Tag Archive for: Italian Property Legal Assistance

Buying A Property to Renovate in Italy

Avoid common mistakes when buying a property to renovate in Italy

Buying a property to renovate in Italy is a common scenario. It is also a common scenario for these projects to end in heartache.

At De Tullio Law Firm we often don’t meet these buyers until after they have purchased a property. They have usually spent way more than they expected and need to fix problems.

The best advice we can give you is to engage an Italian lawyer before buying a property to renovate in Italy. It will save you time, money and anguish.

A Renovation property in Italy: the right project for you?

No matter how experienced you are, a renovation project anywhere can be a stressful and time-consuming process. Even more so if you live overseas, can only visit Italy periodically and you are not a fluent Italian speaker. Unless a project is guaranteed to give you your dream home, or make you money, think carefully. You may be taking on the wrong property.

Make sure you know exactly what you are buying

Don’t wait to discover major legal issues such as lack of planning permission until after your purchase is complete. Having a lawyer means you have someone to work on your behalf to conduct thorough due diligence. Any legal non­-compliances will be detected before you complete the purchase.

In addition, your lawyer will assist you in obtaining a structural survey. A survey of the property will reveal important information about construction and building materials. It will highlight problems and remedial actions. Moreover, it will give you a good indication of the likely cost of renovations. It is also worth commissioning a measured survey of the building. This will give you a detailed set of floorplans and elevations on which to base your proposed renovations.

Builders

Even minor renovations can turn into a nightmare if your builders or subcontractors fail to do a good job.

Always ask for references, and speak to previous clients. Your lawyer can help you hire reputable builders and can act as project manager on your behalf throughout the project.

Buying a renovation property in Italy: costs

Work always costs more than you expect. This is because you can’t foresee some problems until renovations start. You may have to change your mind or alter designs or specifications.

Always include a budget contingency of 10 – 20% to cover unforeseen costs and fully expect to spend it.

Make sure your plans are as detailed as possible; list all the tasks and materials and, who is going to do the work. Don’t forget to allow for skips, scaffolding, tools and plant hire. Estimate costs by comparing similar projects in the area. Make sure you, and/or your lawyer, get builders’ quotes.

We would recommend that you instruct your lawyer to draft a building contract with your chosen builder. A building contract makes the builder’s quote legally binding.

Heed Italian rules and regulations when buying a property to renovate

Under no circumstances, should you ignore requirements of the Italian law, as it will eventually catch up with you. Do not undertake any work without first checking whether you need to satisfy requirements such as planning and building permits.

You may also need to notify neighbours or others regarding your renovation plans. Your lawyer can advise you if property deeds contain restrictive covenants, leases or other overriding interests in the property and land.

What are the penalties if you don’t follow the Italian law?

You may think that you can obtain the required planning permission retrospectively. However this is not always possible. Even if you can make  a retrospective planning application, it may be rejected. Your illegal work could then  constitute a criminal offence. In this case, the Italian State may seize your property. Getting your property back will likely be a very lengthy and costly process.

If you fail to obtain the relevant approvals, you will have to prove compliance. This may mean undoing completed work.

Breaching a restrictive covenant or the terms of a lease can lead to a court injunction, you may have to pay fines or even have to undo your renovations.

Before you can start renovations, you will probably need to do some demolition.  As building materials need careful disposal, demolition work is a procedure that will also require authorisation.

Finally …

With over 55 years of experience as specialist property lawyers throughout Italy, we strongly recommend that you seek independent legal advice before purchasing any property in Italy. If you have already purchased a property but have run into trouble and would like to discuss your situation, please get in touch. We can help!

 

You may also be interested in Building a House in Italy: a short step by step guide and our Guide to Buying Property in Italy. We also have a number of info videos on the subject of how to buy Italian property safely.

How to get a mortgage in Italy

Can foreign nationals get a mortgage in Italy even if they are not residents?

The short answer is yes. However, compared to foreign nationals resident in Italy, obtaining a mortgage in Italy is more complex for non-resident foreign nationals with an income from outside Italy.

There are fewer options when it comes to lenders who offer mortgages to non-residents in Italy, and receiving a negative response from lenders is not unusual.

It is crucial to follow the right procedures and seek advice from professionals. Providing a mortgage to non-resident foreign nationals differs from the domestic market. This is mainly because lenders put constraints on the level of mortgage borrowing. Usually, lenders will only offer mortgages of up to 60% of the property purchase price.

