Buying a House in Italy. The Stages of Purchase

Stage One – The Offer and the Prenotazione

Once you have seen a property you like, then before making an offer, do the following:

• Get an English speaking lawyer who will act in your interests
• Find out how long it has been on sale. In Italy it is quite common for a house to be on the market for many months, even years! Have a look at dates on photos.
• Look it up on the internet and see if it is on with other agents at different prices. If it is with another agent more cheaply, then this price has to be the starting price for negotiation.
• Many vendors in Italy set their own prices. Check similar properties on the internet to get a feel for typical pricing of similar houses. Properties are often valued per square metre depending on location and type. If in Italy, you can look at a magazine like Ville e Casali for going rates.
• Find out if the property has one owner or multiple owners (e.g. relatives who have inherited the house). Multiple owners can spell trouble.
• Arrange for a survey. This is not common in Italy so find an English speaking geometrà (architect/surveyor) to do this who understands the type of survey you require. Ask your agent to check with the catastale the plans of the house, what land is included and whether all buildings and rooms in the building have planning permission and the land said to be included is actually registered to the property.
• Make your offer. The agent may suggest you secure your interest and written offer with a small down payment as a gesture of good will. This document should place a time limit on the transaction and state the conditions.

Stage Two – The Preliminary Contract – Il Compromesso

This is done in the presence of a notaio and is a legal document which details the agreed price, what is included in the sale, what is expected of buyers and sellers and the date agreed for the final contract. At this stage you pay a deposit (una caparra). This is usually between 10 and 20% of the purchase price. If there are multiple owners, make sure they all sign the compromesso. Once signed, if you pull out you forfeit the deposit and if the seller pulls out he has to repay you twice the deposit, so this agreement is taken very seriously.

Stage Three – The Final Contract – Il Rogito

Between the compromesso and the final contract, the usual checks are carried out, but in Italy this includes the prelazione. This gives third parties (farmers) with land immediately adjoining the property 30 days to match your offer. They have first refusal, as do sitting tenants and people who do business from the property. One way of avoiding a prelazione is to buy the property through a limited company. Ask your lawyer about this.

It is usual to be present at the rogito, but you can give someone power of attorney to act for you. You’ll need official id (e.g. passport) and your codice fiscale (Italian tax code). Oh, and money, in the form of bankers drafts or even cash. The process involves all the parties plus notaio, geometrà and possibly the estate agent. It is a good idea to have a translator present if you don’t speak good Italian.

It used to be very common too under-declare the value of the house on the deeds to avoid paying high taxes. The difference was paid to the vendor in cash while the notaio had a little coffee break. This is now less common as the authorities have been tightening up, but it is still done in some places. Remember if you sell your house within five years you will be liable for capital gains tax and so if you declare a very low price on one set of deeds but the new buyer wants to declare everything on the new deeds then you will appear to have made a much larger profit than you really have. It always pays to declare the true price on the deeds.

Fees

A good rule of thumb is that purchase costs add about 15% to the price of any property you buy. Here are the main fees you pay:

• Notaio – based on the declared value of the house
• Stamp duty – around 7% Local tax – between 0.4% and 0.8%
• Real Estate tax – 3% Geometrà fees
• Estate agents fees – usually 3% (yes the buyer pays too!)

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