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Property purchase process in Italy

The list below cover the main steps you will go through when buying a property in Italy:

1) THE FISCAL CODE
The first thing you need to get familiar with is the CODICE FISCALE.
If you are thinking to purchase a property in Italy, in fact as well as to open an Italian bank account (or to buy a car) you will need a CODICE FISCALE.
It is an identification code calculated on the basis of your surname, your names, the place of your birth and the date of your birth and which will be used any time you will need to deal with the Authorities.

2) OPENING AN ITALIAN BANK ACCOUNT
In the event of a purchase it is essential to open a bank account in Italy not only to transfer there the funds for the completion (as the final payment normally happens in Italian bankers drafts) but also to get the various utilities paid automatically.

3) FORMAL OFFER OF PURCHASE / PRELIMINARY AGREEMENT OF SALE (Compromesso)
When a costumer, after having visited some properties, decides to go ahead and to buy one of those, the negotiation starts with an Writing Offer ( the agent will prepare this document for you).
The practice to buy a house begins with the Writting Offer (in italy called Proposta di acquisto - preliminare di vendita) accompanied by a € deposit of the purchase price - who will remains up in the hands of the agent when the seller accepts the purchase proposal. After the seller signs your offer to purchase, and the buyer is aware that the seller accepts his proposal, the buyer re-sign the purchase offer ( 2nd buyer signature mean that you have read that the seller accepts your proposal) At this stage the deal is concluded, and the vendor undertakes not to sell the property to anybody else.
This letter is to protect the buyer from losing the opportunity to purchase ( must be registered - the costs are very low and the agent will take care of this.)

4) CADASTRAL CHECKS
Before the writting proposal for buy, the real estate agent will verify the title of the property, and will make all the necessary checks of the property. This would be useful to check that the property is regularly registered, that it belongs to the person who is undertaking to sell it and if there are loans on it. The real estate agent responsible for all phases of negotiation, and is the guarantor of the parties involved in the deal.

5) ROGITO (DEED OF PURCHASE)
The deed of purchase, final contract or "Atto notarile (Rogito)": Rogito is signed after the compromesso, and only when all the documentation are checked by the notary. It is signed by both parties, the balance is paid and the property is officially transferred. Following completion, the notary issues a certified copy of the deed of sale and registers the original document with the Land Registry (Catasto).The notary is the guarantor of the parties involved in the deal.

COSTS
Many properties in Italy are usually freehold. The total fees for buying a property are approximately 10 to 20 per cent of the purchase price. Among the costs are:

- Registration fee
- Land Registry fees/stamp duty
- Notary fees ( see bellow)
- Legal fees (for independent legal advice)
- Estate agent’s fee - see bellow
- Mortgage fee (if applicable)
- IVA (Italy’s equivalent of VAT), if buying from a company
- State tax, if buying from a private individual

LAND REGISTRY FEES/STAMP DUTY
The main cost in buying a property is represented by the Land Registration Tax (Italian registration/Stamp Tax). This is the main tax on real property, which is usually levied at 10% of the declared value of the property.

NOTARY FEES
A fee is paid to the Notary for the preparation of the Rogito. This fee varies from town to town and is on a scale related to the declared value of the property. It is approximately 2 - 5% of the value of the property. Real estate agents in Italy may have an agreement with a notary whereby all notary’s expenses can be incorporated into a ’standard’ fee and agreed with the buyer. We advise to check in advance.

IVA/ VALUE ADDED TAX (VAT)
This applies only to properties bought from a company or business and replaces the Land Registration Tax. It is 10% of the declared purchase price of the property (for non-luxury properties) and 20% (on luxury homes with a rating A1 in the property register). Usually it is possible apply 10% IVA. This has to be added to the purchase price, as it is not included in the price charged by the builder or developer. If you are a first time buyer and buy from a developer (who sells the property within 4 years from the date of completion) you pay a reduced rate of IVA at 4% and a fixed Registry Fee ( only for the first house residential in Italy).

RUNNING COST OF YOUR PROPERTY :

What are the purchase costs?

1) Agent’s commission
The amount of brokerage has to be agreed with the brokerage agency (the amount will be higher if the agent works with other agencies for selling the property, and lowest if both parties are costumer of the same agency). At that amount must be added VAT (I.V.A.) 20% and is payable at the signing of the preliminare contract .

2) The registry tax (Importa di Registro)
When a house is sold it has to be registered. The registry tax (imposta di registro) is 3 % on a first house and 7% on a second property. This applies for Italians too, not just foreigners. The registry tax is calculated on the value stated at the land-registry office which can be considerably less than the commercial value ( the real price at you buy the house)
3% of the property value in case of purchase of First Home residential from a Private Owner
7% of the property value in case of purchase of Second Home from a Private Owner

3) Mortgage tax(Imposta ipotecaria)
168 €
or
2% of the value in case you buy a Second Homes from a Private Owner

4)Cadastre Fees(imposta Catastale)
168 €
or
1% of the value in case you buy a Second Homes from a Private Owner

5)VAT
You will be liable for either VAT or registration tax. VAT is applicable on purchases from a company, whereas the registration tax applies to private purchases

6) Notary Fees
There can be a slight variation in price between notaries, but not much. Usualy is better to ask to the agency to choose a Notary. The higher the price of a property, the higher the notary fees are likely to be, all taxes and notary fee are paid to the notary who will pay taxes above ( registry, cadastre, mortgage ecc).

Annual Taxes.
The “ICI” (Imposta Comunale sugli Immobili) is an annual council tax determined by the size and quality of the property. It is not very high, about 100 - 400 euros, about 0.5 - 0.6% of the Declared Value, and established by the council (payable once or twice a year), not payable for first home residential ( should not be a luxury home).

Refuse/ Garbage Tax.
Small, about 100-300 euro.

Utilities.
Electricity, water, gas/oil etc for heating, phone, a small fixed fee every two months, plus payment for utilities used.

Condominium expenses.
If you buy a property which is part of a group of properties which share some communal areas - gardens, driveway, swimming pool, tennis court etc. then you will be required to pay condominium expenses. They vary as to the type and size of communal areas on the property.