Buying Property in Italy
Every year, hundreds of expats pack up their things and head off to get a slice of la dolce vita - the good life.
But even if they intend to stay for a while, expats often find that buying property in Italy can be 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 should 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 as well.
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 an expert to represent an expat's interests. Ideally, this person should be able to speak Italian and should be familiar with both Italian and international property law.
Finding property in Italy
Various websites have information on the property market in every region. This general overview is worth researching to develop an understanding of the property market, 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 contact 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. Prospective buyers should then travel to Italy and personally inspect them.
Expats should also ensure that any estate agencies dealt with are registered with the Italian Chamber of Commerce (Camera di Commercio, Industria, Artigianato ed Agricoltura).
Purchasing property in Italy
Once they've found the perfect property in Italy, expats can get down to the nitty-gritty of buying it.
Buyers 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 from the Italian consulate in one's home country or through an Italian tax office.
The entire purchasing process is long and quite complicated. Here is a summary of the steps needed:
Submit 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 typically pay a 10 percent deposit at this stage as a sign of good faith, but it’s not compulsory.
Engage the services of a geometra. A geometra is a surveyor and architect rolled into one. They ensure that the property meets housing codes. 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 ensure that there are no title disputes or mortgages. This can be done by an estate agent, 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 of the purchasing price 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 that they’ll be granted one.
Before applying, expats should note that they’ll need more than enough to 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 pays for 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, expats should secure the services of an independent financial adviser.