Whether you’ve personally invested in property in Italy and are contemplating its fate upon your passing, or if you find yourself connected to a property your relatives owned in Italy and share an interest in understanding Italian inheritance laws, this article aims to shed light on the intricacies of these laws. We will explore the implications for foreign property owners and provide guidance on the steps to take should you find yourself inheriting Italian property.
What happens to the property of a deceased person?
In Italy, the destiny of a deceased person’s property is shaped by two key avenues: legal inheritance or testamentary provisions. Legal inheritance, governed by Italian succession laws, guarantees that property is distributed in determined fractions to the living family members. This is legally mandated according to the degree of kinship and the number of heirs.
On the other hand, when writing a will, individuals have the freedom to decide what happens to their property. However, it’s essential to note that in Italy a will cannot exclude the minimum share of inheritance (“quota legittima”) due to legitimate heirs by law. For instance, if there is a spouse and a single child, one-third of the inheritance goes to the wife, one-third to the child, and the remaining third is part of the available share (“quota disponibile”) that the testator can allocate to any chosen beneficiary. Even without a spouse and with a single child, half of the inheritance belongs to the child, and the rest falls under the available share. Despite this testamentary freedom, the “quota di legittima” serves as a protective measure, ensuring a delicate balance between autonomy and the preservation of family rights.
International Property Succession
How do Italian inheritance laws affect a foreigner who owns property in Italy? Unlike some countries where the property inheritance laws may defer to the citizenship of the deceased owner, Italy adopts an approach that subjects all property inheritances within its borders to the provisions of Italian law. This means that regardless of the individual’s nationality, the rules and regulations established by the Italian legal system will govern the transfer of property ownership and assets.
What to do after inheriting the property
If you instead inherit an Italian property, or discover that a property in Italy was left to members of your family, you will want to first inform yourself of inheritance taxes (below), the condition of the property, and any debts associated with it.
After reviewing the associated costs, if you choose to accept or claim the property, it is essential to register it in your name through a statement of succession (“dichiarazione di successione”) within 12 months of the original owner’s death. In the event that you inherit a home and decide to claim it after this timeframe has elapsed, you will incur fees established by the Italian Tax Revenue Agency (“Agenzia delle Entrate”). Subsequently, in both scenarios, you are required to submit this document, along with the ones listed below, to the Tax Revenue Agency:
– Original death certificate of the deceased
– “Certificato di famiglia” for both the deceased and all of the heirs
– Documents relating to the home: Visura Catastale, Deed to home
– A certified copy of the will if it is present
– Your own Italian Tax Code (“Codice Fiscale”)
Italian real estate lawyers can help you in this process, from the collection of the documents to determining exactly what the inheritance quotes would be on a family property. This entire process would be followed alongside an Italian Public Notary, the only Italian official recognized to work with inheritances in Italy.
Inheritance taxes
In the realm of inheriting property in Italy, one must also navigate the intricacies of associated taxes. These taxes are calculated based on the cadastral value, known as “valore catastale,” of the property in question. The inheritance tax, or “Imposta di successione,” is a crucial consideration in this process.
For properties inherited by a spouse, children, parents, or grandchildren, the inheritance tax stands at 4% of the inheritance value, but only for the portion exceeding 1,000,000 euros. In the case of inheritance by siblings, the tax rate increases to 6%, applied solely to the inheritance value surpassing 100,000 euros. Meanwhile, for other relatives up to the 4th degree, the inheritance tax amounts to 6% of the inheritance value. Properties inherited by individuals without the aforementioned familial ties incur a higher rate, set at 8% of the inheritance.
Additionally, the succession process entails the payment of transcription and cadastral taxes. The transcription tax (“imposta ipotecaria”) is due for transcription formalities at the offices of the Revenue Agency, calculated at 2% of the value of property shares (based on cadastral value). Simultaneously, the cadastral tax is levied at 1% of the value of property shares (calculated according to the cadastral value). It is worth noting that there are also taxes associated with the property once you acquire it, which we have already written about in previous articles here and here.
If you want to sell the property
Perhaps instead you would like to accept an inherited property to then sell it. In this case, there are a number of other steps you must take in order to effectively place it on the market.
You will first need a real estate agent or surveyor (“geometra”) to determine the value. If you do not reside in Italy, there are also a number of documents you will need to provide, such as a copy of your passport, and certified translations of anything not issued in Italian. Another crucial step is to acquire an Energy Performance certificate from an architect or energy engineer. This will need to be provided for the final closing.
It would also be useful to involve a lawyer in the process, which is where Italian Real Estate Lawyers can help. We have written on this process and are well-equipped to assist to ensure a safe and smooth process. We can also act as power of attorney if you cannot physically be present in Italy.
Conclusion
Inheriting a property in Italy comes with many fine details you must be aware of. Whether you are inheriting a property in Italy, or have recently purchased a home and are curious how it will one day be regulated, there are a number of factors to consider. At Italian Real Estate Lawyers, we’re here to assist with every step of the process. You can contact us at info@italianrealestatelawyers.com.
If you’re interested in purchasing property in Italy, it’s important to understand all the steps of the process. Once you have selected your dream home, two crucial documents come into play to finalize the deal. The first is known as the preliminary agreement, while the second is the final deed of sale, which officially transfers ownership. We have previously discussed both the preliminary agreement and the final deed of sale in more depth in past articles. The purpose of this article is to briefly define what the preliminary and deed are, and how to properly register or transcribe them.
What is a Preliminary Agreement?
The “contratto preliminare di vendita,” or preliminary agreement, is a pivotal element in the Italian real estate market. This private agreement outlines essential details of the property sale, including the full price and the specific terms and clauses governing the deal. It serves as a legally binding private contract between the prospective buyer, known as the “promissario acquirente,” and the seller, known as the “promittente venditore.” Both parties commit to finalizing the sale at a later date, contingent upon certain conditions being met.
The preliminary agreement carries genuine and binding effects, obligating the parties to move forward with the eventual sale. This stage can also include clauses related to property inspections, further ensuring the safety and satisfaction of the buyer.
However, the preliminary agreement does not transfer ownership of the property; instead, it secures the commitment to sign the final contract. Following the preliminary agreement, the buyer typically provides a deposit, often around 10% of the purchase price, although there is no rule defining minimum and maximum deposit amounts, as a sign of their commitment.
