Selling a property in Italy consists of a number of stages that need to be carried out meticulously in order to ensure that both the seller and the buyer comply with all legal and bureaucratic requirements. Drawing from this, this article will provide you with a detailed overview of the main stages involved in selling a property in Italy.
Before you design a marketing strategy for your property, you need to set the selling price by considering the price of similar properties in the area where your property is located, the condition of your property and the local supply and demand. You should be aware that buyers usually tend to negotiate the purchasing price, therefore, it is advisable for you to set a minimum price for your property. You can market your property either by relying on a real estate agency or by designing your own marketing strategy. Although the first option is a bit more expensive because you need to pay the real estate agent a commission which usually accounts for 2% or 3% of the purchasing price, a real estate agent can provide greater visibility to your listing, thereby reaching a higher number of potential buyers.
When your property is on the market there are a number of requirements that you need to meet. Firstly, if you do not reside in Italy you need to provide your passport and a bank statement which shows where you pay your taxes. Please note that you need to provide certified translations of all documents that are not in Italian. Moreover, at the beginning of the negotiation stage it is mandatory to obtain the so called “A.P.E.” (Energy Performance Certificate) which provides information regarding the energy consumption level of the property you are selling. This document is issued by an energy certifier who can either be an architect or an energy engineer who carries out the energy diagnosis of a property in order to quantify the energy consumption of the building. This ranges from A4 (high energy saving building) to G (low energy saving building). The cost to retrieve the Energy Performance Certificate varies from €150 to €250 depending on the type of property and on the city where the property is located. Furthermore, the buyer has to check all of the documentation related to the property before signing the final contract in order to ensure that everything is in order. The main documents that will need to be reviewed are the Property Deed, the Certificate of Building Permit, the Certificate of Use and Occupancy, the Cadastral Documents, the Environmental Certification and the Technical-Administrative Documents.
You can expect potential buyers who are interested in your property to send you a formal proposal through which they officially show their interest and state the amount they offer for the property. This document outlines the basic terms and conditions between the buyer and the seller and it generally includes a small deposit of approximately 5% of the property value. The formal purchase offer usually comes with a deadline by which you need to accept or reject the offer formally. If you accept the offer then the property is temporarily taken off the market and both you and the buyer can sign the Preliminary Contract of Sale.
The Preliminary Contract of Sale outlines the selling conditions and it has binding effects for both the seller and the buyer. At this stage, the buyer pays a deposit which accounts for 10% – 30% of the property value.
Please note that it is harder to negotiate or amend the general terms and conditions of the purchase when the buyer has already paid the deposit. If the deposit is defined as “Caparra Confirmatoria” and the purchaser no longer wants to proceed or fails to fulfil certain obligations, you can then rescind the contract and retain the entire deposit paid. On the other hand, if you default then the purchaser will be legally entitled to a refund (which is normally double the amount of the deposit paid). Conversely, if the deposit is defined as “Caparra Penitenziale”, either or both parties can terminate the agreement.
It is worth mentioning that if there is a mortgage on the property, you will need to agree whether to pay it off before you sign the Final Contract of Sale or whether the buyer is willing to take it over.
The final step of the process is signing the Final Contract of Sale, which is the document that stipulates the transfer of the property rights from the seller to the buyer. The contract needs to be signed before a Notary Public, who is a qualified lawyer and government-appointed officer who witnesses and registers property transfers, drafts the Final Contract of Sale and acts on behalf of both the seller and the purchaser. Although the buyer usually pays a larger portion of the notary’s fee, the seller also often has to pay a small percentage. Signing this contract entails obligations for both parties; in other words, the purchaser will need to hand over the keys and guarantee that there is no risk of eviction. On the other hand, the buyer must pay the agreed price. Payment can be made through a check made payable to the seller or it can be made into a special bank account held by the notary, who will then transfer the amount to the seller once the contract has been registered at the Land Registry office.
The transfer of ownership rights occurs immediately after the signature, even if the agreed price has not been paid entirely or the keys to the property have not been delivered to the buyer yet.
Finally, as for taxes on properties, if you have decided to sell your “first home” (prima casa) within five years of the purchase, you have to pay personal income tax (IRPEF) or any other capital gains tax. However, if you buy a new residential property in Italy within one year from the sale, you do not have to pay this tax.
In conclusion, if you want to sell your property in Italy you need to have a good understanding of the legal and bureaucratic requirements. Therefore, it is advisable for foreigners who are not familiar with the Italian real estate market to rely on professionals in order to avoid any misunderstandings and unexpected glitches.
If you need help with selling your property in Italy, our team of real estate professionals would be glad to assist you throughout the process. Feel free to contact us at info@italianrealestatelawyers.com.
