17 Aug Buying real estate – the process
How does a real estate purchase in Italy work?
Codice Fiscale
How does a real estate purchase in Italy work?
Here is our personal experience report.
Before you can actually purchase a property in Italy, you will need a personal tax number (codice fiscale), which you should apply for at the tax office in whose jurisdiction the property you wish to buy is located. Each person who later signs the notary contract as the buyer must have their own number. This codice fiscale is also frequently requested for many other procedures – opening an account, registering for electricity, water, waste, gas, internet. The application is relatively quick. If you work with a good brokerage firm, they will take care of the registration for you. If you want to apply for the number yourself, you can find a step-by-step guide here: How to apply for a Codice Fiscale
Binding offer - Proposta d'acquisto
Once you’ve decided on a property and, of course, thoroughly checked the property –I’ll tell you how we found our dream property here – you must first submit a binding bid (proposta d’acquisto).
The corresponding form is prepared by the estate agent.
With this binding offer, a first installment of the purchase price is also due.
This is usually 2%, which is also due if you decide against the property in the end.
Preliminary contract - Contratto Preliminare
In our case, once this first installment had been received by the seller (it can also be via an escrow account), a preliminary contract (contratto preliminare) was signed by all parties in the presence of the estate agent.
Many details can be arranged individually.
For example, we were very interested in receiving a key at a very early stage so that we could plan the renovation work with an architect.
That’s why we paid a significantly higher deposit (20%) and the sellers gave us a set of keys immediately after signing the preliminary contract.
This preliminary contract also contains an important passage, namely that the property is in compliance with building regulations.
Examination of the building law status of the property
Once the preliminary contract had been signed, a formal process was set in motion that is very different from that in Germany: The seller must confirm that the property is in perfect condition in terms of building law.
As a rule, the seller commissions a publicly appointed surveyor to inspect the property for compliance with building regulations.
I don’t know whether a surveyor is mandatory for all property purchases, but it should definitely be done.
The surveyor compares the property in detail with the documents available at the land registry.
This concerns both the land and the exterior as well as the interior of the buildings.
In Italy, many things are also subject to approval in the interior.
As soon as the surveyor has drawn up his report and the transfer of ownership has been reported to the tax office (the estate agent also did this for us), the notary appointment can be made. The remaining purchase price is then due, which we have transferred to an escrow account with the notary.
Notary fees and taxes
Unlike in Germany, there is no binding rate for the notary’s costs.
In our case, the costs including contract translation and interpreter were significantly cheaper than they would have been in Germany.
But what you should pay attention to is the following: Taxes are payable on the purchase of a property.
If the property is used as a second home, it is 9% of the cadastral value of the property; if the property is used as a main residence, i.e. the residence is actually registered in Italy, it is only 2%.
But don’t worry: the cadastral value is always well below the purchase price of the property, in our case it was only around a tenth of the purchase price.
Please note: In Italy, no distinction is made between primary and secondary residences.
There is only one residence (residenza), but you can own a property and live there.
If you register your residenza in Italy, you will also be liable for income tax in Italy and will receive an Italian identity card.
Click here to go to the website of the Federal Foreign Office for more information if you want to settle in Italy: Foreign Office
Notary appointment
How does a real estate purchase in Italy work? In our case, the notary had the purchase contract translated into German and also appointed a – very good – interpreter for us. So we had a German and an Italian version of the contract to read along with and the interpreter helped us with any questions. So far so good. But as described above, the devil is in the details. So please double-check the legal status of the property. It is very important that you look for an architect during the purchase process who is well known to the responsible local authority (only he knows whether, where and how things can be simplified or accelerated) and with whom you can communicate well in terms of language so that you can discuss any legal details.
I can’t make any recommendations about architects at the moment, but we were very satisfied with the notary and especially with the translator she appointed.
Unfortunately, the website is only in Italian, but the notary Barresi in Varese speaks very good English:
Olivia Barresi
FBV Notai Varese
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