So you’ve found your new home in Italy, and now you wish to buy your villa in Tuscany, your apartment in Umbria, your estate in Puglia … let’s get down to business. The first thing to remember? Forget all you know about buying a home in the UK, the US or wherever: buying property in Italy is different.
Terms you may recognise from the UK or American house-buying process may have completely different meanings here - safer to start anew. As ever, we recommend that you engage your lawyer at the earliest stage for your own protection. In fact we recommend that you engage a lawyer or solicitor from your home country in addition to the Italian lawyer who handles the deal (the notaio or notary public) of which more below.
You decide on the Italian property you want to buy and make an offer to the vendor — this will normally be via the estate agent or realtor. As a gesture of good faith this will usually include the payment of a small holding deposit, displaying your commitment to buying the property in Italy. The offer usually involves the delivery of a small down payment to the agency.
Something to note here — until we get to preliminary contracts this offer is binding only upon the buyer not the vendor. This has certain implications. First you need to make your offer contingent upon the property fulfilling certain criteria — you’ll be going into this in more detail when your notaio and geometra (architect/surveyor) enter the picture. You may also want to put a time limit on your offer: this could avoid the frustration of your vendor leaving you dangling in limbo, your watching other villas in Piedmont or Liguria sell, only for the vendor then to decline your offer.
How much to offer for your apartment in Italy? Just as anywhere, real estate is worth what someone will pay for it. It’s acceptable to make offers above the asking price if this is your dream Italian villa and you don’t want to lose it; it’s also acceptable to make ‘silly’ offers below the asking price … sometimes people bite. Don’t be embarrassed about driving a hard bargain, the vendor always has the right to say ‘no’ after all.
You will certainly be using a notaio (notary public), and may also employ an avvocato (closer to our solicitors, attorneys or lawyers) or you might employ a lawyer from your home country. Unlike the UK, the legal executive acts for both vendor and buyer (this is also the case when buying property in France incidentally). The notaio, legally empowered to witness and validate deeds and contracts, is a public official but charges fees for his services.
Generally, only a notaio can witness the legal deed of sale (scrittura private autenticata), and perform the vital task of registering the sale at the land registry (ufficio dei pubblici registri immobiliari). Vital, because until the sale is lodged at the land registry, the contract (though binding upon vendor and buyer) is not binding upon third parties; this could come into play should any creditor, for instance, be deemed to have a claim over the vendor’s property.
The notaio’s fee is legally fixed and is on a sliding scale according to the property sale price. As part of his duties he will carry out the checks you’d expect of your lawyer in the UK or US — doing the local search, checking on planning permissions, the title deeds, rights of access, that the vendor really does own the real estate and so on. He is also responsible for registering the sale for tax purposes.
The notary system has some major advantages: he is independent and impartial, and he is likely to have been appointed by the vendor and done a lot of the preliminary work on the details of the property before you come on the scene as a buyer. But of course he won’t be batting for you the way your own lawyer would; he certainly won’t be able to advise you on the implications of the purchase under British or US law, or under the British or US tax system.
We strongly advise that you seek the advice of a home lawyer versed in the Italian property market: it could save you a lot of money and a lot of hassle. Another option is to employ an Italian lawyer, or avoccato, to handle your side of the sale (the notaio will still of course be involved). This way you’ll have an Italian legal expert to advise you, advice you won’t get from the notary.
The other professional you’ll meet is the geometra: not exactly an architect, not exactly a surveyor, he’s a bit of both. The geometra system is slated to change in Italy, with everyone simply becoming an architetto, though where this leaves the existing professionals who knows. An architetto tends to know very little about the mundane aspects of Italian buildings and real estates (boundary rules, electricity and gas supply and so forth), while geometri are unlikely to have taken on large building and restructuring projects.
The geometra’s extensive checklist spills over from what we would expect of a surveyor into what we’d see as the province of our lawyer or solicitor at home. The selling agent or vendor may well recommend a local geometra.
If the vendor accepts your offer, the two of you have then entered a binding deal (up to a point). This is then formalised via the contratto preliminare or compromesso. At this point you must seek legal advice (remember here that the notaio is not acting for you, so employ an avoccato or a home lawyer well-versed in Italian real estate law and practice.
The contract stipulates that both parties agree to buy and sell the property, and concur on the terms and conditions of the sale. The contratto will usually be prepared by the real estate agent; this isn’t quite as terrifying as the idea of an English estate agent preparing a legal contract on which your future hinges, in Italy the agents have professional qualifications. Nevertheless, any errors or omissions here could have far-ranging consequences, so getting a legal eye to double and triple check is essential. On signing, you the buyer will usually pay a deposit of between 5 and 10 per cent of the purchase price.
