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Purchasing a property in Italy
CASA IN TOSCANA® is pleased to be able to offer you a variety of professional services which are designed to guide you through every aspect of the location, purchase and maintenance of a property in Italy. We believe that an informed buyer is the best kind of buyer. The following information surveys the most important aspects of the process of purchasing a property in this country. The more you know about this process, the more enjoyable and satisfying your experience will be.
- Remember, Italian law does not place any legal restriction upon the purchase of property within its borders by non-citizens.
- In the case that the buyer chooses to use a real estate agent in order to locate a property and to negotiate its sale, the buyer should make certain that the agent is licensed to conduct business by the local Chamber of Commerce.
- Generally there are four phases which comprise the purchase of property in Italy:
1. The proposta irrevocabile d'acquisto (irrevocable offer subject to contract)
At that time when a price and all other items regarding the purchase of a property are fixed or nearly negotiated by the prospective buyer and seller, a written proposta irrevocabile d'acquisto is forwarded by the real estate agent to the vendor. When a buyer expresses the intention to acquire a property his/her offer is never quite enough from the seller’s point of view. This is why a deposit to the seller of approx. 5% of the offered price is an effective tool to entice the other party to reach a final agreement and to start the transaction. This deposit confirms the buyer's intention to purchase the property and prevents the seller from initiating any further negotiations with a second party. With the signing of this document and the acceptance by the seller, both parties become legally obliged to sign a contratto preliminare or a compromesso ("preliminary contract").
2. The contratto preliminare or compromesso (preliminary contract)
When the prospective buyer signs the compromesso (so called, when generated by the realtor) or the preliminary contract, when generated in front of a notary, he/she is legally bound to purchase the property in question. The preliminary contract is itself a standard Italian contract which provides a description of the property and its structures as they appear in the local Nuovo Catasto Edilizio Urbano e Terreno ("real estate and land register"). In it, the seller warrants that the property is unencumbered by financial and legal liabilities. The seller also must assume complete liability (the terms of which vary per contract) should encumbrances arise from the previous ownership of the property which were not made evident and subsequently expunged at the time of the signing of the compromesso.
At this time, a local notary who represents the particular commune within which the property is located, completes an historical review the local real estate registry, (the Registro Immobiliare), in order to determine a legal description of the property, the legal status of the property and any changes to such items which have occurred within the last twenty years to present.
The preliminary contract provides the official record of the price of the property and the various dates according to which the property will be paid for:
- The final date being the closing of purchase. At the time of signing the preliminary contract, the buyer pays usually between 20% and 30% of the price of the property, with the remainder of the purchase price paid out over mutually agreed upon settlement dates. This amount is normally paid to the seller. If a primo acconto was made by the buyer (the buyer may, if he or she chooses, simply begin the purchase process with the signing of the preliminary contract), this primo acconto will be factored into the calculation of the remaining amount due for the purchase of the property.
- the deposit or caparra, which is made at the time of the signing of the preliminary contract, secures the terms of purchase for the buyer and serves as security for the seller. Should the buyer be unable to fulfill the terms of the preliminary, the buyer will lose the entire amount of the deposit including the primo acconto. Should the seller decide to terminate the preliminary or should circumstances of the seller's making force the seller to terminate the preliminary, he/she must pay the prospective buyer twice the deposited amount as penalty. (= caparra confirmatoria)
- The estate agents essential task is fulfilled as soon as the purchase is protected by the preliminary contract. Real estate agents in Italy operate with a split fee between seller and buyer which is between two per cent and three per cent (plus VAT) of the purchase price, being paid by each party.
3. The final contract
Within 1-3 months of the signing of the preliminary (this date has been agreed to within the preliminary itself), the final contract is signed by both buyer and seller. At this time, the final payment or sum of payments for the property is submitted and title to the property is officially transferred to the buyer.
- Italian purchase taxes have been changed in 2007. Since 2007 the tax was fortunately lowered for individual persons, who are purchasing a property in Italy. When an Italian or a foreign purchaser who does not own other properties in Italy, acquires a property for residential purposes and takes official residency in the municipal area where the property is located, the tax levied on such purchase amounts to 3% of the tax value ( = valore catastale) of the property. This tax value is usually much lower than the purchase price.
- In any other circumstance, as for a “second home”- purchase the property tax amounts now to 10% of the tax value for the building and 17% for the land.
- In addition to the purchase tax the buyer pays the notary fee which is based on the sale price and which is contemporarily paid to the notary with the signing of the contract.
Annual taxes and fees
- The annual property tax is called the "ICI" ( Imposta Comunale sugli Immobili ). This tax is a municipal tax which is determined by the size of the property (including the surrounding land) and the quality of the structure(s) on the property (whether a single apartment, independent house or a luxurious villa). Normally, this tax is not very high. This tax depends on the different municipal and it ranges between 0,5% and 0,7% of the registered or tax value.
4. Sales - and after sales service
- All the administrative work such as the changing of contracts for telephone, electricity, town water and other town services is provided by CASA IN TOSCANA® which will accompany you for at least a year after the purchase to help you.
CASA IN TOSCANA® di Nikolaus F. Barnewitz