Buying in Italy
Buying a property in Italy is similar to buying in the UK to the extent that there is an Offer and acceptance procedure, which is usually followed by an exchange of contracts: the Preliminary Act ("Compromesso") and the final deed ("Atto/Rogito Notarile") in front of an Italian Notary. The deed is signed, the balance of the money handed over in exchange for the keys. The contract (deed) is subsequently recorded in the Public/Land Registry.
THINGS TO KNOW:
Most Italian properties are freehold, including apartments.
In Italy, since 1989, an Estate Agent (Agente immobiliare) must be registered in the Register of Estate Agents, held at the Chamber of Commerce. Only professional estate agents, who have taken and passed stringent exams on every aspect of property transactions, can become registered. LiguriaHomes director, Matteo Scandolera, is also an Official Property Consultant of the Imperia Court.
Under Italian Law a property has a Legal or Tax value ("Valore Catastale"); this is a value placed on a property by the Government and is generally considerably less than the commercial price of the property (approx from 30 to 50% of the commercial price). It is the figure on which taxes are calculated as reported in the Local Land Registry Office ("Catasto").
Under Italian Law, there is no penalty fee if you decide to pay the entire mortgage amount, before the original end.
The following Guide is valid for all citizens (Italians, EU citizens, not EU citizens)
STEP BY STEP GUIDE
The 3 easy steps to buy your dream home in Italy, resales or “off-plan” purchases:
1. Offer to Purchase ("Offerta")
The first step is formalising the Offer to the vendor, through the estate agent as an intermediary. The offer is then placed in writing (in Italian and in English) and you will normally have to pay a deposit on the property (10,000 - 20,000 EUR). If the offer is accepted, this deposit paid is defined as "Caparra Confirmatoria". This transaction – Caparra Confirmatoria – is legally binding. Should either party wish to withdraw from the sale, the other party can either force the sale or claim damages and ask for the return of the down payment. Should the vendor default, you may get double the fee you have paid.
2. Preliminary Contract ("Compromesso" or "Contratto preliminare")
Once the seller accepts the offer, the parties have a binding contract, which is then formalised with the execution of the Preliminary Act (normally from 1 to 3 months after the Offer), a formal agreement according to which the parties undertake to buy and sell the property and agree on the terms and conditions of the sale. This is the most important step during the process. It will contain the details of the sale including the purchase price; the completion date and all the obligations for the vendor and the buyer. It will also contain a full description of the property with all related information such as cadastral details and any planning permission obtained. On signing the "Compromesso", the buyer pays normally between 10% and 20% as deposit ("Caparra Confirmatoria") on the purchase price. At this stage you have to pay the Commission Fee ("Provvigione") to the estate agent.
3. Final Deed of Sale ("Rogito" or "Atto Notarile")
The transfer of the property takes place with the execution of a deed of sale in front of a Notary. The Notary ("Notaio") is the only professional entitled to transfer legal title to properties in Italy. Although the notary is selected and paid by the buyer, he is an independent public officer/professional charged with the duty of drafting the purchase deed finalizing the sale, ensuring that title passes legally between the parties, verifying the necessary legal documentation and registration in the Local Land Register and at the “Conservatoria dei Registri Immobiliari”. It is a very important stage and it is necessary for you to understand the details of the contract. That is the reason why we suggest to appoint an english spoken Notary, for ensuring that everything is clear and that you understand all the terms and conditions. A bank account is recomended to make the purchase payment at completion.
Once the purchase has been completed in the Notary' office, the foreign buyer will mainly be interested in obtaining a certified copy of the Purchase Deed, as duly lodged with the authorities by the Italian Notary appointed. A copy of the Purchase Deed ("Rogito") is usually available for collection within 2 - 3 months from the date of completion. LiguriaHomes will collect it for you.
Where the property is in a block of flats, to inform the condominium manager ("Amministratore del condominio") of the transfer of the flat to the foreign buyer. LiguriaHomes will do it for you.
Finally, it will be necessary to arrange for new contracts ("Volturazione delle utenze") with the main utilities (power, water, gas, telephone, etc.). Liguria Homes will do it for you.
TAXES & EXTRA COSTS
Taxes on purchase are as follows:
Registration tax/stamp duty ("Imposta di Registro") is paid, in a simplified term, on the governments valuation of the property, the "Valore catastale". If you are buying the property as a holiday home, stamp duty will be 9% of this government valuation. If however you wish to move to Italy and apply for residency ("Prima casa") within 18 months of the closure, then the stamp duty becomes 2% (4% in case of new construction). It is paid at the time of completion, to the Notary.
Three other small taxes (land registration, cadastral and mortgage), in the region of € 50 each are to be paid as a one-off at the time of completion, to the Notary.
The tax to be paid once a property is bought is:
IMU/TASI property tax ("Imposta Muncipale sugli Immobili") is a local council tax of between 0.7% - 1% of the cadastral value of the property. The actual rate is decided by the local authority on an annual basis and is paid in two installments in June and December. The main residence ("Prima Casa") is not subject to any property tax.
A person not resident in Italy has to make an annual declaration to the Italian tax authorities for any income in relation to activities in Italy (an example of this will be the income derived from letting the Italian property). It is possible to off -set certain expenses against that income – repairs, management expenses, local taxes etc. This income also has to be declared in the country of residence with a double taxation agreement mitigating against paying twice.
Just for holiday homes, if the owner sells prior to 5 years incurs a charge of 20% Capital Gain on the gain between the buying price and the selling price.