Lenders have to take a number of factors into consideration pursuant to the European Mortgage Credit Directive. These include the currency of your income and your age. Generally, the mortgagee should not exceed 75 – 78 years of age by the end of the mortgage term.

A lender will also take into account the level and the source of your income; whether you are self-employed or employed for example.

In addition, a lender will required proof of creditworthiness and that you have sufficient funds to make Italian mortgage instalment payments on top of any other mortgages and loans elsewhere.

What are the steps to getting a mortgage in Italy?

The first stage of the mortgage application procedure includes gathering documents. We would always recommend that you seek independent legal advice at this stage. Your lawyer will be able to advise you what documents you need, identify whether you qualify for a mortgage and how best to proceed with your application.

Usually, obtaining financial pre-approval from a mortgage lender takes 3 – 4 weeks in Italy. The second stage of the mortgage application involves due diligence requested by the lender. This will entail getting a legal report and a technical survey of the property you want to purchase. If technical and legal assessments are accepted by the lender, the mortgage application will progress to the lender’s final approval.

It is essential to highlight that the real estate you wish to buy with your mortgage must be habitable and in compliance with current Italian technical, energy performance and building regulations on the matter. In the event that finalising your Italian property purchase is contingent on obtaining a mortgage, it is vital that the property you wish to buy meets the stated requirements of habitability and technical regulations. You should also make sure that the preliminary contract reflects the fact that your purchase is subject to getting a mortgage.

Finally …

For over 55 years, De Tullio Law Firm has been providing international clients with independent legal advice. We offer services in all the major fields of Italian law with particular expertise in real estate and inheritance matters. Get in touch.

You may also like to watch our info videos on the subject of Italian property law.

Buying Property in Italy

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.

Property Prices

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.

Buying 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.

Reservation Offer

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.

Due Diligence

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.

Deposit

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.

Finally …

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.

Italian Real Estate Agency Services

An Italian real estate agency’s role is to connect vendors with buyers

The first step in purchasing a home in Italy is to look for properties that you like. For this, services of a licensed Italian real estate agency provide invaluable support.

An Italian real estate agency will facilitate property transactions. The agency will provide relevant information to buyers and vendors. However, Italian real estate agencies have no legal obligation to undertake searches of a technical or legal nature (due diligence).

Clearly, a lack of due diligence could in the first instance impact the transaction itself. Further down the line, if you didn’t conduct due diligence prior to buying, you might run into issues. You may discover the property lacks of full or partial planning permission or that renovations do not conform with building regulations. Crucially, a lack of due diligence may effect the future saleability of your property.

Italian real estate agencies in Italy are of course required to disclose information based on the principles of a professional duty of care. This implies an obligation to provide information on any circumstances or issues that potential buyers should know about. Imparting incorrect or false information to an interested party is illegal.

Italian real estate agencies have a duty of care

In 2012, the  Milan Court of Appeal heard a case regarding an estate agency’s duty of care: ruling no. 307 filed on 27th  January 2012.

Clients of a real estate agency took them to court on the grounds that the agent had failed to provide relevant information on adverse encumbrances on a property the clients wished to purchase.

The clients sued the real estate agent for a refund of the €6,000 commission fee they had paid to the agency. They argued that the real estate agency had been derelict in their duty of care. The clients claimed that the real estate agency should have communicated the existence of two mortgage transcriptions on the property. They maintained they would not have signed a reservation offer or a preliminary contract had they known. Signing the latter triggered the commission payment to the real estate agent.

The court dismissed the case.

The onus is on potential buyers to conduct pre-purchase due diligence

In support of the court decision, the judge stated that legal searches did not form part of a real estate agent’s responsibilities. In other words, technical and legal investigations, including land registry, planning, zoning and mortgage searches on a property do not form part of a real estate agent’s remit.

What does the law say about the scope of Italian real estate agency services?

Article 1759 of the Italian Civil Code requires real estate agents to notify parties of all known circumstances concerning a property transaction.

In this case,  the real estate agency had done this. They argued that as they had no prior knowledge of the encumbrances, they could not have informed the clients of their existence. The real estate agency had only become aware of the mortgage transcriptions when the clients informed them. The clients had only learned of the encumbrances when they were about to complete the sale.

There was no evidence that the real estate agency had any knowledge of the mortgages. The judge ruled they had not wilfully omitted to advise the clients about the adverse encumbrances. The responsibility for ascertaining this information did not lie with the real estate agent but, with the purchaser.

Article 1176 of the Italian Civil Code states that performance of checks and searches related to a property is not part of the agent’s professional duty of care. Furthermore, estate agents are neither legally responsible, nor qualified, to conduct in-depth due diligence.

