There are countless opportunities to buy valuable, splendid real estate in Italy. Furthermore, purchasing property in Italy is safe, secure, and rewarding, because real estate transactions are straightforward and reliable. This said, how does it all work?
Knowing one’s way around the rules and regulations is key, so let’s see what the main steps and procedures of buying and selling property in Italy are.
The declining pandemic tunnel has rekindled many a foreigner’s passion for Italy. The spotlight on quality Italian real estate assets is blazing, and “living the beauty” is a win-win slogan: all those lured by Italy’s many marvels are now looking to actually buy properties in this wonderful, sun-kissed country.
Beauty, one of the country’s greatest assets, is one of the sparks that ignite desire. And rightly so, seeing as Italy boasts 58 Unesco-listed World Heritage Sites… it’s a world record!
Italian real estate assets
Charm, allure, and a soul-satisfying lifestyle are not all there is to it. What makes Italy so appealing to a savvy foreign investor’s eye are the opportunities it offers, as regards prestigious Italian real estate assets, for instance.
Wondering what’s for sale? 13 thousand buildings, including castles, palaces and luxury mansions, both for residential and non-residential use, and worth almost 1,500 billion euros in total.
Who owns them now? Well, banks, insurance companies, and real estate funds, plus magnates and tycoons of course. Available for sale, and extremely attractive to entrepreneurs and business-oriented executives that are able to appreciate their (astonishing!) financial worth, these properties also represent part of the Italian heritage. Hence, they hold a timeless social and environmental value.
All in all, Italy’s prestigious real estate assets are an unrivalled investment opportunity for all international investors, from solo investors and SMEs to corporations.
The Italian real estate market is now driven by a strong, positive wind: growth is underway. Victoria House’s experts say the whole field displays a distinctively exuberant attitude, and shows local and international investments on the rise. Plus, banks are revealing an increasingly cooperative attitude: this is one of the reasons why transactions in the residential field are deemed to go quickly back to the pre-Covid period levels.
Growth expectations are so promising that the market has held its head high notwithstanding the FED’s recent announcement on interest rates. Though the market was hit by the news that these will probably increase twice between now and 2023, fear of the so-called “black swan” (a sudden event capable of causing the markets to collapse) can’t tame the ever-increasing positive assurance in the future.
Buy real estate in Italy
Purchasing property in Italy is not a piece of cake, but the process in itself, though somewhat complex and at times hard to
understand, is highly reliable and extremely secure.
All buyers, including foreign investors unfamiliar with the local red tape, can certainly feel safe. This is partly thanks to the notary, one of the leading players in real estate transactions.
In Italy, notaries are highly qualified legal professionals who act as public officers. Namely the notary represents the Italian State in the legal formalization of real estate sales, and as such has extensive legal responsibilities which comprise ensuring that all documents are authentic, perfectly drafted and valid.
Pursuant to Italian law, the notary is required to protect both parties by overseeing the drawing up of the transaction documents and guaranteeing that the purchase of the property is carried out in perfect compliance with all legal provisions.
The notary drafts the sales contract and checks all that precedes the final deed, including the legal encumbrances, urban planning, tax, land registry etc.
Italian law maintains that it is up to the buyer to select the notary who will handle the final deed. Yet, foreign buyers should keep in mind that the notary is not a lawyer who acts in the interest of a client, but a neutral professional figure who acts in the name of the law, placing neutrality and full legal compliance above all.
Find out more about how Italian notaries work on the official website of the National Council of Notaries, that provides full exhaustive details on the roles, rights and obligations of the notary in real estate transactions.
Finding your ideal property: how to make a good deal One can definitely try to source the perfect property to buy on one’s own, but everything is easier, less stressful and much quicker when you employ a professional Italian Real Estate Agent. An agent’s knowledge of the local real estate scenario, properties for sale and technical and legal regulations are vital assets when one chooses to invest in a beautiful, but often perplexing, country like Italy.
The important thing is to select the right Real Estate Agent, i.e. someone trustworthy and dependable. A good real estate agent must be capable of guiding the buyer through all steps of property sourcing and purchasing, from finding the right property and ascertaining the relevant documents are in order, to negotiating the price and drafting the preliminary purchase proposal, to finally drawing up the final deed and signing it before a notary.
Make sure you find a real estate agent with a good track record and strong references, and don’t let him or her get away!
He/she could also provide advice in the post-sales phase, as regards utilities for instance: activating contracts for water, electricity, gas supply, wifi and so on can be challenging in a foreign country.
A proficient, resourceful, honest real estate agent never leaves a client alone after the final deed is signed: he/she is always available, ready to escort the client to his/her perfectly equipped home safely, soundly and…without a headache!
Step one: what to do once you’ve found your dream property
Once you’re sure you’ve found your dream Italian home it’s time to step forward, start negotiating with the vendor and make a first offer. Before deciding the amount, we recommend carrying out a thorough inspection of the property’s conditions.
You can easily get this done with the help of a dependable professional surveyor, architect or engineer. Either of these, or a team of the three on some occasions, will be able to inform you on the general conditions, let you know whether there is renovation work to be done or suggest possible improvements.
Detailed floor plans and cadastral surveys are two other important items you will want to have checked by your consultants, perhaps alongside your trusted real estate agent: these documents will allow you to have an idea of the property’s conditions as concerns urban planning and building.
Your real estate agent can also help by providing an itemized spreadsheet with a first estimate of all expenses (even the “hidden” ones) that need to be considered in addition to those due for the actual purchase of the property. These will comprise taxes, notary fees, costs for the mandatory translations of the final documents – which you will necessarily need to read through in your mother language – and, naturally, the commissions due to the real estate agent.