Does the Preliminary Agreement Get Registered or Transcribed?
Once both parties have signed the preliminary agreement, it holds legal significance and is fully binding. However, there is an administrative requirement to register the preliminary agreement with the Italian Revenue Agency (“Agenzia delle Entrate”). Registering the preliminary makes it known to the Revenue Agency that two people have made a preliminary agreement, allowing further tracing of the contract and keeping it in line with the fiscal norms.
While the preliminary agreement retains its legal validity even without registration, it remains subject to fiscal obligations. The associated registration costs comprise a fixed registration tax of €200 and a stamp duty of €16 for every four pages of the document. If the parties agree to payments such as a deposit, a proportional registration tax may also be applicable, usually at a rate of 0.50% of the deposit amount, or 3% if it is an advance payment.
The preliminary agreement can furthermore be transcribed into the public notarial registry through the intervention of a public notary. While transcription of the preliminary agreement is not mandatory, it offers significant benefits, ensuring the agreement’s priority over subsequent transactions involving the property. However, the effects of transcription cease if the final contract is not transcribed within one year from the agreed-upon date or within three years from the transcription itself.
It’s important to understand the distinction when deciding to register or transcribe the preliminary agreement. In the unfortunate scenario of a dishonest seller, if you have a preliminary agreement that has only been registered, you can only seek compensation, without challenging the deed of sale they have signed with someone else. On the other hand, if you have a transcribed preliminary agreement and the seller, before finalizing the deal with you, sells the property to another party, you have the legal means to challenge the deed of sale and potentially acquire the property.
Registering and Transcribing the Final Deed
The ultimate step in the Italian property buying journey is the signing and transcribing of the final deed of sale, known as the “rogito notarile.” This document officially transfers ownership from the seller to the buyer and is a mandatory requirement, prepared by a public notary.
The final deed of sale is always registered and transcribed, leaving no room for exceptions. Registration is done through the Italian Revenue Agency, while transcription involves public notarial records. Expect to incur notarial fees, which typically consist of a registration tax, amounting to 2% of the cadastral value (for primary residences) or 9% (for secondary residences), as well as fixed cadastral and mortgage taxes, usually around €50.
By law, the final deed must be signed by both the buyer and the seller. In cases where one party cannot be physically present, they can delegate power of attorney to a trusted representative, with the presence of a legal interpreter if language barriers exist.
Conclusion
This article has sought to define and differentiate the preliminary contract and final deed of sale as well as emphasize the importance of registering or transcribing them. Buying a home can be overwhelming, especially if done in a foreign country. That’s why we’re here to help. Contact us at info@italianrealestatelawyers.com, and we’d be happy to assist!
In Italy there are many cost-effective alternatives to the standard real estate process. Two particularly popular options are the 1 euro that gained prominence in Italy a few years ago, and the more familiar model of auctions. What exactly do these two alternatives entail and which one suits your needs best? In this article, we break down each option, outlining their advantages and disadvantages.
1 euro homes
We’ve previously provided extensive coverage of the 1 euro home phenomenon, available in our articles here and here. To summarize, these properties generally have a price tag of just 1 euro—or bidding will begin at 1 euro—although certain conditions, such as property renovation and other obligations, apply. The clearest advantage of this arrangement is the incredibly low cost of the properties. Additionally, most of these properties are located in rural areas with small villages, making them an excellent choice for those seeking a quieter life away from the chaos of the cities.
For example, at the time of this article (2023), the Sicilian town of Pettineo has an initiative to sell 1 euro homes for the purpose of getting people to invest in property there. Obligations include preparing and presenting a renovation plan within 3 months of signing the contract, to finish the renovations within 3 years, and to come up with a surety policy.
Despite the attractive low cost, there are quite a few stipulations to consider when confronting the purchase of a 1 euro home, as seen in the above example. Often, the renovation needs to be completed within a set timeframe, and the project must be approved before you can purchase the property. Along with the fees for renovation, there are notary fees, costs to set up utilities, registration costs, and even an insurance payment to the municipality, which can range from €1,000 and €5,000. You might also be required to visit the property in person before the purchase and establish residency there. Some properties may also have restrictions on resale. Finally, each town can impose its own unique requirements. For example, the initiative in Presicce, Puglia, limited applications to European citizens. For these reasons, 1 euro homes are generally best suited for those who already live in Italy or plan to. If you are not prepared for the extensive renovation work or are unwilling to comply with municipality guidelines, purchasing a property at auction might be a more suitable option.
Homes at Auction
Another appealing and cost-effective option for purchasing a house in Italy is to go through an auction. Like 1 euro homes, judicial auctions provide a more affordable scheme to go through the home-buying process. The Italian courts conduct an examination of the property and then determine a base price. There is also a minimum price (generally 25% below the base), at which interested buyers can begin bidding. Bidding will occur at a tribunal before a judge, and about 10 days before the determined bidding date, all interested parties will pay a deposit by cashier’s cheque. Generally, the deposit put in at auction is 10% of the minimum price. At the auction, the person who offers the highest amount is considered the successful bidder. Those who weren’t successful receive their deposits back on the same day. He or she then has a time period (usually around 120 days after the auction) to pay the full balance minus the deposit. If this balance is not paid on time, the property will return to auction, and the successful bidder will lose the deposit. This does not mean you can’t use a mortgage for a home bought at auction, but if the loan does not cover the full price, you will still need to cover the remainder. Once this balance is paid, the judge will officially transfer ownership of the property.
Advantages of purchasing properties through auctions include avoiding the need to pay for third parties such as realtors or notaries. The entire process is also conducted through the court system, ensuring maximum transparency. Along with this, all transcriptions and registrations are typically cancelled.
As mentioned earlier, for 1 euro homes, it’s usually necessary to be in Italy, but auctions offer more flexibility. With IREL’s services, for instance, we can act as power of attorney to represent you throughout the entire process, even if you’re not physically present.
It’s important to note that properties bought at auction must be paid off within a certain time frame, or there can be a risk of losing the home. Something else important to be aware of is that properties at auction are often in the midst of a legal process involving debts and potential structural issues due to foreclosure. Therefore, it is advisable to have an attorney who is well versed in Italian real estate, particularly for purchasing properties at auction.
