|How to buy a home in Italy|
The buying process step by step
Buying a home in Italy is a simple and safe procedure, governed by laws to protect both parties. There are three stages to the process:
1. Making an acceptable offer
2. A formal agreement, known as the Compromesso
3. The final legal transfer, known as the Rogito or Atto Notarile
Buying through an agent
Although it is possible to buy a home without using an agent, if you are a foreign buyer you are likely to find that an English-speaking agent will offer invaluable support and advice in return for his fee. Agents in Italy usually represent both buyer and seller, each charging about 3%, though the fee is negotiable.
(Offerta or Impegnativa d'acquisto)
As soon as the price, the land boundaries and details of the property have been established, as well as the terms of payment, you will be asked to pay a security deposit, usually between 5.000,00 and 10.000,00 € in the event of breach of contract, to be paid by means of cheque or bank money transfer as a free trust deposit in the hands of the representative of the agency. This amount will be given back free of any penalty or indemnity, in the case of the seller not accepting the offer. Should the seller accept this offer, the amount will become a binding deposit, called the “caparra confirmatoria”. In the offer the seller has to give some guarantees to the purchaser regarding the availability of the property, confirming that it is in order with the building regulations in force and that all taxes have been paid.
The details of the contracting parties, the details and price of the property, the methods of payment, the dates for signing the final contract and any other clauses that might be relevant will be fixed in this legally binding, private contract between the two parties.
In this contract the full price being paid for the property is stated. We recommend that this be done with the assistance of an expert (Public notary, lawyer or real estate consultant) who will perform a title search and ensure that there are no loans, liens, or other impediments such as rights of way on the property, that the property is the exact one that is for sale and that all permits and permissions for the building are in order.
Once the agreed deposit has been paid (the deposit amount can vary between 10% and 30% of the sale price depending on the value of the property and the amount of money the Vendor aims to sell the property for) and the Compromesso has been signed, both parties are legally bound to complete.
You might want to hire a “geometra” to collect all relevant documents. He will visit the Comune (local council) registry offices and the regional land registry offices (catasto) to obtain the necessary documents required prior to the sale. After signing the Preliminary Contract you should obtain the necessary documents for the signing of the Final Deed:
The Italian tax code can be prepared either at the Italian Consulate in the Purchaser's country of residence or, alternatively, while the Purchaser is still in Italy.
Bank account: It is necessary for the Purchaser to open an external Euro bank account while in Italy.
(Rogito or Atto notarile)
After the signing of this contract there is a period of approx. 3 weeks before the new owner receives this document. This document is equal to a Title Deed and is the document of ownership of the property. Vendor and the Purchaser (or their nominated representatives) must be present at the signing of the Final Deed. This final contract has to be made in front of the Public Notary. This is the contract which is registered in the Agenzia del Territorio Servizio di Pubblicità Immobiliare. All government taxes and fees are calculated on the declared value as stated in this contract. The Notary is bound by law to read aloud the contract to the interested parties. Prior to the actual signing, the balance of the purchase price is handed over to the Vendor. The Deed is signed by the Vendor and by the Purchaser and is then countersigned by the Notary. At this stage the taxes (imposta di registro or IVA, ipotecaria, catastale) are paid there and then in the Notary’s Office. (N.B.: IVA in Italian = VAT in English) For the property: 10% of the declared price (7% imposta di registro, 2% ipotecaria, 1% catastale)
If you will be living permanently in the purchased property within 18months from the date of purchase, you can declare this when signing the final deed, which will reduce the taxes on the property from 7% to 3% (imposta di registro) or from 10% to 4% (IVA) plus a fixed tax of about 336,00 € (imposta ipotecaria, imposta catastale) or 504,00 € (IVA).
Power of Attorney: it is necessary to rely on an officially accredited translator, unless the Purchaser speaks sufficient Italian to guarantee to the Notary that he or she understands the contents of the Final Deed. Alternatively, most Purchasers give a special power of attorney (Procura speciale all'acquisto) to their Agent. This document can either be prepared or signed in front of the Notary while the Purchaser is still in Italy or, alternatively, at the Italian Consulate in the Purchaser's country of residence.
At the time of the signing of the Final Deed the following fees are to be paid: The Notary's fee. based on the declared total value of the property.
The Notary's fee has to be paid in the Notary’s Office when signing the Final Deed.
The Geometra's fee: depending on the work done.
Agent's commission: 2 or 3% of the purchase price +VAT.
Translators fee: professional tariffs applicable.
Estimated costs at the time of transfer of deed: Property Taxes: see above Land Taxes: 18% of declared value Fees for which the Buyer is responsible: Geometra: depending on the work done Notary: professional tariffs applicable Agents Commission: see above Translator: professional tariffs applicable Accountant: professional tariffs applicable
AFTER THE PURCHASE
Local Council Taxes
Italy has low taxes compared to most countries. Home insurance is not mandatory. In Italy it is the property owner’s responsibility to contact an accountant to determine the yearly tax bill. I.C.I. (Imposta Comunale Immobili) is a yearly property tax, which is between 0.4% and 0.7% approx. on the declared price of the property (paid in two instalments during a year).
There is a local waste collection tax (Rifiuti Solidi Urbani).
Capital Gains Tax
If you sell your property before five years of ownership, you will have to declare the profit you made, if any, in your tax return, unless the owner used the property as “a main residence” for a period longer than half of the time that has passed between the purchase and the sale of the property.
Tax Code (Codice fiscale): This document can be prepared either at the Italian Consulate in the Purchaser's country of residence or, alternatively, while the Purchaser is still in Italy.
The Purchaser must open an external Euro bank account, while in Italy.
General guideline/hypothesis regarding electricity costs, at 4,5 kWh Annual fee: 74,16 €
Price of consumption:
o First 1500 kWh ---> cents/kWh ---> 7,48
o 1501-2100kWh ---> cents/kWh ---> 22,97
o 2101-3000kWh ---> cents/kWh ---> 12,64
o >3001 kWh ---> cents/kWh ---> 9,12
Telecom is the main telephone service provider in Italy. Obviously there is an array of other providers from which you can choose the most convenient solution for you.
The prices depend on the relative Comune and are estimated between 40 and 70 Euro cents per cubic meter. Another option is to consider drilling a well if your property has water reserves.
The prices depend on the relative Comune. If your home is connected to the main gas line, the estimated cost would range from 50 Euro cents and 1.40 Euro cents per cubic meter. If your home is in the countryside you will need to have a gas tank installed into the ground. Prices vary with distributors.
Unless you have a mortgage on your home, insurance is not mandatory in Italy.