Every country has its laws and its bureaucracy. The purchase of a property in Italy requires the knowledge of technical jargon other than of a very specific process. It’s not only that, the actors that come into play in this sector are distinct professional figures.
Every real estate agent that works in Italy, for instance, needs to be officially registered at the local Chamber of Commerce and have suitable professional insurance.
Real estate agents in Italy: who are they and what do they do
Usually, a real estate agent in Italy works as a self-employed professional. His role is to put in contact a buyer and with an available seller, and they are paid by both parties. Careful: the real estate agent is not responsible for the fulfillment or the solvency of the seller/buyer. If the purchase, after the contract, is annulled or canceled for nonfulfilment, the real estate agent’s commission still has to be paid! The real estate remuneration is usually around 3% of the purchase price of the property.
What are the steps to go through when buying a house in Italy?
In Italy, the purchase process of a property can be divided into three macro-moments:
- Preliminary phase
- Draft
- Actual purchase
Let’s see them in detail.
1. Preliminary phase
– Budget draft
As for any purchase, you’ll have to impose a maximum limit on spending. How much are you
willing to spend on your dream house in Italy?
– Choosing the area
Whether you are buying a second home or business real estate, the choice of the area has a crucial role. Our recommendation is to not go through with the purchase if you don’t know the neighborhood well and to follow the advice of a professional who can check on the spot the area’s quality.
– Looking for real estate
Once the budget and the area of interest have been determined, you’ll have to find the right house. The Italian real estate market moves quickly and often the houses don’t even get to be on major buying and selling websites. The real estate agent’s knowledge of the territory is what makes the difference in finding a good deal…
– Cadastral inspection
Once you have found the real estate, you must make sure that there isn’t any problem. To do so, the next procedure is the inspection at the cadastral offices.
2. Draft
If the cadastral inspection was successful, then you can proceed with the second phase: the draft.
This one is composed of at least three sub-divisions:
2.1 Purchase proposal
The buyer proposes a price to the seller with a formal act.
2.2 Deposit
If the seller accepts the buyer’s proposal, then the latter will have to pay a deposit. It is a percentage of the total payment as a guaranteed title. Usually, it is 20-30% of the total purchase sum of the property.
2.3 Compromise or preliminary contract
The compromise is a pre-contract. Once the deal between the buyer and the seller is reached, the seller, the lawyer, and/or the buyer’s surveyor will undertake the initial examinations, will check the property titles, and will verify the title registration. In addition to that, they will verify the correspondence with the building concessions and the existence of potential agrarian pre-emption rights (if applicable) or State pre-emption rights (if the building is registered as a historic monument).
Afterward, the next matter is signing a compromise, a completely exhaustive purchase contract.
The compromise doesn’t transfer the property title, but only has the goal to establish all the selling details. In this way it allows the seller to gather the required documentation and make sure that the property is being vacated by personal belongings or people within the purchase date. It also enables the buyer to have the time to prepare the grounds for the purchase. Owing to the document’s importance, its drafting is taken care of by a notary.
The notary’s fees, according to Italian law, are to be covered by the buyer, who can choose their trusted notary.
Costs to cover in this phase
- Registry tax: 200 euros.
- 16 euros every four pages or every 100 lines of the stamp duty.
- Deposit (that will be deducted from the real estate total cost).
Is it required to have an Italian tax code (Codice Fiscale) to buy a property in Italy?
The answer is yes. Among the required documents to buy a property in Italy, there is the Italian tax code: codice fiscale. We cover this matter in our article.
3. Actual purchase: deed of sale (rogito)
The deed of sale is a notary act with which the real estate purchase is made official.
Only the deed of sale has the authority to transfer the property. At the deed of sale procedure must be present:
- The buyer
- The seller
- An employee of the bank that is granting the mortgage.
- The notary
The latter has a very precise function: make sure that the purchase is being carried out in full respect of the law. It has a cost (minor if it’s the first home because of tax relief). The notary costs also include stamps, the mortgage certificate, and VAT/Sales tax on remuneration.
The notary, after the signing of the legal deed of sale, will proceed to register the transfer of the property at the Title Office and will pay for the stamp duty and the other taxes on the purchase on the buyer’s account.
What happens if you can’t be physically present at the deed of sale? Don’t worry, read here.
Buying a house in Italy tax
| Type | Sales tax/VAT | Registry tax | Mortgage tax | Cadastral tax | ||
| First home | privately | not owed | 2% (min. 1000€) | 50€ | 50€ | |
| from a construction or restoration company (within 5 years since the works) | 4% | 200€ | 200€ | 200€ | ||
| from a construction or restoration company (after 5 years since the works) | with sales tax/ VAT option | 4% | 200€ | 200€ | 200€ | |
| without sales tax/ VAT option | not owned | 2% (min. 1000€) | 50€ | 50€ | ||
| from other companies | not owned | 2% (min. 1000€) | 50€ | 50€ | ||
| Second home | privately | not owned | 9% (min. 1000€) | 50€ | 50€ | |
| from a construction or restoration company (within 5 years since the works) | 10% (22% if it’s a luxury property) | 200€ | 200€ | 200€ | ||
| from a construction or restoration company (after 5 years since the works) | with sales tax/ VAT option | 10% (22% if it’s a luxury property) | 200€ | 200€ | 200€ | |
| without sales tax/ VAT option | not owned | 9% (min. 1000€) | 50€ | 50€ | ||
| from other companies | not owned | 9% (min. 1000€) | 50€ | 50€ |
Property tax in Italy
IMU: Imposta Municipale Unica is a property tax based on the cadastral value of the property and it’s collected twice a year by the Municipality in which the real estate is located: in December and in June.
At the moment IMU is at 22%, but the cost is to be considered just for some kinds of real estate.
To calculate IMU you can have a look here: Calcolo IMU|IMI|IMIS 2022 e Stampa Modello F24
How do taxes work for foreigners? It depends.
There are different types of situations. Usually, everything that concerns real estate is regulated by the country in which it is located. Examples: IMU is calculated based on some parameters that are the same as the ones for foreigners. For a foreigner, it’s the same, if they move their residency to that house they will have the benefits both on the purchase price and on tax relief and IMU exemption. But moving to a fiscal residency is not easy for someone who works abroad, discover here how to buy a second home in Italy.