Buying a property in Italy: a fundamental guide for foreigners
Foreigners who want to buy a property in Italy must meet the following conditions:
- if the foreigner is not regularly staying in Italy: an international treaty is necessary to allows it or it is also possible in case of reciprocity (ie in the Country of origin of the foreigner an Italian is allowed to buy a house);
- if the person regularly stays (for family members or stateless persons in Italy for less than three years), a residence permit or residence card is required;
- for EU citizens and EEA Countries, as well as stateless persons residing in Italy for more than three years, there are no limits.
Buying a property in Italy: the first steps
When you decide to buy a property in Italy (or if you want to buy a property abroad), once you choose the property among the many on sale, you must submit a "purchase offer" which contains the main terms of the transaction between seller and buyer (name and surname of the parties, date and place of birth, description of the property, land registry details, year of construction, planning compliance, habitability, the agreed price, payment methods, amount of the deposit, etc.).
If the proposal is accepted by the seller, then a preliminary purchase agreement (compromesso / preliminary contract) must be signed and a deposit paid by the buyer to the seller (equal to 10-30% of the total value of the property).
The preliminary contract, which must be in writing, contains all the conditions included by the parties in the purchase proposal and it has the sole purpose of obliging the parties to transfer, afterwards, the ownership of the property, but it does not entail the purchase of the same property.
The final sale contract (final deed) will be subsequently stipulated before a Notary Public who, after having read the document and invited the parties to sign it, will transmit the information concerning the sale to the competent State Bodies and the Land Registry Office for registration purposes.
The Italian notarial deed must be accompanied by the certified translation of the Italian text done by an official translator (who may also be the Italian notary who knows the foreign language), unless the foreigners who purchase do not declare that they do understand and read perfectly the Italian language.
The original copy of the certificate of ownership must be delivered to the purchaser.
In those cases where the notarial deed is stipulated a long time after the signature of the preliminary contract, it is advisable to register it at the Land Registry office, in order to protect you from possible legal proceedings against the seller, such as any foreclosure of the house which is object of the sale.
Buying a property in Italy: taxes to be paid
Anyone who decide to buy a property in Italy, for whatever reason, has to pay the due taxes.
The Law n. 147/2013 has merged all the taxes originally requested on a property with a IUC (unified municipal tax), which includes the IMU, the TASI and the TARI.
IMU: it is the unified municipal tax payable by those who own a property, with the exception of the non-luxury homes used as primary residence, for which it is not due.
TARI: it is the tax due on waste, imposed on those who actually use the property for consideration or for free.
TASI: it is the tax due on indivisible services to cover the costs incurred by the Municipality in order to guarantee the supply of services such as lighting, roads and gardens.
The deadline for submitting the IUC declaration is the 30th of June of the year after property acquisition or lease of the premises.
The buyer, at the time of the purchase, is required to pay the costs for the notarial deed (proportional to the sale value), in addition to the registration tax, cadastral tax and mortgage tax, if the property is purchased from an individual. If, however, the seller is a company, the value - added tax (italian VAT) must also be added to the price agreed between the parties.
Buying a property in Italy: how not to pay taxes on the house
If you decide to buy a property in Italy, and this represents your first house (your primary residence), you will be entitled to a series of benefits provided that:
- the property you are purchasing falls into specific land registry categories;
- the property is located in the Municipality where the buyer has already his residence or intends to establish it or also where he works;
- the buyer meet the requirements, such as not being the owner of another property situated in the same Municipality and not being the owner of any property rights in the State.
These benefits consist of a reduction of the registration tax or VAT, depending the purchaser is a private individual or a company. Furthermore, the registration tax, the special cadastral taxes, and the mortgage taxes on the deeds subject to the registration tax and those necessary to fulfill the obligations in the land registry and real estate registers are not due.
Therefore, the following are the taxes to be paid by a private or a company exempted from the VAT payment who sells a property:
- the proportional registration tax of 2%;
- fixed mortgage tax of 50 euros;
- fixed cadastral tax of 50 euros.
If a property is sold by a company (whose sale is subject to the VAT payment), the the buyer shall pay the following taxes:
- VAT at 4%, instead of 10%;
- fixed registration tax of 200 euro;
- fixed mortgage tax of 200 euro;
- fixed cadastral tax of 200 euro.
The said benefits are also extended to foreign citizens who want to buy a property in Italy, provided that they meet the objective and subjective requirements pursuant to the relevant legislation.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.