How to buy a property in Italy

Once you have selected an Italian property and agreed a price you will need to select a notary or "Notaio", they represent neither buyer nor seller, but the Italian Government. Although the notaio is strictly impartial, the buyer can insist on choosing the notary, as he usually pays his fee. Notariesí fees vary, so you should check them in advance. As a notary wonít necessarily protect or act in your interests, you may wish to employ a lawyer to ensure that everything is carried out to your satisfaction.

There are two main stages when a notary usually becomes involved in a Italian property purchase. The first is the signing of the preliminary contract "compromesso", when the presence of a notary isnít mandatory, and the second is completion, i.e. the signing of the deed of sale ( rogito), which must be done in the presence of a notary. The notary is responsible for ensuring that the deed of sale is drawn up correctly and that the purchase price is paid to the vendor. He also witnesses the signing of the deed, arranges for its registration (in the name of the new owner) at the land registry, the "catasto" and collects any fees and taxes due. The notary doesnít verify or guarantee the accuracy of statements made in a contract or protect you against fraud.

Once the notaio has been selected you sign a Compromesso or Contratto Preliminare (preliminary private contract) and pay the statutory deposit (minimum 10% and normally a maximum 30%). This agreement between the buyer and seller states the price, the date for completion, what Italian property is being bought and sold, and also includes various guarantees from the vendor that he owns what he is selling and that the Italy property can be sold to you as described.

For Instance, iIf he declares that there are no rights of way through the property then he must be able to sell the property without any rights of way; if he cannot then confirm this, then he is in breach of the agreement and, if you are unwilling to accept the right of way, he must reimburse you with double your deposit. However, for this penalty to be applicable it is essential that the deposit is described as 'caparra confirmatoria'.

Italian property Law 296/2006 (Finanziaria 2007)- Property legal modifications 1/1/2007

A number of specific changes were made to roperty law in January 2007, these were;

  • The buyer and seller must legally register the Preliminary Contract or 'compromesso' at the Agenzie delle Entrate (tax office) within twenty days of the date of signing. The Italian estate agency is also responsible for registration and the payment of fees and tax.
  • A fixed, non-refundable, registration fee of Ä168 is payable together with a variable amount equal to 0.50% of the deposit (caparra confirmatoria) or 3% of any other type of deposit paid before the completion (Atto notarile). The 3% also applies to any interim payments made between the preliminary contract and the completion - such as stage payments to a building company. However, the variable fee paid at this stage is deducted from the final tax bill at the completion.
  • F23 is the official form (modulo) to be used for this part of the registration and is stamped by the bank is to confirm payment and taken to the Agenzia delle Entrate together with the original compromesso. An official stamp (bollo) with a value of Euro 14.62 (bought at a tabbacchi), must be applied to each four sides of the contract. The bollo must be applied if the contract is less than four sides and an additional bollo if the lines exceed one hundred even if there are fewer than four sides. Each attachment must also carry a bollo. The receipt from the Agenzie delle Entrate must be presented to the notary.
  • The the 0.5% advanced tax payment may start to reduce the size of deposits that buyers are paying on Italian properties. However, the Italian property system means that the purchaser does not go into the contract stage lightly, nor does the vendor. If the purchaser reneges on the deal, the deposit is forfeit and, as shown above, if the vendor cannot meet the terms of the compromesso - or simply withdraws - then double the deposit must be reimbursed to the purchaser. If you are using an agent then estate agency fees are also usually payable when the compromesso is signed.

Notary checks

The notary should check the following aspects of the sale between Compromesso and Rogito stages. Satisfying these items, and any others you feel appropriate, should be included as conditions of the sale included within the Compromesso document. Donít expect a notary to speak English (few do) or any language other than Italian, or to explain the intricacies of Italian property law. A notary will rarely point out possible pitfalls in a contract, proffer advice or volunteer any information.

  • Verifying that a property belongs to the vendor, as shown in the deed ( rogito) and listed at the land registry ( catasto) or that he has the legal authority to sell it. The owner should produce a certified copy of the deed. The descriptions of the property at the land registry and on the deed should be identical.
  • Obtaining a certificate that an old property is fit for habitation (certificato di abitabilitŗ);
  • Obtain certificates of inspection for all electrical and gas systems and appliances, which must be inspected annually. These must be attached to the deed of sale ( rogito).
  • If youíre buying a listed building ( beni culturali), of which there are thousands in Italy, the notary should check whether the state wishes to exercise its right to pre-empt the sale ( diritto di prelazione). He should apply for the right to proceed with a sale after the signing of the preliminary contract and the state has 60 days in which to pre-empt it. If so, the contract becomes void and the seller is obliged to return your deposit. The notary should also check whether there are any restrictions over the use and possible future sale of the property and establish if any illegal restoration work has been carried out or any alterations have been made to a listed building , if they have then it can be confiscated by the state.. You should ask your lawyer to check that both these things have been done.