Remember here that though the sale isn’t complete, you are both bound by the compromesso. An attempt by either side to back out gives you (or them) the right to force the sale through or seek damages (twice the deposit if it’s the vendor who drops out). For their part, they can keep your deposit should you renege. You can register the compromesso, protecting your deal (at least in part) against the rights of third parties … more on that below. You’ll have to pay for this, but it’s worth doing particularly if there is to be a long delay between compromesso and rogito.
The final stage is the signing of the deed of sale, the rogito, the equivalent of completion in a UK property transaction. Just as at home, there is a nervy wait while certain checks are made. And while we are used to horrors such as gazumping, gazundering and chains falling apart, there are additional issues with your purchase of real estate in Italy.
The principle of prelazione, third parties’ right to buy, allows neighbours adjoining the land first refusal on the property at the asking price. It sounds bizarre to many foreigners but was designed for rural areas where a small farmer might wish to expand his farm (and thus reverse the ruinous sub-division of agricultural estates that once bedeviled much of the countryside). Hence prelazione is officially limited to ‘direct growers’ or coltivatori diretti. Once the compromesso is signed, the contract and your name is sent to all neighbouring farmers, who have 30 days to decide whether to match your offer. You cannot ask them to waive this right.
Sitting tenants and people conducting a business from the property also have a right to buy. You may be unsurprised to learn that your sale can be stymied by interested parties putting in a last-minute offer and having to be bought off.
Another potential problem is the habit of willing a property to a group of siblings rather than a single person. See a rural property unoccupied and gradually rotting away and there’s a fair chance that it’s frozen in a probate row between family members. Equally, one of the potential vendors may pull out of a projected sale. It may be cynicism, and a payment may get them back onside, but it can be the inevitable result of dealing with multiple vendors. Either way, protect yourself by getting all the vendors to sign the agreement at the compromesso stage.
Other than this, we’re looking at the normal issues of searches and planning permission. Is there a motorway scheduled to be driven through your olive grove? Is the person selling you your villa in Tuscany the legal owner? Are there outstanding mortgages on the property? (Just because Italian real estate is sold on it doesn’t mean the mortgage is void or paid off).
If no neighbouring farmers take up their prelazione, you can head to the rogito. Some vital points about price here. For generations it has been customary to under-declare the price paid for real estate in Italy, as taxes and the notaio’s fees are worked out on the declared price. There are even formulae for working this out. The notary would of course know the real price of the property, but would come to an arrangement with you. Should this be too much for any innocent Anglo-Saxon sensibilities out there, you need to remind yourself that Italy’s different.
Thankfully, this is a process that is gradually dying out (though older buyers may expect you to follow the practice). But for obvious reasons, it’s vital that the price in the deed of sale is not lower than the price you supplied to the neighbouring farmers. Should they discover the disparity, the deed of sale can be challenged within a year. Incidentally, this brings in the idea of buying through a limited company as company shares in a property can be redistributed without triggering a prelazione (and this will make the property more sellable in future).
Now we come to signing the completion date or data del rogito. It’s possible that if you are buying from overseas you won’t be able to be present at the allotted date of signing. No problem, you can assign your power of attorney to a friend or agent in Italy (and it’s worth doing this as a fallback just in case). In any event, ensure you physically check over the property before the completion date. This won’t stop them subsequently removing the lightbulbs at the last minute, but other things may jump out at you now the excitement of first viewings is over.
For completion you’ll need to have your codice fiscale (tax code); ask your solicitor or the real estate agent to arrange this for you. You’ll also need to provide a passport or other valid identification, and you need to ensure the funds or mortgage are in place. We’d advise you to have a translator if your Italian isn’t good, as things can get confusing here among the melee of estate agents, vendors, notaries and so forth. The rogito is signed and the balance of the purchase price handed to the vendor. This is usually by way of bankers draft, transactions in plain brown envelopes as part of an under-declaration are to be strenuously avoided: it’s not entirely unknown for buyers to be robbed on the way to a signing.
At this point you’ll be pulling out your cheque book with alarming frequency. You’ll be paying real estate tax (imposta ipotecaria e catastale) of 3 per cent, stamp duty of 7 per cent, a local tax (valore catastale) of between 0.4 and 0.8 per cent, your mortgage fees and estate agents’ fees. Alarmingly for UK buyers, both seller and buyer pay the estate agent, usually 3 per cent apiece. You’ll also have to settle with the geometra, notaio and pay your fees for connecting to the water, electricity and gas mains. Reckon the fees here to total 15 per cent of purchase price.
The notaio should now file and register the title deeds (and lodge your taxes) immediately. Only when the deeds are with the land registry is the property officially yours, so this is important. He should also inform the local police (carabinieri) or the questura of the change of ownership within 48 hours. Ensure also that the utilities have been changed into your name. You must also ensure that you are adequately insured.
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