Anything pertaining to the legal and technical due diligence of Italian property purchases should therefore be handled by legal and technical professionals.

Real estate agents facilitate the search for an Italian property

However, Italian real estate agents do not provide due diligence services.

When buying or selling a property at home, most people wouldn’t dream of entering into a transaction without the assistance of a lawyer and a surveyor. These are the professionals who conduct legal and technical searches and checks. Yet all too often, we meet foreign buyers who have decided to rely on what an estate agent tells them about a property.

Finally …

The reality is that a property transaction in Italy is an investment. It can quickly become costly – both financially and emotionally if things go wrong. In addition, there are the complexities of the Italian legal, tax and administrative systems. On top of this, there are the language barriers.

Essentially, in order to avoid any problems and before you sign any paperwork, you should engage an experienced, independent lawyer. The need for legal advice is far greater for an overseas transaction than when buying property at home.

De Tullio Law firm specialises in cross-border residential and commercial property transactions in Italy. We recommend that before you sign any paperwork with an estate agent that you seek independent legal advice.

Get in touch if you feel unsure about anything property-related and need advice.

 

You may also be interested in How to get a mortgage in Italy

Demolition order Italian Property. Voices of Experience

Voices of Experience: “I’m fighting a demolition order on my Italian Property”

Involved in an ongoing legal case to get a demolition order reversed, our client offers insights and advice on how to safely buy an Italian property.

If you are facing a similar situation and need help or if you have a story you would like to share, please get in touch with us. You might also be interested in reading our practical guides and checklists.

“They say hindsight is a wonderful thing. If I could turn back time and buy my Italian property all over again, I would do it completely differently. The following explains why. I hope that what I have learnt will help anyone thinking of buying a property in Italy”.

How to avoid a demolition order? Take care when buying property in Italy

The fact is that buying Italian property can be risky. A 2017 report by the Office for Italian Statistics (ISTAT), estimates that nationally, some 20% of Italian properties are illegal builds – more in the south of the country. On top of this, many legally built properties in Italy harbour significant liabilities that are not compliant with the law.

All this lies ready to catch out unwary purchasers, whose lives can become a nightmare. In the worst case, you could, like me, find yourself facing a demolition order and then find yourself investing a significant amount of money to fix problems. So, when buying property in Italy, you need to be very careful.

Back in 2005, I purchased a villa with a pool on the outskirts of a beautiful small town in southern Italy. It was love at first sight, the Italian dream. Admittedly, something of an impulse purchase. At the time, I asked the estate agent if there were any issues with the property and whether I needed to get some independent legal advice or a survey. He said not, so I didn’t. The sale went through very quickly and smoothly. I used the same notary as the vendor and estate agent and within weeks I was the proud owner of the villa.

A demolition order makes an Italian property unsellable

In 2015, I developed a few health issues. I decided to downsize and put my villa on the market.

Enquiries slowly trickled in and occasionally the estate agent brought potential buyers to have a look at the place. One couple, who really liked the property, hired a lawyer to check all the details. To my horror, they discovered that the property had no planning permission whatsoever. I had no idea that for a decade, I’d owned an illegally built property. Obviously, the couple’s lawyer warned them off buying the property.

At the time, I thought it must be some sort of mistake; an oversight at the local authority or a problem with the land registry. After all, how could the previous owners sell a property without planning permission? However, when I went to my local town hall to investigate, it transpired this was the case. Worse was to come.

To cut a long story short, after a protracted and very complex process, the whole situation eventually led to the local authority issuing a demolition order on my villa in 2018. I can’t tell you how many sleepless nights this has caused me.

I have a house that is unsellable and am having to spend thousands of Euros to get the demolition order reversed and remedy the situation so that I can at last sell up and move on with my life.

To buy property safely in Italy, exercise more caution than you would at home

Buying property in Italy can be safe. However, to buy a property that is both fully legally compliant and to make sure you aren’t taking on any legal liabilities, you need to exercise far greater care than you would at home.

Illegal buildings are not unusual in Italy. They are ticking time bombs potentially subject to a demolition order

There was a lack of a cohesive approach to building controls and regulations during the Italian building-boom of the 1970s and 80s. Local authorities, overwhelmed by the sheer volume of construction, were unable to check buildings properly.

Often illegal properties in the countryside started out as summer homes. They may be on land that has no zoning permission for buildings. The owners may have failed to get planning permission for the property when they built, extended or renovated it. In addition, the property may not comply with  building controls or building regulations. They may lack damp proofing, insulation and, often, any logical room distribution, let alone solid foundations.

