Buying property in Italy

When setting your budget, it's advisable to consider the purchasing costs (agency fees, notary fees, stamp duty/land registration costs, technical report costs, etc.).

Under Italian law, real estate agent fees in Italy are payable by both the buyer and by the seller (our standard fee is 4% +IVA for the seller and 4% +IVA for the buyer).

The overall cost of purchasing property in Italy depends on the purchase tax rates applicable to the particular asset and whether the seller is a corporation or a private individual. The estimated total percentage cost of a typical re-sale property to a non-resident buyer in Italy is approximately 9% of the fiscal value of the property. For new-build purchases, properties classed with an 'A' rating on the Property Register purchased from a company will have 10% VAT replace this purchase tax, with exception for properties classed with an A1, A8 & A9 rating being purchased by a company will have 22% VAT of the purchase price applied.

As a very general indication, total purchase costs can amount to c.10-12% of the purchase price. Please get in touch to learn more.

We work hand-in-hand with our local partners to ensure that your time spent viewing properties is productive and enjoyable. By consulting with you in advance of your visits, we can ensure that we show you the most suitable properties to match your criteria.

When viewing properties, our local partners would be delighted to share with you their experience and insights into the local area. This allows you to make a fully informed decision when you do find the right home.

Once you have identified a property of interest, our team will be on-hand to share their experience in the negotiations and the purchasing process.

In certain circumstances, the buyer will be asked to confirm their intention to purchase in the form of a written offer letter (Proposta d'acquisto). To prepare the offer letter, the agency will request a proof of identity (e.g. passport) and proof of main address. This offer letter will include the offer price, details of the property and seller, details of the buyer, any associated conditions of purchase (e.g. mortgage, survey, etc.), and a proposed timeline of the transaction (e.g. proposed signature dates for exchange and completion).

Once the offer letter has been signed by the buyer, it will be sent to the seller for their agreement and counter-signature. Upon signature, the seller is contractually bound to the terms stated therein, which helps prevent the seller from entering into another sale agreement during the agreed timeframe.

Importantly, this offer letter can also act to bind the buyer who may not withdraw without penalty or cause until the next stage of the transaction, depending upon the conditions outlined within the offer. Great attention and ideally legal counsel should be obtained as the offer, if accepted, might become a fully binding contract under Italian law.

Upon the signing of the offer letter, the Notary will be chosen by the buyer. Their role is to ensure the law is applied correctly and that the interests of both parties in the sale/purchase are protected. Notary's fees are payable by the buyer.

Once a Notary is instructed, they will collate information from the parties and carry out the relevant searches, check title registration, advise on consistency with planning permission records and check for any agricultural pre-emption rights (if applicable) or state pre-emption rights (where the building is registered as a historical monument), review the surveyor's report of the property and prepare the preliminary contract (Compromesso).

During this period, the buyer should instruct a technician, such as an engineer, architect or surveyor (Geometra) who will check that the property object of the sale complies with town planning and land registry regulations.

During this period, the buyer may wish to instruct other professionals such as a surveyor (to supplement the existing diagnostics report) or a legal/tax surveyor. We are happy to provide suggestions for these as necessary.

The Notary will also provide a breakdown of the costs of purchase whilst preparing the preliminary contract so it’s clear exactly what to expect.

The notarised preliminary agreement of purchase (Compromesso) may, in some cases, be conditional on specific events, that once achieved, has the legal effect of fully binding all parties. The Compromesso does not transfer title but sets out all details of the sale and enables the seller to gather the required documentation and the buyer time to prepare funds for the purchase.

Usually a deposit is exchanged at Compromesso. In particular circumstances, the deposit is entrusted to the Notary and is held in escrow.

The notarised Compromesso will grant full protection of the buyer as the Compromesso will be registered as a lien in the Registry of Property Titles. The drafting of the Compromesso is entrusted to a Notary.

The buyer must have obtained an Italian tax code number (Codice Fiscale), the agent/lawyer can help in this process. Further tax advice should be sought as to the advantages/disadvantages of becoming a resident in Italy and appropriate vehicles for ownership.

If renovation work is planned, which is subject to strict regulations under local planning rules, please note that permissions can take approximately a year (sometimes less, but under certain circumstances even more), so the earliest involvement of an architect/surveyor (Geometra) is also advisable.

Completion of the sale (signature of Rogito Notarile) takes place at the Notary’s office. The signature of the final contract can be executed by power of attorney/proxy by prior agreement.

It will be necessary to transfer the purchase balance, agency fees, Notary’s fees and taxes prior to signature. After the signing of the contract, the Notary will record the transfer of title in the Title Office.

Income tax is payable in Italy by all property owners (private individuals) on the theoretical rental income of the property during the year; non-residents in Italy are subject to this tax only if the income exceeds a certain threshold.

IMU is a property tax based on the theoretical rental income of the property and is collected by the local authority twice a year.

Capital Gains Tax is not payable in Italy for private individuals if the disposal of a property takes place more than five years after the purchase.

All foreign owners are advised to draw up an Italian will.

The standard IVA rate in Italy is currently 22%.

This note is meant to give a very basic indication of the purchasing process. No liability is assumed as each interested person should seek local professional advice.

A property in Italy may be acquired and held under a private name, in the name of a domestic or foreign corporation, or even by a trust. The choice of ownership vehicle is a sensitive decision, as it can affect both income and transfer taxes, and should be discussed with a legal or tax consultant.

The decision must also take into account the intended use of the property, inheritance considerations, disposal plans and other relevant factors.