Buying houses in Italy is simple if you follow these steps and make due allowance for taxes, legal fees the pace of Italian life.
The Property Search
Buying houses in Italy always starts form the same place – the property search.
Though most property searches begin on the internet we recommended, especially for those not familiar with the intricacies of the Italian housing market, that you refer to an estate agent who by law must be accredited and fully licensed by the Chamber of Commerce.
When buying houses in Italy it is very important not to let your heart dominate your head. Pretty much everywhere you look in Italy you will find wonderful properties in which you can imagine yourself cutting a bella figura and living la dolce vita. However, you need to quickly remind yourself of the practicalities of living in Italy and take a sober view of the ongoing costs involved of living in your dream Italian home.
It’s worth remembering that if your property search will be centred on Liguria you may find it cheaper and more convenient to fly into Nizza (Nice) airport (France) and pick up a French hire car at the airport. If you choose this route, we’d suggest that you book your hire car in advance via someone like France Car Hire to avoid delays or finding that the model you wanted was not available.
Buying Houses In Italy: The Legal Formalities
When buying houses in Italy, the legal side falls into two parts, the compromesso, a legally binding preliminary contract, and il rogito, the formal completion of the purchase transaction.
Compromesso di vendita or Preliminary Contract
The purchase of a property through an estate agency normally involves an official offer to purchase called the compromesso di vendita under which the prospective purchaser becomes bound to purchase the property for the offered price within a limited period of time, but subject to any escape clauses within the contract.
When you sign a compromesso di vendita you will be expected to immediately lodge a deposit of between 10 – 30 % of the offered price with the estate agent. In the case of buyers resident outside Italy you will be asked to send the deposit through bank transfer as soon after the vendor’s acceptance has been received by the estate agent.
The deposit is normally held by the estate agency, and will be returned to you if the offer is not be accepted by the vendor or if you exit the contract using an escape clause within the contract. If the offer is accepted by the vendor the deposit forms part of the purchase price.
The purchase deposit will be forfeit if the purchaser unilaterally withdraws from the purchase contract unless the withdrawal is permitted under the terms of the contract.
If the vendor withdraws, double the deposit is paid to the buyer by the vendor will become due to the purchaser as a penalty payment.
The preliminary contract establishes the terms and conditions of the final contract (il Rogito) including the price to be paid, the method of payment, the date for completion, the nature of the property and guarantees from the seller. It may also include any other relevant legal details.
Il Rogito Notarile or Completion
All registered property transactions in Italy must take place in front of a notaio, a notary public who represents the Italian government.
The notaio’s job is to check that the sale documents are correct, to verify the identities of the parties involved, to collect the tax on the sale due to the Italian government and to ensure that the entries in the registry are updated to show the new owner.
The vendor and the purchaser must use the same notaio to execute the deed.
At this point the buyer must pay the property registration fees, plus the remaining balance of the agreed purchase price. Then both vendor and purchaser have to sign the rogito notarile, the definitive contract equivalent to the Deeds of the property.
In addition to the balance for the property, the buyer must also pay the property purchase tax, the amount of which depends on whether:
- The buyer purchases the property as his first residential home in Italy and applies for his/her residency at the property.
- The foreign buyer purchases the property as his second home because he already owns a property in Italy.
- The foreign buyer purchases the property but does not wish to apply for Italian residency.
- The property is deemed to be a luxury house.
- The buyer purchases the property privately or a property company.
- The notary fee.
You should budget for additional purchase costs of between 3% to 12 % of the final purchase price: your estate agent will be able to offer a more exact figure.
Ongoing Costs
Once you have purchased your property you will need to budget for the running costs of your property which will include:
- IMU (Imposta Municipale propria) – This is an annual council tax calculated on the value of the property. It is normally payable in two installments, June and December, but non residents can opt for a single payment in December.
- TARSU (Tassa per lo Smaltimento dei Rifiuti Solidi Urbani) – This is an annual rubbish tax, payable in four installments or all at once if you prefer.
- Utilities – electricity, water, gas, telephone.
- Condominium expenses – if you buy a property which shares some communal areas such as gardens, a driveway, a swimming pool, a tennis court etc. then you will be required to pay a pre determined share expenses: this will have been set out in the purchase document so should come as no surprise.
To help you minimize these costs in your home currency terms you should consider using a foreign exchange broker to reduce your Foreign Exchange costs.