Italy

Relative to an extraordinary past, Italy is the perfect location for anyone wishing to own a property and be amongst incredible history, art, architecture and cuisine.

The choice of homes here are endless, from Lakeside towns, through beautiful countryside, to the Italian Riviera on the Mediterranean. Italy comprises of twenty different regions each with its own individual character. In the North, the region of Veneto covers the Dolomites, Verona, Padua and Venice. Most US and UK visitors are familiar with the landsccape of Tuscany, especially the world famous Campo dei Miracoli (leaning Tower of Pisa) and the shops on the Ponte Vecchio. The sense of history is pervasive and it is impossible to choose between the architectural delights of Rome, fashion in Milan, the sight of Pompei, the sophisticated city of Naples and the Amalfi Coast. Calabria has long been popular with Italian tourists and is recently come to the attention of overseas tourism and developers due to its fantastic year round Mediterranean climate and endless sandy beaches.
We have a cross section of property available here but should be looking for a specific, such as an investment property in one of the major cities then please contact us.

Why Italy

• Emerging market in an established country
• Comprehensive National Health Service (SSN)
• 8500km of diverse coastline
• Italy is the 4^th largest economy in the world
• Unrivalled artistic, musical and architectural heritage
• Stunning natural beauty
• One of the most popular beach destinations in Europe
• Prices are relatively low compared to the rest of Western Europe
• World famous wines and gastronomy
• Only 2.km hours flying time from Uk, Ireland and many other European countries. 3.5hrs flying time from Russia

The Buying Process

Although the buying procedure in Italy is relatively straightforward, we strongly recommend that you appoint a reputable international law firm who will check the legal status of the property you wish to buy.

Offer of purchase and preliminary sale agreement

The buying process begins with an offer of purchase signed by both the parties, containing the details of the property, the agreed price and the terms and conditions of payment.

The offer of purchase has the purpose of taking the property off the market for usually 30 days. A sum of 3.000 Euro is required by the buyer along with the signing of this agreement, which binds the developer not to negotiate the sale of the same property with other potential clients over the mentioned period.

After that and by 30 days (under penalty of non refunding of the mentioned 3.000 Euro), the parties will sign a preliminary sale agreement, which is a crucial step of the whole procedure.

There is a reason why almost every purchase in Italy follows the scheme preliminary sale agreement/deed of sale: this is because, despite the name (preliminary), such an agreement is the most legally binding one which Italian Civil Code provides for and regulates.

In fact, according to art. 2932 c.c., the preliminary sale agreement is enforceable through a judicial order should one of the parties decide not to fulfil

The content of the preliminary sale agreement

The preliminary sale agreement selling off plan properties has been fully regulated by a recent law (d.lgs. 122/2005), whose main purpose is to protect the position and the investment of the buyer.

Every preliminary sale agreement must contain:

• detailed cadastral description of the land;
• ownership of the land and related title deed(s);
• good standing of the land (mortgages and any other legal burden have to be fully detailed, if any);
• planning authorizations issued (lotting out authorizations – if required, building permission);
• duration of the building works and exact time when the property will be finished, transferred and handed over.

According to the said regulation and as to this last point, although a prior issuing of the building permission is not mandatory, any preliminary sale agreement may be legally signed if the developer has at least applied for the issuing of the building permission (in this case, the registration number of the application must be detailed in the agreement).

In addition and with regard to the features of the future property, the preliminary sale agreement must also state a full description of the property. Any contract must therefore has as annexes:

• a plan of the entire development
• a plan of the single building unit
• a detailed description of the building specifications, which the developer should carefully follow during the building works.

The payment of the deposit and the guarantee

Along with the signing of the preliminary sale agreement, the buyer shall pay a deposit called “caparra confirmatoria”, usually in the region of 40-50%. Such a sum will be obviously deducted from the total price but, should the buyer decide not to complete the purchase, it will be legally retained by the developer as a compensation.

