Buying Property in Italy
Every year, hundreds of expats pack up their things and head off to get a slice of la dolce vita.
But even if only they intend to stay for a while, expats often find that buying property in Italy is more advantageous than renting. Rental properties in cities like Rome and Milan go at a premium and even the smallest, one-bedroom apartments are expensive to rent.
But before they take the plunge, expats be aware that the Italian property market can be confusing and complicated. It’s deeply set in the cultural ways of the country itself and different from what expats may be familiar with.
For starters, expats wishing to buy a home must either be EU nationals or have a valid residence permit if they wish to buy property in Italy. If these conditions are not met, the law of reciprocity states that expats can still purchase a house in Italy if their home country allows Italian citizens to buy property there too.
Preparing to buy property in Italy
The first step to buying property in Italy is to engage a lawyer in one's home country. Some expats may brush this off as an unnecessary caution, but it's important to engage the services of some whose sole job is to represent the interests of the buyer. Try to find someone who is bilingual and familiar with both Italian and international property law.
It’s also important to have a clear picture of the property you want before beginning the search. Expats should ask themselves, ‘Am I looking for a holiday rental or a permanent home?’ ‘Would I be happy with something that needs renovating or do I want a finished property?’ Knowing the answer to these questions will make it easier to sift through the often hundreds of listings without becoming overwhelmed.
Finding property in Italy
Various websites have information on the property market in every region. This general overview is worth a look for getting a general feel of the climate and average property prices, as well as any taxes and/or processes that are unique to that region.
Once expats have a general idea of the market in their chosen region, they can begin the search for a new home on reputable property websites. However, not every property in the chose area will be listed online. The majority of real estate enquiries, especially in regional Italy, are still done in person.
The best way to find properties is to get in contact with at least three or four local real estate agents. Expats should describe what they're looking for in detail and ask them to compile a shortlist of properties. Then expats should travel to Italy and personally inspect them.
Check online to ensure the real estate agent is registered with the Chamber of Commerce (Camera di Commercio, Industria, Artigianato ed Agricoltura) before contacting them.
The purchasing process
Once they've found the perfect property in Italy, expats can get down to the nitty-gritty of buying it.
Expats will need to open an Italian bank account, which must be done in person in Italy. An Italian tax code number (codice fiscale) will also be needed, which can be obtained at at the Italian consulate in one's home country or through an Italian tax office. This can take up to three weeks.
The entire purchasing process is long and quite complicated. The hired estate agent and lawyer will help expats through it, but here’s a quick rundown:
Make a written offer (proposta d'acquisto irrevocabile). This document is supplied by the estate agent. Once signed by both parties, it locks in the price of the property. Expats can pay a 10 percent deposit at this stage as a sign of good faith, but it’s not compulsory.
Engage a geometra. A geometra is a surveyor and architect rolled into one. They make sure the property is up to code. Expats can hire one themselves or ask their estate agent to do it for them.
Commission a legal check of the property and a credit check of the seller to make sure there are no title disputes or mortgages. This can be done by the estate agent, the lawyer or the geometra.
Sign the preliminary contract (compromesso). This legally binding contract is drawn up by the estate agent and commits both parties to the transfer of ownership on the terms and conditions agreed to. At this stage, a deposit of at least 10 percent must be made.
Commission a final conveyance and legal check. This must be done by a licensed Italian notary (notaio). The estate agent can recommend one.
Sign the deeds of sale (rogito). This is done before a notary with a translator present if one doesn’t speak Italian. At this point the remaining amount due for the sale must be paid to the seller.
Ensure the notary registers the sale at the local land registry (ufficio dell' agenzia del territorio).
Financing property in Italy
Expats can apply for a mortgage in Italy or from a lender in their home country that is registered to lend mortgage funds in Italy. Anyone can apply for a mortgage in Italy if they have enough capital, but that doesn’t necessarily mean they’ll be granted one.
Before applying, expats should remember that they’ll need more than enough to just cover the cost of the property. The buyer is responsible for paying the notary, estate agent and the geometra, as well as any legal representatives. The buyer also picks up all sale and transfer of property fees.
The mortgage structure in Italy is very different to what expats may be used to, so while the base rate may seem low (often as low as two percent) other charges will apply. Set-up fees are higher, there’s less competition and banks are unlikely to lend expats the whole property value. For these reasons and more, it’s a very good idea to get an independent financial adviser on board before you apply.