The Buying Process for a Real Estate Property in Italy
Investing in real estate is often considered a safe investment, especially compared to volatile markets like stocks and crypto. Italy is an especially attractive real estate market for appreciation, coupled with its alluring lifestyle opportunities. In an Emerging Trends in Real Estate report, Milan in particular was labeled a ‘market to watch’ for its urban regeneration projects that continue to elevate the city and place it among the most financially opportunistic in Europe.
If you’re committed to buying your first investment property or vacation home in Italy, take a look at the buying process below which essentially boils down to 3 main steps: the initial offer, the preliminary agreement, and the deed of sale.
Where to Begin
Italy is comprised of 20 different regions with varying climates, landscapes, and lifestyle activities. You may favor biking or skiing in the mountains to walking along a sandy shore, or getting to know your neighbors in a quaint town versus the hustle and bustle of a metropolitan city. If you’re unsure where you want to live, it’s a good idea to consult with a real estate agent when you’re ready to start the search process. They’re familiar with Italy’s territories and real estate markets.
While only a small percentage of real estate agents in Italy speak a language other than Italian, Spadafora Realty also accommodates clients in English, Spanish, and German. We openly collaborate with all agencies and search for all available property listings on the market, whereas many companies just assist buyers with the properties in their portfolio.
Consider the following criteria before you begin your search:
- Budget (with a down-payment in a range of 30-40%)
- Property Type (i.e. apartment, single-family house, townhouse, commercial investment property, etc.)
- Property Condition (i.e. new construction, recently renovated, or rustic)
- Number of Bedrooms and Bathrooms
- Preferred Regions or Nearby Attractions
- Must have Amenities (i.e. distance to public transportation, beach, ski resorts, etc.)
Documents you Need to Purchase a Home in Italy
In order to purchase a property in Italy, you’ll need a “codice fiscale” or fiscal number. Essentially, it is a tax identification number that does not imply any tax duties. It can be requested for free by emailing your local Italian embassy or consulate. Notify them you want to place an offer on a property, and it should take a few weeks to issue.
If you’re considering mortgage options in Italy, banks will typically request your recent tax returns, employment agreement, pay slips, and passport or “carta d’identità” if you’re Italian.
The Buying Process
Once you’ve uncovered your dream home or investment property, there are 3 key steps and notable professionals that comprise the buying process.
Step 1: The initial offer, or so-called “Proposta,” is a document outlining the offer terms. You might be requested to provide a formal written offer to purchase the property. Under the Italian law, an accepted purchase offer becomes fully binding, so it is important to consider your offer carefully. To demonstrate the seriousness of your offer, you may be requested to put down a check as a deposit, between 1% and 5% of the offered price which will be held in escrow with the real estate agency.
Step 2: The preliminary agreement or “Preliminare” or “Compromesso” in Italian is an agreement listing the terms on the sale of the house. It’s signed by the buyer and the seller, binding both parties to complete the transaction. During this step, the buyer typically pays 10% of the purchase price as a down-payment, and both the buyer and seller pay agency fees which generally amount to 3% each. The preliminary agreement is usually signed at the notary public’s office.
Step 3: The Deed of Sale. Following the preliminary agreement, the notary public performs a due diligence on the ownership title and prepares the deed of sale transferring the title. Within a period of 3 months, the deed of sale or “Rogito” is signed before the notary. The buyer pays the balance of the purchase price, and after the signing of the deed, the notary records the transfer of title at the title office and pays the stamp duty and other purchase taxes on the buyer’s behalf.
Should you be unable to travel to Italy and sign the Deed of Sale in person, you may request Invest in Italy to perform this service for you via a Power of Attorney.
Key Professionals
Notaio: the Italian Notary Public who acts independently and does not represent the buyer or seller. He is someone the parties must hire and is a cross between a lawyer, notary public, title and escrow officer. His fees amount to a few thousand euro according to the property sale price, and are generally between 2% to 4%.
Geometra: a mix between a house inspector, contractor, land surveyor, and junior architect, this individual plays a significant role in the purchase of a property. Buyers should consult with a “geometra” to confirm the house matches the blueprints on file with the city, is up to code, and has all the proper permits in place. By law, a property cannot be sold if it is not in compliance with building and urban planning regulations. The “geometra” will also give a professional opinion on the soundness of the property and an estimate for any renovations.
Commond Questions When Buying a Property
1. How long does it take to buy a house in Italy?
While every situation varies, plan for a few weeks if you’re paying cash and home inspections go smoothly. More likely, transactions take several months, considering the time for a mortgage approval, if there are any discrepancies with the property title or housing permits, and the notary’s backlog of work.
2. Can I get a mortgage in Italy if I reside abroad?
In order to obtain a mortgage in Italy as a non-resident, brokers will consider your type of income, the amount, and the currency of your main source of income. The typical loan-to-value (LTV) is generally 60% fixed interest rate and a 25-year term. Invest in Italy also partners with licensed mortgage brokers who are specialized in granting mortgages to non-residents. Contact us for more details.
3. How much will I pay in property taxes?
Property taxes range between 0.4% – 0.76% of the fiscal value of the property (which is obtained from the Land Registry), unless you are retired in which case they are halved. If you move to Italy and transfer your residency, you don’t have to pay any property taxes on your primary residence!