Who Can Buy Property in Italy?
Foreigners are generally allowed to purchase property in Italy, but the principle of reciprocity applies: if your home country allows Italians to buy property there, Italy will allow you to do the same. Citizens of the European Union (EU) and the European Economic Area (EEA) face no restrictions, while non-EU buyers should verify whether reciprocity agreements exist between their home country and Italy.
Unique Opportunities: €1 Houses
The widely publicized €1 home programs in small Italian towns are appealing but come with specific conditions. Buyers must commit to renovating the property within a set period and face bureaucratic challenges, such as obtaining consent from multiple heirs. Additionally, purchasing these properties does not guarantee a visa.
The Property Purchase Process in Italy
Step 1: Finding the Ideal Property
Working with a licensed real estate agent (with a Partita IVA tax code) ensures a secure purchase. Real estate agent fees typically range from 2% to 5% of the property's price, shared between the buyer and the seller. Alternatively, a real estate lawyer can conduct due diligence (verifying ownership, outstanding debts, and legal issues) for added security. Legal fees generally range from 1% to 2% of the purchase price.
Step 2: The Binding Proposal
The proposta irrevocabile d'acquisto is a binding offer from the buyer at an agreed price. A deposit may be required, and it is safest to place it in a notary's escrow account. If the buyer withdraws, they forfeit the deposit. If the seller backs out, they must return double the deposit to the buyer.
Step 3: The Preliminary Contract
The "compromesso" formalizes the agreement, detailing the price, property specifications, and completion date. The buyer pays a deposit of 10%-20% of the purchase price as a guarantee. Registering the compromesso with a notary prevents the seller from accepting other offers. Using an escrow account for payments is highly recommended.
Step 4: Finalizing the Sale
The final contract (rogito) is signed before a notary, who ensures the transaction's legality. The buyer must declare payment details, and taxes are calculated based on the cadastral value of the property, often lower than the market price. Once signed, ownership is officially transferred to the buyer.
Costs of Buying Property in Italy as a Foreigner
Property Taxes in Italy
• First home (non-luxury properties): 2% of the property price.
• Second home or non-residents: 9% of the property price.
Additional Costs
• Notary fees: 1–2% of the property price.
• Legal fees: 1–2% of the property price.
• Real estate agent fees: 2–5% of the property price.
• Interpreter fees (if necessary): €500+.
• Mortgage fees: If applicable.
The costs outlined above are for informational purposes only and may vary based on specific circumstances. In some cases, VAT or alternative tax calculation methods may apply. It is recommended to consult a professional for accurate and up-to-date information.
Ensuring a Safe Investment
The Role of the Notary:
Italian notaries are neutral public officials responsible for verifying property ownership, ensuring the property is free from mortgages or debts, and confirming compliance with building regulations. However, they do not inspect structural defects, so hiring a surveyor is advisable.
The Role of a Real Estate Lawyer:
A real estate lawyer conducts due diligence, verifies ownership, ensures compliance with laws, and drafts fair contracts. Their expertise is crucial for foreign buyers, helping to avoid legal risks and ensuring a smooth transaction.
Auctions to Buy a Home in Italy
Types of Auctions
• Vendita con Incanto: Open public bidding.
• Vendita senza Incanto: Sealed bids submitted in advance.
Winning bidders must pay a 10% deposit and settle the balance within a specified period. Ownership is officially transferred by the court upon full payment.
Legal Advice for Foreign Buyers
• Always declare the full purchase price: Avoid potential capital gains tax issues during resale.
• Conduct a title search: Ensure the property has a clear title with no liens or legal disputes.
• Check building permits: Ensure all property modifications have the necessary legal permits.
Conclusion
Buying property in Italy is an exciting opportunity, but it requires careful planning and professional guidance. Understanding regulations, costs, and legal procedures is essential for a secure investment.
*The information above are deemed reliable but not guaranteed. Always double check.
Steps to buying property in Italy