While 1 euro schemes and homes at auction are great options for affordable properties, this does not mean you can’t find cheap homes on the regular market. House prices depend greatly on the region, and even the individual province, you’re looking at. For instance, as of 2022 Calabria was ranked the region with the cheapest homes to buy. The average price here is 852 euros/m2, followed closely by the regions of Molise and Sicily as next cheapest. If you look carefully, you can find properties in the 10k to 60k range in nearly every region, though, some perhaps needing renovation, others not.
Cost comparison
We have examined the general process of how 1 euro homes and auctions work, how they help you save money in your home-buying venture, and some important things to be aware of. But what is the cost comparison? Which is the cheaper option? There is no simple answer to this, given the variables outlined above. The most important first step is to determine whether you can be in Italy or not for the process, if you’d prefer to live in the country or city, and how much renovation work you’re comfortable investing in.
For 1 euro homes, plan to spend at least €30,000, considering the renovation work, security deposit, and other additional fees.
Similarly, buying a house at auction can save you significant money, even as much as 60% of the market value.
Conclusion
There are many advantages to purchasing a 1 euro home or a home at auction in Italy. Both involve significant savings but, as mentioned, there are also many conditions and requirements to be aware of. Ultimately, it is up to you to decide which method best fits your budget and what you’re comfortable with. We’re also here to assist and would be happy to help! Feel free to contact us at info@italianrealestatelawyers.com.
If you’re thinking of moving to Italy, you might not know where to begin in the process. How can one legally live there? Where is the best place to live? In this article, we outline the most important things to know when it comes to relocating to the Bel Paese.
- Initial research
When embarking on the journey of relocating to Italy, it’s crucial to begin by defining your objectives. There is no one-size-fits-all approach to establishing a new life in this beautiful European country. Your objectives should encompass both career aspirations (such as employment or education), your preferred place of residence, and ensuring alignment with your financial resources.
Location
Italy has numerous enchanting destinations to offer, from the hills of Tuscany to the mountainous areas in regions such as Trentino-Alto Adige, to the bustle of cities like Milan and Rome. While Florence and Rome are captivating places, it’s essential to consider that property prices in these cities can be quite steep due to their immense tourist appeal. For this reason, it is worth exploring less touristic cities, such as Turin, or even Palermo, the capital of Sicily.
However, don’t discount rural locations either. Italy offers numerous picturesque countryside vistas beyond the well-known Tuscany, which remains one of the country’s most expensive property markets, commanding an average of €2,344 per square meter, according to the 2022 Idealista Price Index. The southern regions, including Basilicata and Puglia, boast some of the most beautiful landscapes Italy has to offer. Additionally, a region like Emilia-Romagna offers the best of both worlds, with charming villages and enchanting countryside. Rest assured, wherever you choose, you will find plenty of good food and welcoming communities.
After deciding where to live based on your work, studies, budget, and/or personal preferences, it’s time to search for a dream apartment or home. To safeguard against potential scams, consider enlisting the services of a trusted company to help in your search, such as Italian Real Estate Lawyers. We are dedicated to helping you find the best accommodation that aligns with your goals and lifestyle in Italy. Our support encompasses every step of the process, commencing with the initial property search, conducting property due diligence, drafting offers, and guiding you through the intricacies of the final deed of sale. We specialize in assisting clients making overseas purchases—an invaluable resource when physical presence is not feasible.
Budget
Another crucial aspect to address from the start is your budget. Will you be working in or retiring to Italy, and what does your income situation look like? A clear understanding of your financial means, both in terms of your current resources and your anticipated income in Italy, along with the overall cost of living in your desired region, will greatly facilitate your planning process. Generally, the cost of living in Italy is considerably lower than the U.S., around 30%-40%. This is heavily dependent on where you choose to live, your income, and your lifestyle. Italian salaries are also generally lower than those in the U.S., although this can fluctuate significantly based on your industry and the specific region in Italy where you are employed.
- The legalities
The next question to consider is how you can legally move to Italy. Luckily, there are a number of visa options available for non-EU citizens. If you are an EU citizen, you won’t need a visa. Additionally, certain individuals might even qualify for Italian citizenship by descent, allowing them to complete their application while in Italy. For all planning to relocate, it’s important to understand any work-related stipulations associated with your visa category. For example, those on a student visa are limited to 20 hours per week, while those on an elective residence visa are prohibited from employment and must rely solely on passive income sources.
Visas
For non-EU citizens, there are many visa options, depending on your goals. These include:
- Study visa
- Work visa
- Family reunification visa
- Self-employment visa
- Elective residence visa
- Investor visa
- Research visa
Be sure to look on your local consulate’s website for the particular requirements for the visa you intend to apply for. It’s advisable to schedule an appointment with your consulate well in advance, as they may experience significant backlog periods. Additionally, ensure that your passport contains a minimum of three blank pages and is not in need of renewal. Gather all your required documents, and if necessary, have them professionally translated. It’s recommended to commence the preparation of these essential materials at least three months before your intended application date.
Residence permit (permesso di soggiorno)
Regardless of the type of visa you obtain, you will need to apply for your residence permit, or permesso di soggiorno, within eight days of arrival in Italy.
The permesso di soggiorno application is referred to as a “kit” and can be found at most Italian Post Offices. Typically, you will need to include much of the same documentation as originally required for your visa application, so make sure to have both the originals and photocopies with you.
The submission of these documents varies depending on your specific type of residence permit, which is linked to your visa, and your location within Italy. In most instances, you will submit the application kit along with your documents at the local Post Office (where you obtained the application kit). They will then provide you with an appointment at the Questura (Police Office for Immigration) for a later date, which may be several months away, a common occurrence. It’s important to note that you should only provide copies of your documents to the Poste, not the originals. At the Questura appointment, you should bring your original documents and copies. A good rule of thumb is to bring more documents than you think you need, as the requirements can change depending on your specific visa type and the location of your application.
For EU citizens planning to stay in Italy for longer than three months, it’s also necessary to declare residency at the local police station.
- Things you need in Italy
There are a number of practical items that will be essential for day-to-day life in Italy, and some of these may be required for your upcoming Questura appointment. Therefore, it’s advisable to obtain these items as soon as possible upon your arrival.