Often an illegal Italian property doesn’t get demolished even though illegalities are blatantly obvious to local authorities.  There are many reasons for this including an erratic attitude to enforcing the law in Italy, local vested interests and even corruption. Illegal properties can be likened to a cash cow. Penalties, fines and demolition orders can suddenly be handed out, as and when a local authority needs money.

Because of illegal construction, many areas in the countryside have sprung up. These areas usually lack primary services such as mains electricity, water, sewage and telephone lines. They are prime candidates for infrastructure projects when local authorities decide to formalise these areas. Naturally, householders will bear the costs.

However, even in urban areas there are properties that should make you wary. Properties too close to a road or a beach or, in the case of apartment blocks, common areas that breach building regulations. Some villas may extend beyond their allowable habitable area. These type of problems are ticking time bombs.

Seek professional help when buying in Italy

Foreign nationals buying property in Italy can be incredibly naïve. Like me, many people do not use a lawyer to manage checks and conveyancing when buying an Italian property. Believe me, this can expose you to abuse or lead to the possible loss of your property or at least significant costs.

Estate Agents

Make sure your estate agent has a licence. Estate agents offer great support when it comes to looking for properties. However, they may not know everything about a property when it comes to any problems or liabilities. Plus they have a vested interest in selling the property. Their fees are contingent on selling so they don’t want a buyer to pull out of the purchase. When I bought my property in Italy, I asked the estate agent if I needed a lawyer. The estate agent told me I didn’t. Talk about innocents abroad! Start with the premise that the property you are looking at has a problem.

Get a lawyer

Appoint a lawyer before you even start to look at any property. And, choose your own lawyer rather than one your estate agent or the vendor recommends. Make sure that your lawyer understands property law, speaks your language, is registered with the Italian Law Association and has insurance.

Make sure your lawyer provides a written due diligence report and checks who owns the property and that there aren’t any debts such as mortgages on the property.

The report should also include all the details of the property and surrounding area. Land registry details should match property deeds.

Have a survey done

Is the structure sound? Do property boundaries in the land registry match those you can see from walls and fences? A qualified surveyor can confirm all this as well as checking whether there are any alterations to the property including out buildings.

Always get a check on the exact description of the property (existing bathrooms, bedrooms, kitchen(s), sitting rooms, conservatories, garages, out buildings, pool etc.) with your lawyer before signing any contract. To ensure there’s no illegal building work, it’s essential that all the details match the land registry.

If in doubt, don’t!

Don’t hurry and never sign anything without your lawyer’s approval.  Remember it is always better to lose out on a property rather than buy something illegal that risks risks fines or demolition.

Of course, the above does not include everything that you should do. The more information you gather, the easier it will be to make an informed decision as to whether or not to buy a property.

If you follow the guidelines above, I hope you will avoid all the costly worries I am currently experiencing. Be careless or too credulous and sadly, your Italian dream could turn into a nightmare some time down the line.

Finally …

De Tullio Law Firm specialises in cross-border property and inheritance matters throughout Italy. If you are buying an Italian property and need advice or support or, if you would like to discuss a matter with us, we are here to help. Get in touch.

 

You may also be interested in Changing layout of internal spaces does not require building permission

Real Estate in Italy: Reservation Offer

Real estate contract law in Italy

If you are considering buying real estate in Italy, Italian civil code in art. 1470 governs sales and purchase contracts for Italian real estate.

A contract is a consensual transactional instrument through which one party (the vendor) transfers the ownership, or a right, to an assets to another party (the buyer).

Contractually therefore, a buyer is under obligation to pay the agreed fee to the vendor for an asset or right.

Acceptance of a reservation offer for real estate in Italy

If you are not familiar with the legal and financial implications of the three-step property purchase process in Italy, you may wish to read our guide to buying property in Italy.

The first step to purchasing a property in Italy is a reservation offer

In effect, when buyers find an Italian property they like, they make a written offer on the property. Amongst other things, the reservation offer identifies the property in question and makes a price offer.

For the offer to be valid, first a vendor must accept the reservation offer in writing. This acceptance must then reach the potential buyer within a time frame stipulated in the reservation offer.

Contractual obligations of a reservation offer

Until written acceptance of a reservation offer reaches potential buyers, no contractual obligation exists between the parties. In other words, the reservation offer is revocable.

