All foreigners can buy in Italy with no restrictions.
Generally, there are three steps involved in buying a property: proposal of purchase, preliminary purchase (called COMPROMESSO) and final purchase (called ROGITO).
Buying a house in Italy is no more complicated than buying a house anywhere else but it can be important to choose a good legal advisor. If you don’t know one, you can ask your agent to advice someone they trust. The legal advisor must, ii necessary, ensure that the property you buy has good title deeds and appropriate planning consent, and is free of debt, charges and other burdens, although usually the real estate agents checks all of this advance. Normally the notary, who is chosen by the buyer, is also a perfect legal advisor.
Fees Associated With Buying In Italy
Please note that this is a guide only and the exact fees associated with buying your property, will be outlined to you before you start the sales process.
– In Italy both the buyer and seller pay the Italian Estate Agent Fees, usually between 2 and 3% of the purchase price + VAT.
– There are several registration taxes that are combined with the Stamp duty. This is 10% and is calculated on the taxable value of the property and not the purchase price (this can vary between 30% to 50% less than the purchase price). The purchase tax is 3% if the buyer purchases the property as a first home and applies for residency in the area and the vendor is a private person. 4% VAT is applied instead in case the vendor is a company.
– The basic notary fees are fixed by law and are charged according to the price of the property – they range from 1- 2%.
Land Registration tax is the main tax on real property. This is levied at 10% of the declared value for ‘urban’ property, and 17% of the declared value for ‘rural’ property. Most houses, including those in remote rural areas, are considered ‘urban’, while the term ‘rural property’ refers to plots of land or farming land. In some cases, the property being sold is owned by a company, in which case VAT at a rate of up to 20% is payable on the declared value instead of the Registration tax.
The declared value is based on the official rateable value of the property, which depends on the local commune, the category and location of house and the size. The amount payable depends on many factors including whether the property is your first and only home or a second home, whether it’s a new home and whether you are a resident.
– New Property. Value added tax (VAT) is levied at 10% for new (non-luxury) properties and at 20% for luxury properties with a A1 rating in the property registry, and is included in the price charged by the builder or developer. If you build your own home you pay a reduced rate of VAT at 4%.
The person buying the house may attend in person before the notary, but, if this is inconvenient, arrangements can be made for a Power of Attorney (called PROCURA) to be granted enabling another person to attend on their behalf. This must be in the Italian form and signed in front of a notary or an ambassador. Your lawyer may appoint an associate in the area to sign on their behalf. However you can have a ower for signature drafted in your home country.
In order to buy property in Italy, you need to be registered with the Italian tax authorities and to have a tax identification number. The occurring money will have to be transferred before the final deed in any Bank that has an headquarter or representation in Italy, where a Bank account will have to be opened.
Types of Contracts
Preliminary Deposit – A preliminary deposit is usually 10% of the purchasing price. With this you reserve the right to buy the property for a fixed period of time. In the meanwhile, the agent will submit your offer to the Vendor. If he accepts you fix the date of the Compromesso. If the offer is not accepted, you will receive your money back. But if after the Vendor has accepted your offer, you change your mind, then you will loose the deposit.
Preliminary Contract (compromesso) – This contract requires you to pay between 10% and 30% of the property price and commits you fully to purchasing the property, unless the seller has a problem with proceeding.
Final Deed (rogito) – This contract is the final act that takes place in front of the Notary once the full amount of money is transferred to the vendor’s Bank account.