Buying Property in Italy
Buying property in Italy as a foreigner
Italy: a rich heritage, magnificent buildings, cities steeped in history and regions with landscapes as sublime as they are varied. This territorial diversity and widely different prices per square metre of property makes the Italian real estate market interesting.
Property prices in Italy
The average price per square metre for Italian property was around €2,300 at the end of 2019.
However, it was much lower in southern Italy. In Puglia for example, it is possible to buy a house for 1,300 €/m². If you’re looking for a property in Florence or Venice, prices are much higher: expect to pay more than 5,000 €/m² for an apartment in Venice.
Overall, due to the COVID-19 pandemic it is likely that there will be a drop in Italian property prices during 2020. This fall in prices offers great opportunities for investors.
Buying property in Italy : property tax in Italy and associated fees
Before committing to the purchase of a property in Italy, it is essential to consider the inherent costs.
First of all, as a foreign national, you are more likely to use a real estate agent. Estate agent fees vary greatly and can be as much as 4% of the selling price, i.e. €12,000 for a property worth €300,000.
In Italy a notary public (Notaio) must oversee the transaction on behalf of the Italian state. The notary’s fees are also variable: allow for between 2% and 4%.
However, in Italy, the most important fees are the registration fees, which represent 9%, or €27,000 for a property worth €300.000. However, these costs should be put into perspective, as the rate is based on the land registry (cadastral) value of the property, which is generally lower than the actual value.
As for property taxes, these vary between 0.46% and 1.06% per annum. These are all costs that should be anticipated before buying a property in Italy.
Purchasing property in Italy: all the involved legal steps
It is crucial to clarify the situation before buying. Italian property law is complex and may differ from your own country. You should always seek independent legal advice before signing any paperwork.
Once you have decided to purchase a property, you and the vendor will sign a reservation offer. This is an irrevocable letter of intent to purchase (proposta irrevocabile d’acquisto). The property is then excluded from the market for a defined period of time, usually two weeks.
During this period, you should run thorough legal checks and searches on the property. This includes, but is not limited to verifying property ownership, planning and zoning permits, the absence of a mortgage on the property and we would always recommend that you have a property survey conducted.
You will then have to pay a deposit. This deposit will be returned in full if the sale does not go through, or will form part of the agreed purchase price if the sale is completed.
It is advisable to sign a preliminary deed of sale (contratto preliminare di vendita), even though it is not a compulsory step in the process.
Having a preliminary sales contract allows you to fix terms and conditions of the sale based on the legal checks and searches you have conducted. The conditions contained in the preliminary sales agreement will be included in the deed of sale (atto di vendita), which you sign when you complete the transaction.
It should be noted that when one of the two parties does not understand Italian, a second draft of the deed in your language is required, but the Italian version of the deed will prevail in a court of law.
Should you need any further information concerning the topic, please get in touch.