Once this is done, you will have a clearer idea about the whole scenario, and be ready to face the negotiation.
If your heart is set on the property you’ve found, and you want to make sure you secure it before someone else does, you can
formalize the offer presenting a Purchase Proposal. Here too, your real estate agent will be able to guide you through the necessary steps, helping you draft a formal written document.
This will need to list essential information, including:
- The price you are willing to pay.
- Your desired terms of payment.
- The amount of the deposit to be paid (provided the proposal is accepted).
- The proposed dates for signing the final contract. • Other conditions: if you have requested a mortgage loan, for instance, it must be specified in the offer.
This document must necessarily comprise all relevant details and be flawlessly written out because, once signed by the buyer and countersigned by the vendor, it is legally binding. The violation of a properly drafted proposal, by either of the two parties, leads to important consequences.
The most common are:
- The loss of the deposit, if it is the buyer who violates the proposal.
- The refund of twice the deposit amount if the vendor decides to withdraw.
Prior to signing of the final deed that validates the definitive transfer of ownership, Italian real estate transactions allow for another step that many foreigners may not be familiar with: the Compromesso or Preliminary Purchase Agreement.
Step two: the Compromesso or Preliminary Purchase Agreement.
While the Purchase Proposal, albeit binding from a legal point of view, is but a first expression of your desire to buy your dream home in Italy, the Compromesso (or Preliminary Contract) testifies your actual commitment, maintaining that you are ready to complete the purchase, pay the due deposit and settle the balance on a specified future date.
Obviously, the same also applies to the vendor, who commits to respecting the agreement as detailed.
As previously noted, should one of the two parties withdraw from the deal for reasons not provided for by the contract, the first immediate consequence is the loss of the deposit. A buyer who backs out will lose the whole amount paid. A vendor who quits a deal will have to refund twice the deposit amount.
Needless to say, the Compromesso document is even more comprehensive and circumstantiated than the Purchase Proposal. Specifically, it will have to record:
- All aspects relating to the property (data of the owners, the origin of the real estate, any inheritances, cadastral data, the presence or absence of pending legal encumbrances, active and passive easements, etc.).
- The agreed sale price,
- The amount to be paid as a deposit (or to be added, if a Proposal has already been signed) upon formalization of the Compromesso (an amount that generally ranges between 10% and 30% of the total price).
- The date within which the sale is to be finalized.
- Fees due to the real estate agency
- The payment methods.
Contracts of this kind are complex documents, and must be impeccably drafted and faultless. It is advisable to seek the help of an experienced real estate agent or an Italian lawyer, who will carefully review all relevant documents prior to drawing up the contract, and liaise with the notary who will take care of preparing the final deed.
So, our best advice is… don’t be hasty! Buying property is a meaningful and consequential step, so make sure you take all the time you need to understand every detail of the operation. This will allow you to handle the lot better, and enjoy a serene, confident, and auspicious buying process.
Step three: the sale and purchase agreement, also known as “the deed”.
The big day is here! Finally! Signing the Final Purchase Agreement, i.e. the final deed for your new property, is by all purposes a public act, and as such it is executed before the notary in charge.
The notary personally draws up the deed, after having collected the buyer’s and vendor’s personal information, plus all previously produced legal documents. Everything must be perfectly in order before proceeding with the signing of the final deed, so before drafting it the notary conducts a variety of other inspections aimed at ascertaining the legal, tax and mortgage situation of the asset in question.
Finally, the notary is also in charge of collecting the taxes due for the transaction, acting, as a public officer, in the name and on behalf of the Italian state.
By law, the final deed is read out loud, to ensure that all parties fully understand it. If the buyer’s or vendor’s native language is not Italian, the deed will be translated into his/her mother tongue and an interpreter will be present on the day and read the text aloud.
Notaries generally have interpreters who cooperate with them in these cases, however it is also quite simple to source one via your consulate or with the help of your real estate agent. Once the documents are signed, the transaction is finalized and the notary must register the deed within 21 days. The registration will confirm that the property has been sold and has a new owner. The new proprietor’s name will henceforth be stated in all official documents.
What if one cannot, for some reason, be present on the day of signing the final deed? No need to panic! In this case, one can make use of a special power of attorney, authorizing a person
one trusts to be present before the notary, and sign on their behalf. It actually happens quite frequently, and if you are a foreign buyer who has Italian friends or dependable contacts with people who perfectly understand the Italian language well, you could easily rely on them. It’s a smart way to avoid paying the interpreter’s and translator’s fees.
The role of the Real Estate Agent.
A good real estate agent is a key figure in finding a property in
Italy: a reliable professional who understands the type of property you want. There are big differences in the way Italian agents work compared to those of other countries.
The most relevant is the fact that in Italy, the agent is accountable both to the buyer and to the vendor, and that both parties pay real estate agent fees. These, generally, amount to approximately 3% of the purchase price plus VAT (22%), and are usually due as soon as the purchase offer is accepted. However, one can negotiate both the amount and payment deadline with the agent, and most will accept payment upon finalization of the transaction.
A good Italian agent always operates ethically, in full compliance with standing legislation. How to find a dependable, trustworthy professional that practices in the area you’re focusing on? Perhaps asking for advice: your friends who recently bought a house will probably be able to help! Always remember that by law all Italian real estate agents must be registered with the local chamber of commerce, and belong to one of the recognized official Italian real estate associations, such as the Federation of Professional Real Estate Agents (FIAIP) or the Federation of Mediators and Agents (FIMA).
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