Tax code (codice fiscale)
Another important thing to get is your tax code, or codice fiscale. Unlike the American equivalent, the Social Security Number, the codice fiscale is widely used for various purposes in Italy, including work and housing contracts, opening a bank account, and even obtaining an Italian phone number.
Obtaining the codice fiscale is relatively straightforward. Visit the local Tax Revenue Agency (Agenzia delle Entrate) with your passport, proof of address, visa, and permesso di soggiorno. Keep in mind that they may request additional documentation, so it’s a good idea to check their specific requirements online before your visit.
Health insurance
One valuable benefit you should make use of is Italy’s national healthcare system. You can enroll in it at the local regional Health Department (Azienda Sanitaria Locale, o ASL). To complete the registration, you will need to provide your passport, permesso di soggiorno, tax code, and pay a small fee. It’s important to note that you must also be a registered resident in Italy, and you might be asked to provide a copy of your residential declaration from the Anagrafe (records) office of the town where you reside.
If you are an EU citizen and have health insurance in your home country, you will be covered in Italy.
Italian SIM
It is also recommended that you get an Italian SIM card. There are numerous phone companies to choose from, and monthly prices typically offer generous data allowances at affordable rates (for example, €14 for 70 GB/month). This will facilitate your communication needs during your stay.
Italian bank account
Something you might also want to consider is opening an Italian bank account. The necessity for this will depend on your employment situation and the source of your income. For instance, if you’re a student, it might not be a mandatory step. The specific documents required for opening a bank account can vary based on several factors, including whether you are an EU or non-EU citizen, your status as a registered resident of Italy, and other individual circumstances.
Driving license
Obtaining a Driver’s License is optional and is most likely not necessary if you’re planning to live in a city. If you are an EU citizen and have a driving license from an EU country, it is valid in Italy. If you are outside the EU, it depends. There are some cases in which you can exchange your license for an Italian one. In other cases, including for Americans, you can drive on a touristic International Permit (that accompanies your valid driving license) for one year. After that time, you must apply for an Italian driving license, which includes passing a comprehensive theory exam in Italian as well as a driving test. Keep in mind too that in Italy, as in the rest of Europe, manual cars are most common, but automatic transmission vehicles can be found.
- Embrace Italian culture
A final wise word of advice is to embrace the culture — Open yourself up to new experiences, exploration, and meeting new people. Stay flexible and be receptive to all the opportunities that come your way.
Learn Italian
Regardless of whether you’re a student or require Italian for your work or studies, investing time in learning the language is crucial. It not only simplifies day-to-day tasks and bureaucratic procedures but also enhances your ability to integrate into the culture and connect with others. Seek out language schools in your vicinity to explore your options.
Build a Support System
When embarking on a significant move to a foreign country, it’s essential to think about your support system. This can encompass individuals you’re relocating with, co-workers or fellow students, contacts already in Italy, or perhaps religious or volunteer groups you intend to join. Moving to a new place can be challenging, and having a network of people you can rely on can make the transition smoother.
In conclusion
This article has sought to break down a general list of things to keep in mind if you’re planning to move to Italy. If you’re interested in purchasing property in this beautiful country, we are happy to assist you! Feel free to contact us at info@italianrealestatelawyers.com.
If you have purchased your dream home in Italy you may find yourself uncertain about the post-sales responsibilities that follow the successful transaction. Managing essential utilities, comprehending local tax obligations, and handling administrative tasks can appear daunting, especially for non-Italian speakers. Fortunately, there are practical solutions available to simplify this process and ensure a seamless transition into your new Italian abode. Let’s explore the most crucial post-sale responsibilities, including setting up utilities and paying taxes, as well as the services offered by Italian Real Estate Lawyers to ease these processes.
Setting Up Utilities
Once you have signed the final deed of purchase and have become the owner of your new property, one of your initial tasks is usually to set up utilities for electricity, heating and water or to transfer the accounts into your name. The process of transferring utilities to your name is made easier when it is possible to gather previous utility bills from the former property owners. Liaising with various service providers for electricity, water, and heating can be complex. In fact, it is important to note that each utility company may have distinct procedures and requirements. Additionally, you may wish to explore options such as renewable energy sources or energy-efficient upgrades for your property. However, navigating these choices, especially in remote locations, can be challenging. In these cases, the expertise of professionals like Italian Real Estate Lawyers can come in hand.
Understanding the Required Taxes
Property ownership in Italy carries two annual tax obligations: IMU (Imposta Municipale Unica) and TARI (Tassa sui Rifiuti). These taxes are determined by the specific municipality in which your property is located. IMU is a municipal tax calculated based on your property’s characteristics and the municipality’s criteria. Importantly, IMU is applicable only to non-primary residences. If you have purchased a home in Italy and plan to reside there permanently, IMU will not be levied. However, if your property serves as a vacation home, you will be liable for IMU. On the other hand, TARI is a waste collection tax that varies depending on the town, city, or village of your residence, taking into account the number of occupants in your property. Generally, more residents lead to higher waste collection taxes.
IREL’s Various Available Packages
Recognizing the potential challenges that can arise following a property purchase, Italian Real Estate Lawyers offers a range of comprehensive packages designed to assist property buyers in a seamless transition. These packages are competitively priced and can be tailored to meet your specific requirements. All our post-sales services are managed meticulously by a team of highly qualified professionals, ensuring the efficient handling of customer requests and documentation while maintaining a professional and straightforward approach.
Basic: Our basic package focuses on utilities. When it comes to utilities (electricity, gas, and water), our team proactively engages with suppliers, streamlining the entire process and ensuring a smooth transition, including the “voltura” (change of contract holder) or supply activation. We will assist you in identifying the most suitable options for your home and efficiently establish the necessary accounts with the relevant service providers.
Advanced: Our advanced package extends its coverage to utilities and property taxes. Specifically, IMU and TARI taxes are expertly managed on behalf of the client, starting from the day of the property deed and continuing until the end of the respective tax year. IMU taxes are calculated based on the property’s purchase date, and our team ensures clients are well-informed about applicable deadlines and payment methods.
