We all know how stressful buying a property can be, especially when you decide to do so in a foreign country. This article will provide you with an overview of the rules you need to follow in order to buy a property in one of the most beautiful countries in Europe. It is not easy but it is worth it!
Documents you will need: if you are not living in Italy and you do not have a residence permit, things are slightly more complicated. However, if you are from the United States or from several other countries there is an international agreement that allows foreign citizens to buy property in Italy without any restrictions. (Further information is available on the website of the Italian Ministry of Foreign Affairs https://www.esteri.it/mae/en/servizi/stranieri/condizreciprocita). As mentioned in our previous article, in order to buy property as a foreigner you need an Italian tax code and an Italian bank account. If you are in Italy, opening a bank account is quite easy: you can go to the bank with your passport and your Italian tax code. As soon as the bank confirms your identity, you will be required to sign a number of documents. You might also have to provide a statement issued by your bank in your home country that certifies that you are a trustworthy customer. In case you are not in Italy, you should find a bank that will transfer your information to an Italian bank. At this point the Italian bank will create an account in your absence.
Finding a lawyer: this step might seem obvious but it is crucial. Choose an attorney who has already had experience with international clients for the purchase of a property. The attorney can assist you with the purchasing process and above all will prevent you from running into a shady deal. It is advisable to hire an independent attorney who will protect your interests and who will help you have a better understanding of the Italian purchasing process.
Power of attorney: this aspect is closely connected to the previous one. If you are not in Italy and you do not have time to travel abroad, you can authorize an Italian lawyer to represent you and act on your behalf in order to conclude the purchase of the property. In short, the power of attorney (also known as POA) is a legal document that gives one person (the agent or attorney) the power to act on another person’s behalf. You can sign a power of attorney in front of any foreign notary public or solicitor who will authenticate the signature.
Preliminary contract: once you have decided where to buy and how to make your payment, you can then make an offer. You should take into account that this first offer is mandatory only for the buyer – the seller can deem other offers. As soon as the seller accepts it, the deal will become binding for both parties. Only then can the preliminary contract (contratto preliminare) be written. The preliminary contract sets out the terms and conditions of the sale, and this is the reason why this step is so crucial. When this agreement is signed a deposit will be paid (generally 10% or 30% of the value of the sale price). If for some reason the seller decides to withdraw from the agreement, he will be obliged to pay double the amount you gave as a deposit. On the other hand, if you decide to withdraw without any valid reason, you will not receive a refund.
Notarial deed (Rogito Notarile): this is the final selling and purchasing agreement that needs to be signed with the presence of a notary for it to be legally binding. The notary will transfer the information and the signed documents to the land registry for registration. Registration protects the property from third parties charging any interests on it. Therefore, the buyer has to provide the original certificate of ownership.
Paying taxes and transaction costs: in the Italian system anyone who owns a property must pay taxes. This is the list of compulsory taxes in Italy:
- IMU: a municipal tax that you must pay because you are the owner of the property.
- TARI: a waste tax.
- TASI: a fee that has to be paid to the municipality for indivisible services such street lightening and road maintenance.
Additionally, you will have to pay purchasing taxes which will vary depending on whether or not you will be residing in Italy. In fact, purchasing taxes for non-residents are a bit higher compared to those for residents. In particular, if you intend to relocate to Italy you will have to pay between 1% and 2% of the property value; on the other hand, if you only intend to spend your holidays in Italy, you will have to pay 9% of the property value. Finally, additional costs when purchasing property are the land registry tax and the notary fees.
With this in mind, you should now have a clearer idea of the steps involved in purchasing the house of your dreams in Italy.