However, buyers may stipulate they wish to keep their reservation offer firm for a specified amount of time. If a vendor accepts the time frame, it means the vendor has an obligation to remove the property from the market. Because the vendor will not be able to market the property for the duration, the offer is known as, an irrevocable reservation offer.

Italian real estate agents: roles and fees

As in other countries, vendors in Italy often put their property in the hands of a real estate agency. The role of Italian real estate agents is to market the property to potential buyers. When a potential buyer makes an offer for a property, the real estate agent passes the offer on to the vendor. The estate agent does this through a reservation offer.

At this point, vendor and buyer are usually looking to move towards the second stage of the Italian purchasing process. This is where both parties sign a preliminary contract. If the vendor does not progress the sale to a preliminary contract stage, the reservation offer elapses and neither party has any obligation towards each other.

At the reservation offer stage, another aspect to consider is the estate agency commission. It is always worth asking if a real estate agent’s fees are negotiable. Generally however, commission ranges from 3% to 8% of the property sale price. Some agencies work on a fixed fee. To put that another way, fees are based on a percentage of the total sale price.

A reservation offer may not end in a sale

Between the reservation offer and signing a preliminary contract, buyers should carry out property checks and searches (due diligence). This may highlight problems or irregularities related to the property. These issues may subsequently lead to buyers withdrawing their offer.

The acceptance of a reservation offer between the seller and buyer is not therefore a guarantee it will end in a sale.

You should therefore be wary if the estate agency requests their commission at this stage.

At what stage should you pay Italian estate agency commission?

To clarify when exactly estate agents should receive their commission, a 2010 Supreme Court case is pertinent. In order for a real estate agent to be entitled to their fee, it is not sufficient that a broker merely puts vendors and buyers in contact. It is not enough to hope that the transaction concludes successfully.

In other words, commission is only payable to a real estate agent once a preliminary contract is in place between the vendor and buyer.

Difficulties linked to successful completion of a real estate transaction arise because there are so many pitfalls between the reservation offer and preliminary contract.

Contractual risks of real estate in Italy

To avoid risks, it is wise to seek independent legal advice before you sign any paperwork relating to buying property in Italy. To avoid any conflicts of interest, make sure you choose your own lawyer rather than a lawyer recommended by an estate agent or a vendor.

Your lawyer will guide you step by step through the intricacies of the Italian property purchase process.

Finally …

De Tullio Law Firm is an Italian Inheritance and Real Estate Law Firm present throughout Italy. We specialise in cross-border residential and commercial property transactions and inheritance matters in Italy. Should you need any further clarification concerning this or other property-related topics, De Tullio Law Firm will be happy to help. Get in touch with us at: info@detulliolawfirm.com.

You may also be interested in Insider Tips for Buying A Property in Italy. You may also like to watch our info videos.

Italian Luxury Property: Legal And Fiscal Definitions

What is a luxury property in Italy?

From a legal and fiscal perspective, the Italian luxury property category of real estate includes castles as well as certain types of property such as historic villas, mansions and palaces.

Before you sign any paperwork relating to a property, you should check its legal and fiscal category.

If you need advice on any aspect of managing property searches and checks in Italy, we can help.

Legislation relating to Italian luxury property

Italian law specifies purchase tax and annual municipal tax rates on luxury properties in Italy.

Contrary to what many think, luxury homes are not exclusively large properties – in terms of square meterage. Real estate location, cultural value and the quality of finishes also determine the classification of a property.

Buying a luxury property means that as a purchaser, you will not be able to take advantage of certain benefits relating to property registration tax.

Furthermore, once you own the property, you will not qualify for municipal tax deductions and exemptions.

Italian law uses two sets of guidelines to determine luxury property: Ministerial Decree 2/8/69 and cadastral criteria.

Luxury properties: Ministerial Decree 1969

According to this law, the definition of luxury real estate means a property must meet precise criteria. It must have at least one of the characteristics set out in the Ministerial Decree 2/8/69. These include: properties in areas which, according to town planning and zoning laws, are for villas or private parks.

Single-family homes, which sit on building plots of not less than 3,000 square meters. This category excludes agricultural areas, even if planning provides for the possibility of building residential properties.

Single-family homes with certain types of sports facilities. In particular, the law refers to swimming pools with a minimum area of 80 square meters and to tennis courts on drained ground extending to at least 650 square meters.

Single dwellings with a surface area of more than 200 square meters, excluding balconies, terraces, cellars, attics, stairs and parking spaces, that have an open area of land more than six times the covered area.

Individual real estate units with a surface area of more than 240 square meters excluding balconies, terraces, cellars, attics, stairs and parking spaces.

