the estate agent, vendor, notary or a lawyer. The promesso may be hand-written or a standard printed document and can be found at stationery stores. Once the preliminary contract has been signed both parties are bound to the transaction. The promesso may be registered to prevent the sale of the property to multiple buyers. 

The contents of the promesso are details of the property, vendor and buyer, the purchase price, method of finance, the closing date, and any other conditions that must be fulfilled before completion. You may request for an English translation of the promesso. A sale must be completed within the period stipulated in the promesso, which is usually six to eight weeks (although it can be anything from two weeks to 3-4 months). 

Buyers must procure a fiscal number (codice fiscale) soon after signing the promesso, as this is a mandatory requirement for the completion. 

Take care to understand every aspect of the promesso and get your lawyer to include as many conditional clauses as required to protect your interests. Conditional clauses commonly relate to: planning and building permits, obtaining mortgage, pre-emption rights, obtaining a satisfactory survey and so on.  

In some other transactions, the first stage in buying a home could be signing of a ‘purchase proposal' (promessa d'acquisto or prenotazione or promesso di vendita), usually drawn up by the estate agent and presented to the seller on behalf of the buyer. This document includes little information other than the seller's offer and is binding only on the seller. The buyer is free to accept or reject the offer, usually within a time limit of up to 15 days. If the purchase proposal is accepted by the buyer, both parties sign a preliminary contract and if the proposal is rejected the deposit is returned to the buyer.

Purchase proposals however are rare and, if an agent insists that the buyer signs a purchase proposal and pay a deposit before signing a preliminary contract the buyer must ensure the money is deposited in a safe (escrow) account. 

Mortgages

Expats must ideally have their finances in place before beginning the property search. Those in need of a mortgage must obtain a mortgage guarantee certificate from a bank that guarantees you a mortgage at a certain rate, which is usually subject to a valuation.

Italian law allows buyers who are unable to obtain a mortgage to withdraw from a contract and have their deposit returned.