Generally speaking there are no restrictions placed upon a non-resident wishing to purchase a property in Italy.
When buying a house in Italy it is strongly recommended that you use professionals who are familiar with the local market and that you seek suitable legal and tax advice. Realitalia works with accredited and licensed local professionals and – upon request – can recommend expert advisers in Italy.
Step 1 – The Irrevocable Purchase Offer
The buying process starts when you have identified the property that most suits your requirements, your new home.
At this stage you are invited to sign an irrevocable purchase offer (Proposta irrevocabile d'acquisto) that will formalize your intention to purchase the property. This document, despite normally being quite simple, it would contain a floor plan of the property you wish to purchase.
Normally your Proposta would be followed by the payment of a deposit, that will be returned if not accepted. This could be EUR 10,000 for example.
If you change your mind you will forfeit the deposit, as the owner will have effectively taken the property off the market and put it “under offer”. If the owner/seller will not accept your Proposta within the deadline set in your offer, then your deposit will be returned to you (no interest on these sums is usually due).
Step 2 – The Preliminary Agreement (Compromesso)
The preliminary agreement (Compromesso) commits both parties to the sale. This contract establishes the terms and conditions of the sale contract (Rogito) and details price, date for completion, the nature of the property and guarantees from the seller. It may also include any other relevant legal and practical detail (standard schedule of works and modifications agreed by the parties, floor plans, details of parking space or garage if any etc..).
At the signature of the Compromesso you will be expected to pay a percentage of the price which could be 1/3 , other stage payments can be requested by the seller for off-plan properties when the delivery is far in time. It is important to note that the Compromesso is a binding agreement so – if you withdraw from the sale after signing it – you normally would lose the payments made.
Recently, with the introduction of the no 122/2005 , buyers purchasing off-plan have more protection on their payments done before Completion (see question no 4 of our FAQ).
Step 3 – Completion (Rogito)
This is the final stage of the process and transfers ownership of the property, you will become owner of your home in Italy (usually 1-3 months after the Compromesso, when the property is purchase off-plan this period could be considerably longer).
The document is drawn up by the Notary (Notaio), who is a public official that guarantees the legality of he ownership transferred (see question no 1 of our FAQ). Normally the buyer and seller are present for the signing of the contract at the Notary's office, nevertheless you can appoint an individual who will act as your Attorney in your absence (by mean of a Power of Attorney, please see next paragraph).
Before (or at) the Rogito you will be expected to finalize all payments to the vendor and to settle all sums due to the Notary. The best way would probably be to have funds transferred to your Italian bank account well before the Rogito. We can help you with the opening of your Italian bank account if you wish so, it will be useful also later for paying local charges, utilities, service charge and costs (please see below for more details).
The Notary will read out loud the contract of sale to those present, therefore if you are attending without anyone who can translate for you, it would be wise to use an interpreter, and then the deed is signed before the Notary.
The notary will then take responsibility of registering the completion with the land registry. Normally – upon request – he would produce a copy of the deed for your convenience.
If you can't be present at the Rogito – Special Power of Attorney
The Notary himself or a solicitor (that we can recommend) would draw up the power of attorney by which you appoint a person who will sign in front of the Notary on your behalf; this draft document can be e-mailed to you .
In this case you print it off and sign it in the presence of a public Notary, in England for example. He or she would normally also take care of the "Apostille" that is needed to be valid for the Italian Notary. The original complete document shall be sent back to Italy, preferably directly to the Notary's office.
The formalities associated with the granting of a power of attorney produce a cost due by the assistance of the Italian Notary and of the public Notary who authenticates your signature and takes care of the Apostille. As a guideline only you can expect it to be under Euro 1,000.
Other expensed associated with your purchase
As well as paying the balance for the property, there are other costs associated with you purchase (please see our FAQ for more detailed information):
VAT– which – on most properties – would be at the reduced rate of 10% (since you are directly buying from the developer) or 4% if you are planning to become resident in the property and it is your first residential home in Italy; this may not be possible in certain properties depending on their planning destination.
Notary fee + applicable costs and VAT (see question no 7 of our FAQ) – payable at the Rogito. This would normally represent between 0.50 to 1,5% of the price of the property (lower the value of the property higher the impact of Notary fees and associated costs).
If you have applied for a mortgage you will have to pay the mortgage tax which is equal to 2% of the sum mortgaged or 0,25% if you become resident in the property (and it is your first residential home in Italy). Please note that in the event of a mortgage – since the Notary will produce an additional contract – he or she will charge an extra fee and costs.
In most of cases when you buy off-plan or newly refurbished properties you would have to pay for utilities connection and land registry formalities. As a general guideline only it could add up to around Euro 2,000. In some cases you may also have to participate to the on-site management set up fund, usually when the project features common facilities; the sum requested would vary from case to case.
The running costs you should expect on your property in Italy
Running costs of your property will include (please see our FAQ for more detailed information):
• Annual Local Tax– The Imposta Comunale sugli Immobili (ICI) is an annual council tax calculated on the value of the property. Determined on the basis of the property’s cadastral value;
• Environmental Hygiene Duty (or rubbish tax); it is a tax due to local authority (Commune);
• Utilities – electricity, water, telephone (if required);
• Service charge – the annual cost in connection with shares areas and facilities.
The easiest way to pay most of these is by direct debit through your Italian bank account .
As mentioned above we can help you with the opening of your Italian bank account. It is normally a straight forward procedure that initially does not require your presence. You can provide Realitalia with a good copy of your passport, your address, and a letter letter in which you explain that you want to open a bank account and in which you authorize Realitalia to pass your details onto the bank. You will then need to pop into the bank at the first occasion so that they can collect your signature and check your ID.
You will also need a Tax Code in order to complete your purchase (Codice Fiscale) . You can applly for it yourself direct to the competent office at the Italian Tax Autority or we can arrange this on your behalf at the Notary office. In this event it would have a cost in the region of Euro 200; we would need a good copy of your passport (or other valid identification) and a signed “instruction to collet your Codice Fiscale” which the Notary office will then provide.
Applying for an Italian Mortgage
Realitalia can help you to do this too, putting you in contact with a Bank to whom you can apply for your mortgage.
Terms and conditions vary from bank to bank, nevertheless as a guideline amounts borrowed would probably go to a maximum of 70/75% of valuation or purchase price (whichever is the lowest).
Subject to banks' guidelines and approval, you are likely to be asked to provide the following documents:
Photocopy of your passport clearly showing your personal details
Photocopy of the Italian Codice Fiscale
Copy of your marriage certificate/decree of separation or divorce (only if appropriate) Last two consecutive months’ salary slips or Last 2 consecutive years’ audited balance sheet and trading accounts (if you are self-employed)
Confirmation of income and employment signed by your employer or Letter from your accountant confirming personal income and dividends received (if you are self employed)Last Income Tax Return (P60 in UK) or Most recent personal tax assessment (Inland Revenue Tax Return in UK) (if you are self employed)
Last three consecutive months’ bank statements from your main bank account or Last six consecutive months’ bank statements from your main bank account and Last six consecutive months’ bank statements from your company bank account (if you are self employed)
Policies and requirements can change from bank to bank, but generally speaking these are likely to be the documents that the bank would ask you to process your application.
*The above information is complimentary and for guidance only. Realitalia recommends that you seek appropriate legal and tax advise on your purchase in Italy.