All-Inclusive: For the most comprehensive solution, we recommend our all-inclusive package. In addition to utilities and tax assistance, this package offers a wide array of services designed to facilitate a seamless transition into your new Italian home. Choose from three of the solutions offered, ranging from assisting you in obtaining a home insurance policy to guiding you through the process of opening a non-resident Italian bank account. Our comprehensive offering ensures that every aspect of your property management is meticulously handled, whether you have plans for home improvements, renovations, or you’re bringing pets from abroad, our team is ready to assist. Moreover, this package can be individually tailored to your unique requirements, providing you with a single point of contact for all your property-related needs. While the actual costs of services provided by professionals or companies will be your responsibility, the peace of mind and convenience our all-inclusive package affords make it the ultimate choice for a worry-free property ownership experience in Italy.
With the dedicated support of our professionals at Italian Real Estate Lawyers, you can fully immerse yourself in enjoying your new property while leaving administrative hassles behind. Your dream of owning a piece of Italy can now become a reality without the typical headaches associated with new home ownership tasks. Allow us to guide you through the post-sale process, ensuring a swift settlement so you can fully embrace the dolce vita lifestyle you envisioned.
For questions about post sale responsibilities or to reach out to us for our services, please contact us at info@italianrealestatelawyers.com
Exploring the world of property acquisition in a foreign country involves navigating legal intricacies and logistical challenges. Italy, renowned for its picturesque landscapes and cultural treasures, represents an attractive destination for property investments. In the interest of streamlining the property acquisition process, especially for those unable to be physically present in Italy, the power of attorney (POA), or “procura” in Italian, emerges as a solution. A power of attorney enables an individual to designate another person, usually a trusted legal representative or family member, to act on their behalf in legal affairs. This article delves into the concept of power of attorney and its acquisition process, offering tailored insights for potential property buyers.
Understanding the power of attorney (POA)
A power of attorney is a legal mechanism that authorizes an individual (the “principal”) to delegate decision-making authority to another person (the “agent” or “attorney-in-fact”). The agent, acting within the terms stipulated in the POA document, represents the principal’s interests. In the context of property acquisition in Italy, a power of attorney emerges as a strategic tool, allowing buyers to overcome geographical or linguistic constraints and engage in real estate transactions. In this way, the POA saves buyers time, financial resources, and the complexities of international travel. The appointed attorney-in-fact can execute essential decisions swiftly, including negotiating terms, completing transactions, and signing contracts, such as the final deed of sale. The ability to have an individual available for quick actions contributes to timely property acquisition without unnecessary delays.
Moreover, even those who have the opportunity to visit Italy on a regular basis find significant advantages in utilizing a power of attorney. This is especially true for individuals who do not speak Italian, particularly in situations that require their signature in the presence of an Italian notary public (notaio), such as property sales contracts. Italian law requires the translation of documents into the language of the non-Italian party, along with the involvement of a notarial interpreter during proceedings. This often leads to extended timelines and increased expenses. On the contrary, choosing to utilize a power of attorney, in conjunction with the expertise of a bilingual real estate lawyer, expedites the property acquisition process while enhancing cost-effectiveness.
At Italian Real Estate Lawyers, our expertise resides in Italian property law. We have extensive experience in drafting power of attorney documents tailored to our clients’ distinct needs. Our practice prioritizes the use of a bilingual POA, drafted both in English and Italian. This duality not only facilitates its comprehension for both the Italian notary and foreign authorities but also eliminates the need for separate and often costly translation procedures.
Drafting and legalizing the POA
It’s important to note that one must abide by Italian legal requirements when drafting a power of attorney. Ensuring the document’s adherence to local laws and regulations is vital to validate the property transaction and protect the interests of both parties involved. Furthermore, the versatility of a POA allows the principal to customize the powers granted to the agent. While the agent takes on the role of the principal’s representative, the scope of authority can be meticulously tailored, ensuring that their interests are duly represented. The document also stipulates details such as the duration of the POA’s validity.
Following the initial draft, the document is presented to a selected notary in Italy for examination and eventual endorsement, guaranteeing that the document aligns with the notarial interpretations. In Italian legal proceedings, the notary plays an indispensable role, particularly in property transactions. Their contributions encompass confirming the transaction’s legitimacy, verifying parties’ identities, and supervising the formalization of legal documents, including a power of attorney. Following the Italian notary’s endorsement of the drafted POA, the approved document is presented to the client for approval. The client then proceeds to notarize the POA within their home country, thereby affirming their identity and explicit consent.
The final step entails subjecting the POA to a process of legalization, usually executed through securing an apostille. This internationally recognized certificate validates the document’s authenticity, particularly for cross-border use. The apostille verifies both the document’s origin and the credibility of the issuing authority. After receiving the original POA with the apostille certification via postal mail in Italy, the document is valid for official use in Italy. The entire process can take from 2 to 6 weeks.
Conclusion
The power of attorney is a useful tool for international buyers navigating the Italian real estate market. This article has sought to explain the role of the power of attorney in property acquisition as well as give insight on its acquirement process. Beyond the realm of real estate, a power of attorney can be used in a variety of scenarios, ranging from mediation, legal disputes, banking, inheritance, and property management.
If you seek further information on the power of attorney for your property purchase, and on how the process of obtaining a POA might vary based on your country of origin, please feel free to contact us via email at info@italianrealestatelawyers.com.
The company’s foundation, its offices and professionals
Italian Real Estate Lawyers (IREL) was founded shortly after its sister company Italian Citizenship Assistance (ICA). As a matter of fact, many clients who obtained dual citizenship often expressed the desire to truly enjoy the possibility they had to stay in Italy without time constraints by purchasing a property in the country. Over the years IREL has helped many foreign citizens (regardless of whether they held an Italian residency visa) to overcome the challenges they faced when purchasing a property, ranging from unresponsive real estate agents to legal concerns stemming from unfamiliarity with the market’s intricacies.
ICA co-founder, Fabrizio Permunian, drawing on extensive experience in real estate spanning decades, realized that these impediments could be surmounted with the right guidance. Driven by the aim of providing optimal assistance, he embarked on aiding trusted clients in acquiring their dream homes. This involved having conversations with real estate agencies, negotiating prices, and offering advice on prudent purchases. A pivotal realization was that the entire process could be seamlessly managed from a distance. Typically, property viewings and notarial transactions were coordinated around the client’s commitments based on travel schedules, resulting in delays. By incorporating video tours and executing contracts via Power of Attorney, these hindrances were effectively mitigated. Fabrizio’s inaugural transaction on behalf of a foreign client enabled her to secure her dream property in Monteverde, Rome.