Properties on land where the value of the land exceeds the value of the property by at least one and a half times.

Even if a property does not have any of the above characteristics, there is a table attached to Ministerial Decree 2/8/69. This table states that a property can belong in the luxury property category if it has at least four characteristics among a list of finishes.

Specifications are complex and for the avoidance of doubt, we would advise you to seek independent legal advice.

The Ministerial Decree of 1969 is quite exhaustive in defining the characteristics of luxury homes. However, Italian legislation governing cadastral classifications also contains important indications.

Luxury properties: cadastral classification criteria

Article 33 of Legislative Decree 175/2014, assesses the cadastral classification of Italian properties. Its use is almost exclusively limited to assessing property tax rates. In particular for principal residences (prima casa).

For cadastral purposes, luxury properties are those belonging to the following categories:

A/1: stately homes – classical buildings with above-average finishes in areas considered valuable due to the presence of parks and/or gardens.

A/8: dwellings in villas. These are residential properties with fine finishes set in a park or a garden.

A/9: castles, palaces and mansions of outstanding cultural and historical and value. These mainly consist of single real estate units.

Italian properties belonging in these categories are luxury properties. Owners cannot therefore benefit from tax benefits and/or tax exemptions.

Finally …

Italian Luxury Property: a Legal and Fiscal DefinitionFor over 55 years, De Tullio Law Firm has been providing international clients with independent legal advice. We offer services in all the major fields of Italian law with particular expertise in real estate, inheritance and family law matters. Get in touch: info@detulliolawfirm.com

 

You may also be interested in Italian Property: Cadastral and Zoning Compliance

Homes for 1 Euro in Sambuca, Sicily (Italy)

Is it true that there are homes for 1 Euro in Sambuca?

To combat dwindling populations and to attract Italian and foreign investors to revitalise their areas, a number of Italian villages, towns and cities, have launched charm offensives by putting a number of houses up for sale for the symbolic sum of 1 Euro. Dream homes for €1 in Sambuca is the latest 1 Euro property scheme in Italy. This is how the Sicilian Municipality of Sambuca is promoting tourism and highlighting depopulation issues. Sambuca is in the Province of Agrigento.

News of €1 property sales in Sambuca spread further through a CNN article on 18th January 2019.  Local officials say, “It’s not the first Italian town to lure in outsiders with tempting offers but, Sambuca is scrapping red tape to make sure any interested investors can more or less make their purchase right away”.

As opposed to other towns that are merely doing this for propaganda, this city hall owns all the homes for 1 Euro in Sambuca on sale,” says Giuseppe Cacioppo, Sambuca’s deputy mayor and tourist councillor. “We’re not intermediaries who liaise between old and new owners. You want that house, you’ll get it in no time.”

Are there any conditions attached to the purchase of homes for 1 Euro in Sambuca?

New owners must commit to refurbishing their choice of the crumbling 40 – 150 square meter dwellings within three years. Renovation costs start at €15,000 (about $17,200). Owners will also need to cough up a €5,000 security deposit that will be returned once the remodelling is complete.

With the population dwindling, Cacioppo says the town needs outsiders to prevent it from falling into ruin. “We can’t afford to lose our lovely Arab heritage. Luckily, foreigners are lending a hand in this rescue crusade.” (Source: CNN).

1 Euro houses at auction

As with all 1 Euro house schemes around Italy, sales take place in public auction (vendita con incanto).

It’s impossible to tell what you are taking on just from looking at a few photos of a property.

In some countries house auctions are common. In Italy however, they are not. There are no legal packs, which contain essential information including official titles and searches, property information and planning permission. In effect, you are responsible for conducting property-related searches.

To avoid buying what seems like a bargain but, subsequently turns out to be a money pit, you should inspect the property before deciding to make a bid.

Finally …

While €1 properties may seem like a great opportunity, buyer beware! Conditions always apply.

There are plenty of other reasonably-priced houses in Italy without the terms and conditions attached to €1 property schemes. These properties may be a better option for you because you can undertake renovation at your own pace and on your own terms.

Before making any type of property investment in Italy, you should seek independent legal advice on matters such as ownership titles, zoning, planning, structure and conditions of sale and purchase.

If you are considering buying a property anywhere in Italy for 1 Euro, or more, please free to contact us via email or fill in our contact form.

