The Italian property market
Dreaming of buying property in Italy? The country’s rich heritage, magnificent buildings, cities steeped in history and regions with landscapes are as sublime as they are varied. This territorial diversity and widely different prices per square metre of property make the Italian real estate market very interesting.
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.
Fees and taxes
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 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. That said, 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, they vary between 0.46% and 1.06% per annum. Nonetheless, these are costs that should be anticipated before buying a property in Italy.
Purchasing property in Italy: the 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 decide 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) and means the vendor agrees to remove the property from the market for a defined period of time – usually two weeks.
While the property is off the market, you should conduct legal checks and searches into the property. This includes verifying property ownership, planning permits, zoning regulations and mortgages on the property. In addition, we would recommend that you have a property survey conducted.
Following your due diligence if you decide to proceed with the purchase, you will have to pay a deposit. If the sale falls through, you will get your deposit back in full. If on the other hand you continue to completion, the deposit will form part of the agreed purchase price.
It is advisable to sign a preliminary contract (contratto preliminare di vendita), even though it is not a compulsory step in the process. Having a preliminary contract allows you to fix terms and conditions of the sale based on your due diligence.
Deed of Sale
Any conditions contained in the preliminary contract 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.
For more comprehensive information about the Italian property purchasing process, you might like to read our guide. If you would like to discuss your situation or, if we can be of assistance, please get in touch.