A substantial protection for the buyer is offered by a bank/insurance guarantee running over the construction works.  To be valid, it should respect the following features:

it is mandatory and included in the purchase price: a preliminary sale agreement which does not come with this bond is null and void and, in addition, the developer is not entitled to charge an extra fee for it;

it must be issued by a bank/insurance company licensed for this purpose by the Ministry of Economy and registered at a specific Registry held by the Bank of Italy;

• it must cover all the sums paid by the buyer to the developer until the signing of the deed of sale;
• it covers the event of developer’s bankruptcy or financial crisis;
• it must contain a clause stating that, should the developer go bankrupt, the insuring company shall pay the due sums within 30 days directly to the buyer, without any prior need of legal action against the developer for the recovering of the sums (which would take years).

Should the guarantee provided by the developer not to fulfil the above terms and conditions, the preliminary sale agreement must be considered null and void.

The completion and the deed of sale

It is important to clarify that the preliminary sale agreement has not the purpose to transfer the property (which actually does not exist yet), but only to create a reciprocal obligation between buyer and developer/vendor. The property will be transferred at the signing of the deed of sale.

The deed of sale (“rogito”) is the agreement through which the property, once completed, is transferred to the buyer. It must be drafted by a Notary, a public officer acting on behalf of the state and in the interest of both the parties.

Once signed, the deed of sale will be handed over to both the parties and registered at the “Conservatoria dei Registri Immobiliari” (the competent Registry), while a further copy will be stored in the Notary’s archive. The deed of sale will prove the ownership of the property.

According to Italian Law, only those parties who have an accurate knowledge of the Italian language are allowed to sign the deed of sale in person, because it is mandatory for every party to fully understand the legal implications arising from the contract. Foreign buyers who do not speak Italian have therefore two choices:

• they may appoint a translator who will be before the Notary translating the content of the contract and the will of the parties; in this case, they are allowed to sign the deed of sale;
• they may appoint an attorney (preferably a lawyer) in order for him to sign the deed of sale on their behalf; in this case, their presence before the Notary is not necessary.

Taxes

Taxes and expenses connected to the purchase

All the taxes due for the purchase will be collected by the Notary on behalf of the state at the signing of the deed of sale.

Four are the taxes to be paid at completion:

• I.V.A. (V.A.T.): it is due in the region of 10% of the purchase price. If then the buyer intends to transfer his residency in Italy and that property is the first one in the country, VAT due is just 4%. In this case, the buyer should get the residency within 18 months.
• Imposta di Registro (Registry Tax): 168 Euro, whatever the value of the property is;
• Imposta Ipotecaria (Mortgage Tax): same as above. Such a tax is due regardless of the fact whether the property has been purchased through a mortgage;
• Imposta Catastale (Cadastral Tax): same as above.

In addition, Notary fees have to be considered.

Notary fees are set out by the National Counsel of Notaries in relation to the value of the property. They may be calculated in the region of 2% of the purchase price.

Income Tax. A person not resident in Italy still has to make an annual declaration, for tax purposes, for the income in relation to activities in Italy (an example of this will be the income deriving from letting the Italian property). It will be possible to set off certain expenses against that income – repairs, management expenses, local taxes etc. This income will have also to be declared to the country where the buyer lives.

I.C.I. A local council tax to be paid by anyone who owns property or land in Italy, unless the owner is resident in Italy and that property is his own first one. The amount of the tax is calculated by reference to the “rendita catastale” (official value of the property) registered in respect of all properties in Italy. The official values are approximately between 0.4% – 0.7% of the official value of the property. The actual rate is set out by the local Municipalities depending on the size of the property, location, class and category. ICI is paid in two instalments in June and December.

Capital Gain Tax. It is not applicable if the owner sells after five years’ ownership. In case the owner sells prior to five years there will be a charge on a sliding scale depending on the number of years of ownership.

Wealth Tax. There is no Wealth tax in Italy.

Other information

Codice fiscale. A “codice fiscale”  (fiscal identity number) will be required to go to completion, to obtain the mortgage, to open a bank account, to become Italian resident. It may be obtained by the local “Agenzia delle Entrate” (Tax Office) or by any Italian Consulate abroad.

Banking. Opening a bank account in Italy is recommended. It will be useful to pay the utilities bills and for the payment before the Notary Public at the final deed.