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Buyers Guide
The real estate sales and purchasing process in Italy is fairly streamlined and not particularly complex. For the most part, a foreign national stands in the same shoes as does an Italian citizen, with one exception. When it comes to the purchase of real property in Italy, a foreign national must pay a 11% purchase registration tax after the sale itself is consummated. An Italian citizen must only pay a 4% purchase registration tax. In Italy, the first step towards the purchase of property is the initial agreement between the parties. Once the initial agreement is signed and executed, there are some primary tasks that must be completed by the parties. For example, the buyer must obtain appropriate and sufficient financing. The seller must work to make certain that title to the property is free and clear of any and all encumbrances so that it can be conveyed to the buyer. When this initial agreement is signed, the seller will post a deposit in the amount of at least 10% of the total purchase price of the real estate being sold. It is not uncommon in Italy for deposits to run as high as 50% of the overall purchase price of the property. Deposits in Italy tend to be higher than what is seen in many other countries around the world. Generally speaking, the deposit is not refundable if the buyer simply decides that he or she does not want to buy the property. Indeed, the only real circumstances in which a buyer can obtain a refund of the deposit -- even a hefty deposit of upwards to 50% of the purchase price -- is when the buyer backs out of the deal or in circumstances when clear title to the real estate cannot be obtained within the time set forth in the initial agreement between the parties. The real estate purchase process is overseen by a notary in Italy. The notary actually has more duties than is normally associated with a notary involved in real estate transactions in other countries the world over. For example, the notary in Italy is responsible for carrying out title searches to make certain that the title to the property is free and clear of any obvious defects or liens. Many real estate experts in Italy recommend that a purchaser take the time to hire what is known as a geometra. The geometra will survey the physical boundaries of the property for sale to make sure that it actually does comport with what is listed on the legal description that is subject to a contract for sale. (These experts maintain that this particularly is important when it comes to older properties in Italy.) The real estate purchasing process can take upwards to six months to complete in Italy. For this reason, unlike in many other countries around the world, it is a commonplace occurrence for a purchaser to move into residential property after the initial agreement is signed. In most countries around the world, the purchaser does not take possession of the property until the final agreement is executed and the deed to the property is transferred from the seller to the buyer. Real Estate Prices in Italy Range Varies, for example: From £30,000 / 58,000 for a small property in need of extensive development. From £35,000 / 150,000 for an apartment. From £50,000 / 250,000 for a rural home. Generally speaking, Italy is fast becoming popular as an alternative to the like of Spain/France and as a result property is starting to increase rather quickly in certain areas especially in Tuscany and the coastal areas. Location Italy There is a great deal of variety in the landscape in Italy, although it is characterized predominantly by two mountain chains: the Alps and the Apennines. The former extends over 600 miles from east to west.The Alpine foothills are characterized by large lakes: Lake Maggiore and the lakes of Como, Iseo and Garda. The principal islands are Sicilia, rising up to the great volcanic cone of Etna (10,860 feet) and Sardinia. Living Costs in Italy The northern and central regions are quite expensive while the southern part of Italy is generally less expensive to live in. The major cities are similar in terms of costs of living to Britain. Luxury goods like cars and white goods can be expensive. Wines and alcohol are relatively cheap throughout the country. Solicitor / Lawyer Wherever possible, try to enlist the services of a local Lawyer or Solicitor to act on your behalf, preferably one who speaks English. They will be responsible for drawing up your contracts, contacting the Notary, paying any taxes and registering the property with the land registry in Italy. They will normally charge between 1 - 2% of the sale value of the property. It's important to deal only with a qualified and licensed agent, and to engage a local lawyer, before signing anything or paying a deposit. A local surveyor may also be necessary, particularly if you're buying an old property or a property with a large plot of land. Your lawyer or surveyor will carry out the necessary searches regarding such matters as ownership, debts and rights of way. Enquiries must be made to ensure that the vendor has a registered title and that there are no debts against the property like mortgages or taxes and check the property has the relevant building licences, conforms to local planning conditions and changes have been authorised. Check for selling consent of all family registered owners and water supplies for countryside properties. Property Tax Income tax (IRPEF) is high in Italy and ranges from 10%-60%. Non-residents must submit a tax return stating the details of their Italian property, even though there's no tax to pay if no income is derived from rental etc. The standard rate of VAT is 19%, with reduced rates to a minimum 4%. VAT is payable on new properties at 9% for non-luxury property and 19% for luxury property. The local community tax or rates, ICI, ('Ichy') is paid by anyone who owns property or land in Italy, whether they are a resident or non-resident. It's levied at between 0.4% - 0.7% of a property's value, the actual rate being decided by the local authority depending on the size of the property, location, class and category. If a property is unfit for habitation it could qualify for a 50% reduction. ICI is paid in two instalments in June and December. Mortgages These are available from Italian banks but can be lengthy to approve, and usually you can obtain better terms from foreign financial institutes with borrowed amounts against purchase price of up to 80%. Remember to declare any funds brought in to your Italian bank. Maximum loans from Italian banks on property are usually 50-60% of buying price for second homes and nearer 75% for your main residence, usually up to 15 years.
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