Legal Conditions of Sale

You must include the following into the compromesso as conditions of sale that must be satifisfied for the contract to be legally binding. You or your lawyer must investigate the following before completing the sale:
  • Check that there are no pre-emption rights over a property and that there are no plans to construct anything (e.g. roads, railway lines, airports, shops, factories) that would adversely affect the value, enjoyment or use of the property.
  • Check whether thereís a zoning policy (piano regolatore) in the town or area that may affect a property youíre planning to buy.
  • Check whether the property is subject to a compulsory purchase order. If you buy a rural property ( casa rurale), it could be subject to compulsory purchase by a neighbouring farmer under a farmerís rights ( diritto del coltivatore) law. This law allows farmers who earn over 70 per cent of their income from agriculture or agro-tourism to increase the size of their property by giving them the right to buy adjacent buildings or land for up to two years after it has been sold. To avoid this, you can have your lawyer draw up a document asking the farmer to confirm within 30 days whether he intends to exercise his right of purchase. If the farmer doesnít declare his intention to buy the land within this period, he automatically waives any right to buy it in future.
  • Check rights of way ( servitý di passaggio). Land may have a mandatory right of way ( servitý di necessitŗ) for a neighbour whose only access is via your land; this may be permanent or renewable.
  • Ensure that building permits and planning permissions are in order and that a property was built in accordance with plans and permits. Any modifications, renovations, extensions or additions (such as a swimming pool) must be included on the plans and be authorised. Plans must be checked against the cadastral plan at the land registry.
    In cases where a property has been inherited, check whether each inheritor has agreed to the sale. Heirs who havenít been contacted have up to five years to contest the will.
  • If a property was previously owned by a bankrupt company, ensure that the liquidator wonít reverse the sale and claim it for the creditors;
  • Check that there are no encumbrances, e.g. mortgages or loans, against a property or outstanding debts. All unpaid debts on a property in Italy are inherited by the buyer. If you buy a property on which thereís an outstanding loan or taxes, the lender or local authority has first claim on the property and has the right to take possession and sell it to repay the debt. Any debts against a property must therefore be cleared before you sign the deed of sale ( rogito). Enquire at the town hall whether there are any unpaid taxes such as property tax or other charges outstanding against a property.
  • Check that there are no outstanding community (condominio) charges for the last five years (it may be possible for a vendor to pay the last year and ignore previous bills) and obtain copies of the co-ownership rules and the latest accounts of the community of owners (which should state whether there are any impending levies for repairs for which you would be liable);
  • Check that all bills for electricity, water, telephone and gas have been paid for the last few years. Receipts should be provided by the vendor for all taxes and services.
  • Before buying land, obtain a certificate from the local town hall stating what can be built on it and what the property and the land can be used for. Itís important to check the size of dwelling that can be built on a plot or how far an existing building can be extended.
  • If the property is a listed building, check that the notary has made the necessary enquiries concerning state pre-emption rights and restrictions on use or resale.
  • Obtaining planning permissions for a pool.
  • Obtaining a mortgage.

 

Quick links for our Le Marche Italy property

 


Il rogito - The completion of sale of property in Italy

Completion takes place before a Public Notary (Il Notaio) and his (or her) involvement is indispensible. Basically a government official, the Notaio witnesses the transfer of title from one party to another and collects the taxes due on the transaction. Contrary to popular belief the Notaio does not act for both parties; he acts for neither party, being - as stated - a witness. With all parties present he will identify them, one by one, and then read through the completion document (Il Rogito) in detail making sure that everyone understands what is being bought and sold. He will need proof that taxes and dues have been paid and he has to have 'visure ipotecarie' to prove what, if any, mortgages or debts burden the property.

With all in agreement he will ask each party to sign and the Notaio will sign and stamp the document. It is at completion that you, as the buyer, must pay the remaining balance of the price of the property, plus the taxes (reduced by the amount advanced at the time of registering the preliminary contract) and notaio fees. The vendor must also pay his taxes if there are any due. If the parties have used the services of an Italian agent they will be asked to declare in the atto the name of the agent, fiscal code, registration number at the Chamber of Commerce, the amount of the invoice and the manner in which payment was effected. Where the notary finds that the sale has been transacted by an irregular Italian estate agent (one who is not registered at the chamber of commerce as 'agente di affari in mediazione') he must inform the authorities.

Once the transaction has been completed the Notaio will register the new title within twenty-one days. If you have taken a mortgage he will also register the mortgage deed. It may be some weeks, therefore, before you actually receive your copy of the registered title deed.

Italy property - Taxes and Fees

Italian property- Agent negotiation fee

If you buy via an Italian immobiliare, then a fee (usually between 2.5% and 3% of the purchase price) is agreed at the outset between the Italian estate agency and purchaser, and is paid on the successful completion of purchase of an Italian property. If you are dealing direct with the vendor of the Italian property, then this fee is obviously not payable.

Italy Property purchase tax

On new Italian properties Value Added Tax (VAT) is payable at 9% for non-luxury property and 19% for luxury property. If the property is not new, then a property purchase tax is paid instead. Purchase tax is levied at 10% for non-residents and at 3% for residents, and gets paid to the Italian Government. If you are able to qualify then you should try to obtain Italian residency.

Italy property Stamp duti (bolli)

Stamp duty (bolli) is levied at 1% for both non-residents and residents, and gets paid to the Italian Government.

Italian property Notio's fees

The notaio's fees usually amount to approximately 2.5% of the Declared Land Value of the Italian property.

Italian property survey fees

The Geometra's fees vary depending on what work is involved in the conveyance and is usually of the order of €250.

Italian property Tax on Capital gains

Whilst there is no Capital Gains Tax after five years of ownership a vendor is liable to pay CGT if the property is sold earlier. If the vendor is a private individual the CGT is levied at 20% on a normal house. Also worth remembering that the vendor is responsible for producing the required documentation on the property for the sale to take place; so any missing documents have to be procured at the vendor's expense.

Terre Antiche Marche Italia
Tel: 0039 329 7027203 / 0039 338 3509924  Email: info@terreantiche.net