From these initial experiences, a quick survey among IREL’s clients revealed that most were interested in the opportunity to buy a property in Italy with comprehensive legal safeguarding, unwavering communication, remote support, and translation services. This revelation led to the birth of Italian Real Estate Lawyers, helmed by its CEO and founder, Fabrizio Permunian.
In a short time, the demand for IREL’s services surged, prompting the team’s expansion. Linda Balboni joined as Fabrizio’s indispensable right-hand, leveraging her prior real estate consultancy experience. The Italian Real Estate Lawyers team has since evolved into a versatile and adaptable unit, boasting a robust network of trusted notaries, surveyors and agencies. The firm stands as a prominent entity aiding U.S. and other foreign citizens in acquiring Italian properties. Operating from its headquarters in Rovigo, Italy, the team orchestrates deals spanning the entire Italian territory.
The team
IREL takes pride in its team’s diverse skill sets and specialized expertise. While a comprehensive understanding of the Italian real estate domain unites the members, their individual proficiencies synergize to offer optimal client support. Comprising attorney Marco Permunian, associate attorneys, real estate consultants, translators, and legal assistants, IREL’s team boasts linguistic fluency in both English and Italian. Many members have spent time abroad during their educational pursuits or previous employments, equipping them with multilingual capabilities.
Despite being based in Rovigo, Italy, where they work under the supervision and guidance of Marco and Fabrizio Permunian, one of IREL’s strength lies in their ability to operate throughout the entire Italian territory. Thanks to their experience in the field and to the large number of previous purchases that they have been able to complete, they rely on a strong network of trusted professionals, allowing them to expedite the fulfillment of client needs.
A-Z assistance
Prospective buyers can seek assistance irrespective of their current purchase stage. Whether they are at the property identification phase or have just tendered an offer on their dream home, IREL’s adept team evaluates their scenario, assigning the client to the most suitable case worker. The evaluation commences with an exploratory discussion led by the intake team, elucidating the client’s current circumstances and aspirations for the property investment. Typically conducted via email by Linda Balboni, IREL’s client-relations manager, this phase concludes within a few days. If further discussion is warranted, clients can opt for a Zoom or phone consultation with one of the team’s specialists.
Once a strategy is developed and the client decides to proceed with IREL’s services, the assigned case specialist will officially begin the collaboration with them. Although the services can vary depending on the client’s needs, IREL’s most popular package offers A-Z, all-around assistance: if the property has not been identified yet, a real estate search will be made (at no additional cost) in order to identify a few suitable options. Then, if the client is available to visit the properties in person, a viewing itinerary is organized and all the relevant information is translated into English. Being a law firm, as opposed to a real estate agency, gives IREL and their clients a significant advantage during this stage: as their compensation does not derive from a commission fee based on the property’s price (contrarily to real estate agents), they are able to organize tours with unlimited agents and schedule viewings for any property on the market.
Nevertheless, the bulk of the company’s work takes place once a suitable property is identified and a formal offer must be written: in fact, the formal offer states the terms of the transaction and can be modified to protect both the seller and the buyer. To best safeguard the buyer’s interests, IREL always carefully reviews and modifies, where necessary, the formal offer in order to insert all the clauses necessary for their protection: for instance, should a surveyor identify a structural defect in the house, the buyer will be entitled to getting the deposit back.
IREL walks the client through property research and identification, through to a formal offer, all the way up to the drafting and signing of the final deed of sale. In all phases, any contracts are made available in English translations, and if the client is unavailable to sign in person for the final deed, the POA is drafted. IREL works side by side with the client from beginning inquiries until they have the keys to their dream home in hand.
Property tours
For clients deeply involved in property research, IREL offers a VIP Property tour package. Collaboratively, a selection of 10-15 properties is chosen in the preferred area for personal visits. This immersive venture enables firsthand exploration and evaluation of each property, accompanied by local excursions, meals, and an exclusive Real Estate Info Session led by experts. A day of immersive learning at their new office, situated in a 16th-century Veneto villa outside Verona, awaits. Lead attorney Marco Permunian imparts personalized guidance, covering every facet of the purchase process, real estate dynamics, mortgages, visas, and even Italian citizenship. This exclusive one-on-one session guarantees exhaustive clarification of all inquiries.
Post-sale services
The support offered by Italian Real Estate Lawyers extends beyond the culmination of a property purchase. Acquiring a home does not automatically render it ready-to-move-in, so to eliminate obstacles, IREL’s post-sale offerings ensure purchased properties are fully prepared. They assist in utilities setup, bank account establishment, and locating local cleaning services, among other tasks. Additionally, IREL addresses post-sale relocations, particularly for clients transitioning to full-time residency in Italy, including those shipping furniture, vehicles, and pets. The dedicated post-sale team gathers relocation service estimates and coordinates the shipment process.
If you are thinking of purchasing your dream house in Italy and you would like further information, do not hesitate to contact info@italianrealestatelawyers.com for a free consultation!
Italy is an attractive destination for real estate; whether you are considering buying a property in the Bel Paese as your primary residence, a vacation home, or an investment, the opportunity comes with many perks. Italy is also strategically located to travel within Europe and residents enjoy a high quality of living. However, the process can be daunting and raise many questions. For instance, do you have to pay taxes in Italy if you buy a property and rent it? How many days do you need to spend in Italy to qualify as a tax resident?
Codice Fiscale – The Italian Tax ID
Obtaining a Codice Fiscale, or fiscal code, is the first step to purchase a house in Italy. The code is a unique alphanumeric identification number assigned to individuals in Italy for tax and administrative purposes. It is a universal identification code used for official transactions, such as opening a bank account, signing employment contracts, obtaining healthcare services, and filing tax returns. The Codice Fiscale is derived from an individual’s personal information, including their name, date of birth and gender, and is issued by the Italian tax authorities or consulates abroad. It plays a vital role in conducting official and financial transactions in Italy. Individuals born on Italian soil are automatically issued their fiscal code; those who are eligible for Italian citizenship can also get one. The Codice Fiscale is not limited to Italian residents; it is also issued to non-residents for various purposes, including property transactions. Non-residents can obtain a Codice Fiscale at an Italian tax office or through an authorized representative, such as a legal professional or tax consultant. Obtaining a fiscal code does not mean that you automatically become an income taxpayer.