 

You may also be interested in How to get a mortgage in Italy

Italian Property Transaction? Seek Legal Advice

Don’t Leave Your Italian Property Transaction To Chance …

When buying or selling a property at home, most people wouldn’t dream of doing so without the assistance of a qualified and independent lawyer. Yet in Italy, many buyers and sellers, particularly foreigners, decide not to instruct a lawyer and instead rely on an estate agent to advise them about their Italian property transaction.

Many foreign property buyers find their way to our law practice after encountering serious problems during or after their property transaction. Sadly, some have lost everything.

The reality is that buying an Italian property is an investment. You may not be familiar with the Italian language. Add to this unfamiliar legal, tax and administrative systems and procedures and you are looking at a very complex situation.

Essentially, the need for an experienced, independent lawyer is far greater for your Italian property transaction than when buying property at home.

Italian real estate agents are not qualified to provide legal advice

In many instances, an estate agency will offer to handle all the paperwork for a buyer. With registered and reputable agencies, the intentions are genuine and the conveyancing may well complete satisfactorily. However, estate agents are not trained lawyers. Many have no professional liability or indemnity insurance to cover you in case your property transaction goes wrong or if they miss something crucial.

Real estate agents act on a vendor’s behalf in an Italian property transaction

Also bear in mind that an estate agent is not independent. In fact, they have a potential conflict of interests in offering you advice. Remember that the estate agent is acting for the vendor.

The agent’s primary goal is to sell the property on the seller’s behalf in order to earn their commission. If the sale doesn’t go through because somebody spots an irregularity or a legal problem, the estate agent earns nothing. You, on the other hand, may face a potentially costly and time-consuming ordeal to sort out the issue. You may even expose yourself to prosecution.

Appoint a lawyer in your home country?

As an alternative, some clients look to instruct a lawyer in their home country. However, it is unlikely that the lawyer will have local knowledge of Italy. In addition, it is costly to fly a lawyer to Italy several times in order to conduct searches and checks and to attend completion at a notary’s office.

A lawyer overseas will in all likelihood subcontract the work to a local lawyer in Italy. This may be a lawyer who lacks experience and/ or expertise in cross border and Italian property law.

Because everything needs to go through a number of people, there will inevitably be delays with information and documentation. On top of this, both the foreign and local lawyers will expect to get paid, so in essence, you end up paying twice for the same service.

Finally …

De Tullio Law Firm specialises in Italian and cross border property, inheritance and family legal matters. We are regulated by the Italian Bar Association and a full member of STEP (Society of Trust and Estate Practitioners), the leading worldwide professional body for practitioners in the fields of trusts, estates and related issues.

Our knowledgeable, experienced and multilingual team of professionals manage client cases throughout Italy.

Our clients also benefit from De Tullio Law Firm’s Professional Indemnity Insurance. This is in place should something go wrong during an Italian property transaction due to negligence by our firm. Our clients can however rest assured that in more than 55 years of operations, we have never had to make a claim.

Why leave your property transaction to chance? Get in touch with De Tullio Law Firm. We are here to help make sure your Italian property transaction is a safe and smooth experience.

 

You may also be interested in Buying property in Italy

Buying An Italian Property. A Short Guide

This short guide aims to cover the key elements of the Italian purchasing process

For a more in-depth explanation, you may wish to read our comprehensive Italian Property Buying Guide.

Buying an Italian property proceeds through 3 key stages:

– Proposta irrevocabile d’acquisto (Reservation offer)

– Contratto preliminare di vendita (Preliminary contract)

– Atto di vendita (Deed of sale)

Once you have chosen your property you should engage the services of a solicitor, whether you buy through a real estate agent or directly from the vendor.

The knowledge that an Italian solicitor has about Italian real estate law is invaluable – plus, your own solicitor is there exclusively to look after your interests.

The first stage. Reservation offer

When buying an Italian property, the first document you will have to sign is a, “proposta irrevocabile d’acquisto” (reservation offer). This is normal practice when purchasing through an estate agent

In contrast, when purchasing directly from the seller (a private sale) a reservation offer is unusual. The implications of dispensing with a reservation offer is one of the many reasons why you should seek legal advice.

By signing the proposta irrevocabile d’acquisto, you secure the removal of the property from the market for a limited period of time, normally 15 days.

It is important to highlight that a reservation offer is only binding upon the buyer when formal written acceptance of the offer has been received from the vendor. Once the agreement has been signed by both parties, it becomes a legally binding contract.

First deposit

You will need to pay a small deposit, which is normally held by the estate agent or solicitor until the vendor has formally accepted the reservation offer.

Should you finalise the purchase, this deposit becomes a part payment of the purchase price. If the seller does not formally accept the offer, your deposit will be refunded.

