Buying property in Italy
Do you fancy enjoying Italian cuisine every day? Do you love art and ancient history? Then Italy with all its well-preserved cities is the place to be. Not only does its capital Rome, home to the Vatican, stand out when it comes to architecture and art, but also the thriving Italian cities of Florence, Venice and Milan. Its long coastline with islands like Sardegna and the Amalfi Coast are beautiful destinations for lovers of the Mediterranean sea. The up-and-coming Italian property market is definitely worth an investment. The following guideline will give you some recommendations on how to invest in real estate in Italy.
Buying property in Italy as a foreigner
Buyers from the European Union including UK can buy property and live freely in Italy. Non-European buyers are able to buy property in Italy, but the length of their stay per year as well as the possibility of employment may be restricted. Foreign investors need an Italian tax code number (codice fiscale).
What do real estate agents do in Italy
The real estate business in Italy is characterised by a strong code of practice for real estate agents, sellers and buyers. Italian real estate agent’s professionalism is secured by law; all of them have to pass an examination and register with the local chamber of commerce. Their main responsibility is to match buyer and seller. It is not the responsibility of the real estate agent to carry out any due diligence of the property. Agents are only obliged to inform buyers of any deficiencies that they know about; the buyer should involve their own surveyor and experts to check title, construction defects etc.
How to buy property in Italy
Usually the first step in the purchase process in Italy is a formal written offer, proposta d’acquisto. As a security of an offer sometimes a bank cheque is required, which the real estate agent may hold as an escrow. It is important to note that in accordance with Italian law an accepted offer becomes a fully legally binding contract.
When buyer and seller reach an agreement upon the terms of a sale, contracts are then exchanged. This is called compromesso in Italy. This fully binds all parties and normally 10% of the purchase price is handed over as deposit. At this point the title is not transferred yet. While the seller gathers all relevant documents of the property, the buyer prepares funds for purchasing. If the seller is not holding up to given warranties under the compromesso, the buyer can exit the deal having the right of receiving the whole deposit back or even more as a penalty. If the buyer decides to withdraw from the deal, for whatever reason, the deposit payment remains with the seller.
The last step of the purchase process is the transfer of title of the property. Therefore, the notary prepares the final contract which is signed by all parties. The notary in Italy is independent and does not represent any of the parties. After the Rogito Notarile, the notary records the transfer of title of the property in the title office.
Property Taxes in Italy
Imposta Municipale Unica is a property tax based on the land registry value of the property and is collected by the local authorities twice a year. Property owners who live in Italy are subject to income tax on the theoretical rental income of the property during the year. Non-residents only have to pay this tax if the income exceeds a certain amount. As these figures may vary depending on regional regulations, it is highly advisable to check with your local tax expert.
How to get a mortgage in Italy
Foreigners may obtain an Italian mortgage loan. Usually a 20-30% deposit has to be provided. Furthermore, proof of income & identity has to be provided by a solicitor for an Italian mortgage. Please check with your local financial institutions for detailed information.
Property prices in Italy & additional tips
Since the Italian law is very complex, it is highly advisable to involve a solicitor to support you. Additionally, Italy has very strict regulations when it comes to planning rules. Thus, for any renovation plans of a purchased property, bear in mind that a building permit can take up to a year and the early involvement of a professional is required.