Income taxes and tax residency
When does one have to pay taxes in Italy?
In Italy, taxes are owed by both residents and non-residents who have generated income or own assets within the country. An individual’s tax liability is linked to the number of days spent in Italy. In fact, should an individual spend more than 183 days during a tax year in the country, then his/her worldwide income would be subject to taxation in Italy, whether the individual is registered as a resident or not. In this case, Italy is the person’s legal tax residence, even in case the income is entirely generated outside of Italy.
On the other hand, should the person spend less than 183 days in Italy during a tax year, then the taxation would only apply to the income generated in Italy over that time frame.
In Italy, an individual’s income must be taxed with the “Denuncia dei Redditi” or Tax Report, declaring worldwide earnings, assets, properties, and bank accounts. Depending on your nationality or country of residence, you might be able to avoid double taxation if Italy and your country of origin or residence have a special agreement. Due to the fact that income taxes are tricky to navigate, we recommend consulting an international tax accountant.
Annual property taxes
When you own a house in Italian, aka a “casa di proprietà,” you will have to pay three kinds of annual property taxes, respectively Imu, Tasi, and Tari. They must be remitted to the “Comune” (municipality) where the property is located. Let’s break them down:
- IMU, “Imposta Municipale Propria” or Local Municipal Tax: this tax does not apply to owners of a “first home”, but it needs to be paid for luxury homes, mansions, castles, buildings, farmland, and plots of land. The payment of this tax is remitted in two installments: the first one’s deadline is on June 16th of each year, and the second one is on December 16th of each year.
- TASI, “Tributo per i Servizi Indivisibili” or Tax for Indivisible Services: first homes’ owners are exempt from the Tasi. In January 2020, the Tasi merged with Imu, becoming an “Imposta unica”, a single tax. The Tasi tax is a local property tax imposed by Italian municipalities. Rates vary by municipality and are based on the property’s value.
- TARI: “Tassa sui Rifiuti” or Waste Tax: its payment is required to cover the expenses of waste collection, transport, and disposal. Its amount is set by each municipality, based on the property’s surface (the square meters) and the quantity of waste produced (the number of people living in the property).
Renting your property and earning an income
With Italy being such a substantial market for short and long-term rentals, considering these options can be beneficial. When renting out a property in Italy, several taxes and obligations may apply. Here are some common taxes associated with rental income:
Income Tax: rental income is generally subject to income tax in Italy. The income is added to your overall taxable income, and you must declare it in your annual tax return. The applicable income tax rate depends on your total income and tax bracket. The taxes you owe also depend on the number of properties you own in Italy. The “Imposta di Registro” is the registration tax paid on the rental agreement. The tax rate is typically a percentage of the annual rental value and may vary based on the lease length. The “Imposta di Bollo” is a stamp duty tax that applies to the rental agreement. It applies to certain legal and financial documents, including rental agreements.
Seeking help to make the process smoother
When purchasing a property in Italy, it is essential to remember that there are a few expenses and taxes to foresee. Some are connected to the purchasing process, others are expected as annual costs, and there will also be the regular costs associated with utilities. If you are planning on establishing your residency in Italy, taxes on income are to be evaluated based on the period spent in the country during the tax year. While they are legislations and general rules, each case remains unique and has challenges. Professionals such as Italian Real Estate Lawyers are here to make your dream come true and make the bureaucracy smoother.
If you are thinking of purchasing your future home in Italy and wish to be assisted during each step, do not hesitate to reach out to our bilingual team at info@italianrealestatelawyers.com.
DISCLAIMER: please note that this article aims to provide general information, and it is not to be considered as legal advice as each case may vary based on individual circumstances. Therefore, we always recommend consulting with a dual citizenship taxation specialist.
When it comes to purchasing their first home, Italian citizens are eligible for a range of concessions provided by the state. However, questions surface when individuals residing abroad, registered in the Register of Italians Residing Abroad (A.I.R.E.), seek access to these benefits. In response, on June 13, 2023, Italy amended a new law (D.L. n. 69/2023, Art. 2) regarding the primary-home tax benefits that Italians living abroad may claim. The new legislation marks a departure from the previous regulations, as it grants tax incentives only to certain categories of Italians enrolled in the Register of Italians Residing Abroad (A.I.R.E.). In this article we will explore the key aspects of the law, including the eligibility criteria, and discuss how it impacts Italians living abroad, including dual citizens.
Understanding the Law
The newly revised law specifically addresses the provision of tax benefits for the purchase of a primary residence in Italy by Italians residing abroad who are enrolled in A.I.R.E. Unlike the previous condition, which allowed any Italian enrolled in A.I.R.E. to automatically qualify for primary home tax benefits without additional requirements, the amended law introduces stricter eligibility criteria. Previously, proof of residency in Italy was not required, as long as the purchased property served as the individual’s primary residence in the country. However, the revised law now mandates that individuals meet specific conditions related to previous residency in Italy and work-related connections to be eligible for the tax benefits. These additional requirements are intended to target and support working Italians residing abroad who have established strong ties with Italy through their residential history.
Eligibility Criteria
The new amendment introduces specific eligibility criteria to qualify for primary-home tax benefits for Italians residing abroad. To be eligible, individuals must meet the following conditions:
- Previous residency and work reasons: Italians who have previously lived or resided in Italy for a continuous period of at least 5 years and are currently residing abroad with their tax residency in a foreign country, due to employment / work reasons, are eligible for the tax benefits.
- Location of the home: in order to qualify for the primary-home benefits, the property being purchased in Italy must be situated in the municipality where the individual was born or in the municipality where they previously resided or worked before moving abroad.
In the case of dual citizens, such as an American-Italian citizen who is enrolled in A.I.R.E. but has never lived in Italy, eligibility for primary-home tax benefits under the new law would therefore rule out. However, the law does not explicitly address the specific circumstances of dual citizens who lack residency experience in Italy. It is advisable for dual citizens to consult with legal professionals to discuss their eligibility and any potential exceptions or additional requirements that may apply to their situation.