Due diligence

While the property is off the market, your solicitor, assisted by a surveyor, will make all the necessary searches to ascertain that the property doesn’t have any debts, mortgages, claims etc. Due diligence checks and searches ensure there will be no unpleasant and possibly costly surprises during or after the purchase.

The second stage of buying an Italian property. Preliminary contract

Normally at this stage, buyer and seller having agreed to go ahead with the conveyance, will formalise their agreement through a “contratto preliminare di vendita” (preliminary contract)

Some estate agents (and especially in the case of private sales) choose, or recommend, leaving out this part of the purchase process. However, this legal document really is essential. It sets out the detailed terms and conditions of the sale.

Estate agents often use boilerplate preliminary contract templates. These may not be suitable for your personal situation. Your purchase may be subject to certain terms and conditions. For example, you may have come across some structural issues during due diligence and want to make your purchase contingent on a surveyor’s report. This condition would need to be in the preliminary contract. A solicitor can draft the contract, or at least to examine the estate agent’s template and advise you on any implications before you sign it.

Second deposit

One of the essential legal elements of the preliminary contract is the payment of a deposit (caparra confirmatoria). This is normally equivalent to a minimum of 10% of the purchase price.

If you back out of the contract without a valid legal reason, you will lose this deposit. On the other hand, if the seller changes their mind about the sale, they will have to refund your deposit in full. You would also have the right to claim an amount equal to the deposit through the Italian courts.

In the preliminary contract, the parties also set the date to finalise the conveyance in front of the public notary.

The third Stage of buying an Italian property. Completion of the sale

By law a notary must oversee Italian property transactions. The notary is a public official who has State authority to validate contracts transferring the ownership of a property. The notary is also responsible for paying all land registry fees and cadastral taxes.

A notary must remain absolutely impartial

A notary may not therefore offer legal advice to any party involved in a property transaction. The notary cannot therefore act as a substitute for a solicitor in terms of representing the interests of the buyer.

In order to ensure you have proper legal safeguards, the only way is to engage the services of an independent solicitor. Only by having your own solicitor, can you be confident that no unpleasant surprises will be revealed at this late stage of the purchase process.

Deed of sale

Buying an Italian property concludes with the, “atto di vendita” (deed of sale).

The deed of sale is drafted by the notary and has to be fully compliant with the preliminary contract. In other words, the preliminary contract dictates all the essential elements of the transaction.

Translation

Should any of the parties not understand the Italian language, Italian law requires a translation of the deed of sale. Unless you have an Italian solicitor who speaks your language, the notary may also require that a qualified translator be present at the signing.

Unlike a translator, the advantage of having a solicitor with you is that should any last-minute legal issues arise at the signing, your solicitor will be able to immediately resolve these.

You should be aware that the Italian version of the deed will prevail in a court of law if any issues arise at a later stage.

Signing day

On the appointed signing day, all parties to the transaction convene, usually at the notary’s office. The notary reads the deed aloud and all parties then sign it in front of the notary. Once signed, the buyer pays the balance of the purchase price to the seller and the new owner receives the keys of the property.

New owners can collect a copy of the deed from the notary approximately one month after the signing. It takes approximately one month to register the deed at the relevant land registry office.

If the buyer cannot be present to sign the deed of sale in front of the notary, the buyer can give a power of attorney to their solicitor. This will permit the solicitor to sign the deed of sale on the buyer’s behalf.

Finally …

As a general rule, it is wise to familiarise yourself with the legal framework regulating international property sales.

For over 55 years, De Tullio Law Firm has been providing international clients with independent legal advice throughout Italy. We are specialists in cross border property, inheritance and family law.

If you would like further information about buying an Italian property, we are here to help. We can guide you through the whole process or even organise the whole process on your behalf. Get in touch with us for a free preliminary consultation.

Buying an Italian property. Glossary
  • Proposta irrevocabile di vendita: An initial formal offer with a small deposit. It contains the price you are willing to offer and any conditions.
  • Contratto preliminare di vendita: This contract sets out, in detail, the terms and conditions of the sale and also all the relevant cadastral and land registry information. Also called a, “Compromesso”.
  • Caparra confirmatoria: Italian Civil Code regulates this deposit under art.1385 of the. If a deposit is defined as a “caparra confirmatoria” its payment gives rise to legal rights and obligations on both parties.
  • Atto di Vendita: All parties sign the deed of sale in front of a public notary. The buyer makes outstanding balance of payment and receives the keys to the property. Also called a, “Rogito”.