Process Of How To Buy A Property In Italy
1)THE FISCAL CODE
The first words you need to get familiar with are CODICE FISCALE.
If you are thinking to purchase a property in Italy and also when you open an Italian bank account (or to buy a car) you will need a CODICE FISCALE.
It is an identification code calculated on the basis of your surname, your names, the place of your birth and the date of your birth and which will be used any time you will need to deal with the Authorities.
If you decide to purchase a property with us we will undertake to obtain the Codice fiscale for you without any extra charge.
2)OPENING AN ITALIAN BANK ACCOUNT
In the event of a purchase, it is essential to open a bank account in Italy not only to transfer there the funds for the completion ( as the final payment normally happens in Italian bankers drafts) but also to get the various utilities paid automatically.
We will be happy to introduce you to a local bank with an English speaking manager.
Then, on the same day of the completion or the day before, we will come with you to the bank to organize the final payment.
3)FORMAL OFFER OF PURCHASE
When a client, after having visited some properties, decides to go ahead and to buy one of those, we are then happy to start a negotiation on his/her behalf.
Usually, just a verbal offer is enough, sometimes instead a written formal offer of purchase is exchanged ( lettera di intenti or proposta di acquisto) . If the vendor signs it, accepting the offered price, this means that he undertakes to not sell the property to anybody else until a certain date.
This letter is to protect the buyer from losing the opportunity to purchase.
Before going ahead we take care of investigating the title of the property by going personally to the Urban and Land property registry office (cadastro). We check that the property is properly registered, that it belongs to the person who is undertaking to sell it and if there are loans on it.
A meeting with the Notary then will confirm that everything is 100% in order.
5)PRELIMINARY AGREEMENT OF SALE (Compromesso) 20-30 % deposit
As it is not possible to keep a property off from the market for a long period without a deposit, it is important to make sure that the preliminary agreement of sale is signed as soon as possible.
The preliminary agreement of sale called in Italian “ compromesso” is a private agreement between the two parties where a price is agreed and where the vendor undertakes to sell the property within a given date, to the buyer who undertakes to purchase it.
This document is drawn up and translated by us.
On the compromesso, there is a detailed description of the property including the cadastral details.
The document is private because it is not registered unless something goes wrong, but it is, at the same time legally binding. At this stage of the purchase, a deposit is paid to the vendor.
Upon the signing of the preliminary agreement of sale, the buyer normally pays a deposit between 20 and 30% of the agreed price.
Once the deposit is paid, then, if the vendor backs out, he will have to pay back twice of the deposit; while, if the buyer backs out, he loses his deposit.
This important clause is included in the article of the “Caparra confirmatoria”.
6)THE CAPARRA CONFIRMATORIA ( article 1385 of the Codice Civile)
On the compromesso we mention an important article of the Italian law, called “ Caparra Confirmatoria”, which regulates the payment of the deposit.
If the vendor withdraws or fails to complete the transaction, in fact, the purchaser is entitled to a refund of twice the amount of the “caparra confirmatoria”, while if the buyer withdraws or fails to complete, he /she will lose the deposit.
This is the reason why the compromesso is a very important document, legally binding and why the deposit is a strong disincentive to back out the deal.
7)FINAL PURCHASING DEED ( Rogito Notarile) 70%-80%, final payment.
When both the vendor and the buyer are ready we fix the date of the deed.
It is usual that the final contract takes place between 1 to 6 months from the date of the compromesso. The Atto di Compravendita is a public contract which, after having been read by the Notary, is signed by both the vendor and the buyer in front of him who, as a public official, authenticates it with his/ her signature and stamp. At the moment of the deed, the purchaser takes full title and possession of the property.
At this stage, the remainder of the price is paid in bankers drafts.
*It is important to know that the appointment with the notary, who is always very busy, needs to be booked some time in advance and also that his/ her office is closed on Saturday and Sunday.
8) IMPOSTA DI REGISTRO
At the moment of the completion (Rogito Notarile), the buyer pays, not only the Notary’s fee (normally about 2.4% of the property’s declared value) but also the property’s purchase tax, called “ Imposa di Registro” plus the expenses of the Notary for stamps and Duties.
If you are buying your first property in Italy, there is the possibility of paying 3% of the declared value of the property instead of 10%. This reduction can be obtained only if you will become resident in the property within 18 months from the date of the completion.
The Notary will therefore write on the deed that you want to benefit from this reduction and you will, therefore, undertake to become resident in the property within 18 months.
To know more about that, please do not hesitate in requiring us more information.
We can help you in getting the residency without charging any extra fee.
9)CLEAR AND LEGIBLE SIGNATURES
It is very important to know that the Notary will require you to sign the deed with a clear and legible signature in handwriting with your first, middle and second name.
10)REGISTRATION OF THE DEED
Within a period of 6 to 8 weeks the Notary is responsible to register the deed at the “conservatoria dei registri immobiliari”. Thanks to this registration your title will become effective at the Land and Urban property Registry. After this, the Notary will be able to provide you with a copy of the deed which will act as your title deed.
11) THE DECLARED VALUE
Every property, here in Italy, has what we call a “Rendita catastale” which is a value the property is identified with at the Property Registry ( or at the Land Registry in case it is a barn and so still a rural building). It does not correspond at all to the actual price of the property and it is always quite lower than it.
The “Rendita Catastale” is something which the property has been identified with at the moment of the registration at the property registry and so, often is very old.
Over time, this value is updated, but not following the real properties market value; this is the reason why most properties have a very low declared value.
At the moment of the final deed the Notary will ask you to declare to him the value of the house; at that moment it is suggested to declare the lowest possible price. It must be not lower than the value declared the last time the property has been sold. The notary will then update it a little bit.
Typical costs to buy:-
Purchase Price (- deposit)
Estate Agency fee 3% of Purchase Price
Bolli (Stamp duty)
Looking to buy a property in Italy