FAQ

Which are the Italian Areas most Invested in? Why?

Tuscany tends to be North Europeans first port of call. It is the region they most readily associate with all that is wonderful about the Italian lifestyle and culture and a location that is easily accessed overland from central Europe.

Buyers of all nationalities feel a similarly magnetic pull towards Tuscany as the epitome of Italian charm, from its city architecture and rural farmhouses to its glorious landscapes and views.

The strongest interest is for areas around Lucca, Chianti and into the Val d’Orcia, the perennial favourites. Buyers happy to be a little further from cities and airports in return for greater value for money are looking at Maremma, a region that has the added appeal of long, woodland- fringed beaches.

After a stint in the doldrums, Sardinia’s Costa Smeralda is seeing renewed interest among buyers from the Middle East, but also from Germans and Northern Europeans.

Americans are slowly taking a renewed interest in Italy, partly promoted by highly favourable exchange rates earlier in 2016. Russians, too, are returning to the mid-priced market, particularly in Liguria.

What are the Overall Costs of Purchasing a Property in Italy?

In summary, the overall costs of purchasing a property in Italy depends on the Stamp Duty and purchase tax rates applicable to the asset.

These costs consist primarily of property taxes, notary fees and agency fees.
As a very general indication this can be expected to amount to circa 10% to 12% of the purchase price.

Income tax is payable in Italy by all property owners on the theoretical rental income of the property during the year;
non-residents in Italy are subject to this tax only if the income exceeds a certain threshold.

IMU: Council tax (Imposta Municipale Unica) is a property tax based on the land registry value of the property and is collected by the local authority twice a year.

There is currently no Capital Gains Tax in Italy for private individuals if the disposal of a property takes place more than ve years after the purchase.

All foreign owners are advised to draw up an Italian will.

The standard IVA rate in Italy is currently 22%. This note is meant to give a very basic indication of the purchasing process and no liability is assumed as each interested person should seek local professional advice.

What about the Completion?

Following Compromesso, the Notary Public (an independent professional who holds the Seal of the Republic and collects taxes on behalf of the Government, payable by the buyer, but not representing any of the parties) will undertake an appropriate update on title search, tie up any loose ends and prepare the final contract transferring title.

If the seller is found to be in material default of any warranties made under the Compromesso, the purchaser may withdraw and claim back the deposit paid, and possibly more as a predetermined penalty.

If the purchaser withdraws after Compromesso without just cause he/she will forfeit the deposit.

Please be aware that damages could also be requested from either side under certain circumstances and that an enforcement order could be obtained as well.

What to do Prior to Completion?

Prior to completion the buyer must have obtained an Italian tax code number (Codice Fiscale);
the agent can help in this process.

Further tax advice should be sought as to the advantages and disadvantages of becoming resident in Italy and appropriate vehicles for holding the property.

If renovation work is planned, which is subject to strict regulations under local planning rules, please note that permissions can take up to a year, so the earliest involvement of an architect/ surveyor (Geometra) is advisable.

What happens if the Purchaser Withdraws after Compromesso?

If the purchaser withdraws after Compromesso without just cause he/she will forfeit the deposit.

Is a Legal Counselling necessary?

A legal support is recommended, as the purchase offer, if accepted, becomes a fully binding contract under Italian law.

What about the Legal Jurisdiction?

The purchase offer provided by the buyer, if accepted, becomes a fully binding contract under Italian law.
Legal advice should be provided, as the purchase should be approached with caution.

What about the Exchange of Contracts?

The buyer may be requested to provide a formal written offer for the purchase of a property, which should be approached with caution, and great attention and possibly legal counselling should be obtained as the offer, if accepted, becomes a fully binding contract under Italian law.

The buyer may also be requested to put down a bank cheque to be held in escrow by a real estate agent in order to secure the offer (Proposta d’acquisto). In most cases however, the buyer and the seller upon reaching agreement on the terms of a sale would enter into a preliminary agreement (Compromesso) which has the legal effect of fully binding all parties.

The Compromesso does not transfer title but is meant to set out all details of the sale and enable the seller to gather the required property documentation. It also allows the purchaser time to prepare funds for the purchase.

Usually a deposit of 20% to 30% of the purchase price is exchanged between buyer and seller at Compromesso. Given the importance of the document the drafting is entrusted to a Notary, who is instructed (and paid) by the purchaser.
Upon reaching agreement between buyer and seller the buyer’s solicitor and/or surveyor will undertake initial searches, check for good title, check consistency with planning permission records and check for any agricultural pre-emption rights (if applicable), with a view to drafting a fully detailed Compromesso (which in certain circumstances may be conditional upon specific conditions being met).

Agent’s fees under Italian law are payable by both the buyer and the seller. The standard rate at this time is 3% +IVA for seller and 3% + IVA for buyer, sometimes payable in part upon the exchange of the Compromesso

How to Start the Purchase Procedure?

To start the purchase procedure, the buyer may be requested to provide a formal written offer for the purchase of a property, which should be approached with caution, great attention and possibly legal counselling should be obtained as the offer.

The buyer may also be requested to put down a bank cheque to be held in escrow by a real estate agent in order to secure the offer (Proposta d’acquisto).

In most cases however, the buyer and the seller upon reaching agreement on the terms of a sale would enter into a preliminary agreement (Compromesso) which has the legal effect of fully binding all parties.

What are the Main Issues of the Purchase Procedure of a Property in Italy?

It is not easy to give an accurate estimate of the purchase procedure issues, steps and timelines.
This depends on the completion of the process factors, such as the type of property,  if there are any problems with the property, the need of obtaining financing and more.

In principle, the main issues relating to buying a property in Italy are:

The Exchange of Contracts (Purchase Offer/Proposta d’acquisto, Preliminary Agreement/Compromesso)
The Prior to Completion (Tax arrangement, Renovation license and projects)
The Completion (Rogito Notarile)
The Ownership and Costs Issues

Are Property Prices Falling?

Italy is a land of opportunity. Now it is a great time to house- hunt.
There is a large amount of stock available and prices have more or less hit their floor.

Even if in places like Rome, Lucca, Pisa and Como Lake Pricing are rising, a trends analysis shows a general prices decrease, even if the country’s major cities, like Rome, Milan, Florence and Venice, have seen their rate of decline slow significantly in the last years.

 

Why to invest in Italy?

Now in Italy is a great time to house- hunt.
There is a large amount of stock available and prices have more or less hit their floor.
Like much of the world, Italy may be in a period of political flux- which naturally prompts a sense of uncertainty among buyers- but for a lifestyle purchase, it is hard to beat.

The Italian lifestyle is well-known all around the world.
Italy is a concentrate of arts, design, architecture, music, sport and food culture. And it has been honing many of its best-loved cultural events for centuries.

That’s why there are big investors in second homes in Italy.