Importance of the Law
The newly implemented law is specifically aimed at providing primary home tax benefits to expatriated Italians who have left the country for work-related reasons but have maintained strong ties with Italy through prior long-term residency. By extending primary-home tax benefits to eligible Italians residing abroad, the government aims to facilitate the return and reintegration of Italian expatriates. This approach acknowledges the contributions and potential economic impact of Italians living abroad, fostering a stronger bond between them and their home country. However, on the flip side, the new requirements could be perceived as excluding Italian citizens who have obtained citizenship through Jure Matrimoni or Jure Sanguinis and have never resided in Italy or have resided in the country for less than 5 years.
Conclusion
Italy’s recent enactment of a new law granting primary-home tax benefits to Italians residing abroad under specific conditions represents a shift in policy. By providing tax incentives for the purchase of a primary residence, the government aims to specifically support those expatriates who have work-related connections or have previously resided in Italy for an extended period. These tax benefits encourage Italians living abroad to invest in and strengthen their ties to their home country. While the new law granting primary-home tax benefits to Italians residing abroad has officially gone into effect, it is important to note that the Notary Commission of Italy, responsible for overseeing property transactions, has yet to express its official stance on the implications and interpretation of the ruling. Therefore, further clarification from the Notary Commission is eagerly awaited to provide guidance on the practical application of the law for eligible individuals, including dual citizens, and to address any potential ambiguities or exceptions that may arise.
In the last decade a number of enchanting rural villages across Italy have been attracting more and more foreigners interested in investing in Italy’s real estate market. These small towns have been promoting several schemes in order to fight the rural depopulation caused by a number of socio-economic factors which, in turn, have led many young people with aspirations of a successful career to move abroad or to bigger cities in Italy. Among the most successful projects offered in the past few years, for instance, is the 1-euro properties scheme. However, this comes with a number of advantages and disadvantages. In fact, while the purchasing price for these properties is often one euro, the buyer must invest in their renovation and redevelopment thus the final cost to buy the property might be higher than anticipated. In addition to this, the buyer needs to pay for the notary’s fees and the registration of the property. There are also some specific obligations which the buyer must adhere to, such as renovating the property within a set number of months. So, what are the benefits of buying a 1-euro property? What are the disadvantages? This article seeks to provide you with an overview of the most important aspects you need to consider before you decide to purchase a 1-euro house in Italy.
The pros and cons of buying 1-euro houses
Purchasing 1-euro properties offers several advantages, including cost savings, contributing to the revitalization of small villages, and providing an opportunity for foreign enthusiasts of Italy to explore charming remote villages nestled in picturesque landscapes. However, buyers of 1-euro homes also have specific obligations, such as establishing residency in the property they decide to purchase, presenting a renovation project, and paying a security deposit which is retained by the municipality if the buyer does not carry out the renovation works before the deadline established by law. Furthermore, some villages may decide to sell properties through a bid which starts at 1 euro, and they may put restrictions on re-selling the property, which might be a challenge in itself given the rural location of most of the properties.
Are there any alternatives to 1-euro houses?
While a 1-euro property might sound like an appealing choice, it is worth noting that in Italy, you can often find ready-to-move-in properties that typically range from €10,000 to €60,000 and do not necessitate any significant repairs or renovation work. Therefore, these properties may in the long run be cheaper than 1-euro homes. The town of Biccari in Apulia, for instance, is one of the first towns in Italy to have offered innovative real estate schemes as an alternative to 1-euro houses. Biccari is located near Foggia and it is considered to be a corner of paradise with its fresh mountain air and natural surroundings. In the 1950s it had a population of 5,000 people, but the number gradually decreased as more and more people left the town due to the lack of job opportunities. In the past, many properties were owned by families who eventually emigrated and would use them as second homes during the summer, however, as the years passed, many families stopped returning to the town and ultimately abandoned their properties. As a result, Biccari depopulated, almost becoming a ghost town with less than 2,000 residents in 2010.
As Biccari’s mayor pointed out, today the town offers many charming houses and apartments, which are livable and in good condition, especially compared to 1-euro houses. These turnkey houses are available on Biccari’s official website. More information can also be found on the town’s Facebook page.
Other towns in both the north and the south of Italy are following Biccari’s footsteps and are launching projects which aim to attract foreign investment. Among these are Carrega Ligure, Latronico and Troina. Carrega Ligure in Piedmont is a small town which is close to the borders of Liguria and Emilia Romagna. The municipality’s website offers a few listings which feature pictures and relevant details. If potential buyers are interested in one of these properties, they can email the municipality for further information and book a tour to visit the properties. On the other hand, Latronico in Basilicata is known as the “village of wellness” thanks to its thermal baths and its history as a wellness destination. This municipality has launched a website called “Your House in Latronico”, where prospective buyers can view house listings and connect with property owners and real estate agencies. Current listings show negotiable prices ranging from €9,500 to €50,000.
Finally, Troina in Sicily is another enchanting village surrounded by forests and parks. In particular, Troina offers financial incentives up to a maximum of €10,000 to people who relocate to the town’s historic district and establish their residency there.
However, small towns are not the only locations offering alternatives to 1-euro houses. In fact, there are also a few Italian regions which are promoting advantageous initiatives, such as “residency income” for those who purchase a property and relocate there. It is important to note that these schemes are not limited only to Italian citizens – they apply to all individuals regardless of their country of origin. Sardinia, for instance, offers several bonuses to people who relocate to municipalities with less than 3,000 inhabitants. Among these, the so-called “Bonus Casa” is valid until 2025 and it entails a €15,000 grant which covers 50% of the total expenses to purchase and renovate a property. However, individuals who are granted this incentive must establish their residency in the property for a minimum of 5 years. In addition to this, the region has also recently launched the “Bonus bebè”, which offers families who relocate to some specific villages €600 per month for each first child (either newborn or adopted in 2023) and €400 for any additional child. Similarly, in 2022 Emilia Romagna launched the “Bando Montagna 2022”, a project which aims to repopulate and bring new life to municipalities which are spread out across the Apennines.
Final remarks
In conclusion, there are several alternatives to 1-euro houses which include ready-to-move-in homes in small municipalities. There are also a number of bonuses and schemes which are worth considering that are available to both Italian and foreign citizens alike.
Don’t miss out on the opportunity to purchase your dream property in one of Italy’s charming and unspoiled villages! If you are thinking of purchasing a property and you would like more information, feel free to contact us at info@italianrealestatelawyers.com .