Despite the housing market having been influenced heavily in recent years due to health emergency-related uncertainties and a near-total shutdown, it is fair to argue that since then prices have risen in proportion to the high level of demand. This is especially true in Italy where a combination of factors such as the country’s lifestyle, innovative tax rates and incentives have boosted the country’s housing market. In particular, recent studies argue that most of the requests in 2021 came mainly from overseas and particularly from U.S. citizens wishing to purchase property in what they define the “Bel Paese”. However, there has also been a surge in European buyers and more specifically in German, British and Dutch citizens. However, despite the rising prices Italy remains a very affordable country for foreign buyers. In fact, the median price for a house in Italy is much lower than in countries such as the U.S. and the U.K., to name a few. If you are thinking of purchasing a property in Italy and are wondering about issues such as the time that is necessary to purchase a property, as well as the purchasing process per se, this article will provide you with a few pieces of information to help you better understand the process. At the end of the article you will also find a podcast hosted by our attorney Marco Permunian and content creator and dual citizen expat Rafael Di Furia.
When comparing Italy’s “mercato immobiliare” (real estate market) to other real estate markets, such as the one in the U.S., there are different aspects to consider. Firstly, it is worth making a distinction between how long properties stay on the market, and how long it takes to finalize the purchasing process once you have identified the property you would like to buy. Perhaps one of the most important factors which influences timing, especially in the initial phases of the purchasing process, is the location. Although properties in rural areas tend to stay on the housing market longer and houses in cities tend to be sold much faster across both the U.S. and Italy, there is a remarkable difference between U.S. and Italy. Generally speaking, houses in the United States are sold faster than in Italy. However, there may also be cities and areas such as Milan or Lake Garda where a property might be taken off the market and sold within a few days. On the other hand, properties in rural areas tend to be sold within 2 or 3 years from the moment they are advertised on the market. A study run by “Ufficio Studi del Gruppo Tecnocasa”, arguably one of the largest real estate agencies in Italy, reports that during the second semester of 2021, properties in big cities were sold on average in 114 days. On the other hand, properties in big cities and surrounding provinces were sold within 144 days. This figure has decreased in 2022 to 110 and 131 respectively.
In particular, the most sought-after properties are the ones located in the cities of Milan and Bologna where properties are sold very quickly; in fact, Milan is on top of the list with properties being sold in only 57 days, followed by Bologna where properties are sold in 72 days.
On the other hand, as the American real estate company Zillow reported, U.S. properties generally spend about 25 days on the market before being sold, as opposed to 30 days in 2019. However, this figure needs to be added to 49, which is the number of days which are necessary on average to close on a home purchase. Thus, the total number of days needed to purchase a property in the U.S. is 74 days.
The purchasing process in Italy
Once a buyer has identified the property they would like to purchase, the first step is to present a formal purchase offer. It is always advisable to try to negotiate the final price as the asking price generally tends to be higher than the actual value of the property. If the seller accepts the offer the buyer can sign a preliminary contract of sale, which is legally binding. The preliminary contract also sets a date by which the final contract will need to be executed. At this stage of the process, the purchaser also pays a deposit of approximately 10%-20% of the property value. If the deposit is defined as “Caparra Confirmatoria” and the purchaser fails to fulfil certain obligations, the seller can then rescind the contract (“rescissione del contratto”) and the purchaser will automatically lose the entire deposit paid. If, on the other hand, the seller refuses or is no longer able to sell the property, then the purchaser will be legally entitled to a refund, which is double the amount of the deposit paid initially. At this point, if the buyer has the funds to purchase the property and pay in cash and there is no need to perform extensive due diligence on the property both parties can go ahead and sign the final contract of sale, which generally occurs a few weeks after the offer is accepted. There are cases in which it may take slightly longer, such as if the buyer is taking out a mortgage, if thorough due diligence needs to be carried out on the property, or if the property is occupied by tenants who need to move out within a given period of time.
Finally, the final contract of sale is signed by both parties in front of a Notary who is responsible for assessing all the legal paperwork related to the property. If all the documents are in order, the Notary will schedule a date in which both parties can sign the final deed of sale (in Italian “rogito”), which will then need to be registered at the “Agenzia delle Entrate” (the Italian revenue agency). The buyer becomes the property owner on the day of the closing when both parties sign the final deed before the notary. If the buyer cannot be present on the day of the closing, he or she can sign a power of attorney and allow an agent to sign the final deed of sale.
We at Italian real estate lawyers can help you purchase the house of your dreams regardless of whether you would like to be present in Italy during the purchasing process or whether you reside abroad and cannot travel to Italy multiple times. Do not hesitate to contact us at email@example.com.
Our team is fluent in English and Italian, and we would be happy to assist you in the process of purchasing your home in Italy!