15 Essential Steps to Buying a Property in Italy
One of the world’s top five second-home destinations, Italy draws international interest with its gorgeous beaches, lakes, vineyards, and flat tax policy.
Purchasing Process Duration: 6 months
Transaction Costs (for Luxury Real Estate): 28-30%
Golden Visa Status: N/A
Italy is becoming a hotspot for high-net value individuals looking for a second home they can enjoy and also earn an income from. Research from Knight Frank’s Global Buyer Survey recently ranked Italy as one of the world’s top five second-home destinations, with European and North American buyers particularly enjoying the beautiful lakeside lodges, snow-decked cottages for skiing and untouched beaches of the region.
Italy’s flat tax policy has drawn interest from non-nationals, as it allows overseas residents (irrespective of their citizenship), who move to Italy and become Italian tax residents, to pay a lump sum form of taxation on all non-Italian sourced income for up to 15 years.
Recognised as a largely “no restrictions” country, property purchases in Italy are quite straightforward for non-nationals but can take up to 6 months to process.
It is essential you acquire the right professional help, in the form of specialized solicitors and wealth management advisors, to streamline the process and ensure it takes place legally. Transaction costs in Italy differ from property to property but can be up to 20% of the property value including foreign exchange fees, notary, and legal fees.
Finding the perfect second home in Italy is worth the effort and the steps below will help you along your journey:
Step 1: The Online Search
Exploring online, you can easily browse different destinations, get a feel for a range of locations, and narrow your shortlist down to the perfect properties for your needs.
Top tips for Success: You may find your dream Italian property is represented by a number of different agencies. Don’t be alarmed, this is quite normal and shouldn’t impact your chance to view and purchase.
Professional help: Online marketplaces and forums and real estate agents.
Step 2: Choose your Location
Take time to explore the pros and cons of each area and consider your needs. Do you want to live in an expat area or prefer something less popular with tourists? What amenities and attractions do you need nearby?
Top tips for Success: Explore online and you’ll find a range of local guides and information from experienced real estate agencies as well as residents in your chosen areas.
Professional help: Online marketplaces and guides and real estate agents.
Step 3: Finding the Right Property Type
Top tips for Success: If you’re looking for a rare historic property (either a Tuscan farm ranch, a castle or a palazzo), Italy is one of the top destinations in the world, with only France offering more castle-style properties for sale. On the opposite end of the upscale market, newly-built apartments are available but represent a smaller percentage of the real estate stock. But if you’re looking for a villa, there is definitely something elegant and unique for every buyer.
Professional help: Real estate professionals
Step 4: Freehold VS leasehold properties
The legalities around freehold and leasehold properties in Italy can be complex, so ensure you get appropriate professional advice. Most new-build Italian property is sold freehold, but this isn’t always the case with older and renovated properties. Keep in mind you do not need building permission to restore an Italian property, but you will need a SCIA (Certified Start of Activity Report) from your local municipal office. There are also historical, artistic, landscape, environmental or hydro-geological protections for some properties so it is vital you get the right guidance from your advisors.
Top tips for Success: Always take time to check before investing in a property which needs significant work. Ensure all legal checks are conducted and the renovations you want to make can be legally carried out before you sign any contracts.
Professional help: Wealth management advisor with real estate experience and architects or similar to assess historic properties.
Step 5: Open your Italian Bank Account
You require an Italian bank account to purchase your chosen property. It needs to be done in person. Prior to opening the account, you will need to obtain your codice fiscale or tax code. You can apply for your codice fiscale either at the Italian Embassy in your home country or at any Revenue Office in Italy. This code is essential for almost all day-to-day activities in Italy, including opening your bank account.
You can open an account at any branch of your chosen Italian bank, and you will need your passport, proof of address (even if abroad) and your codice fiscale.
Top tips for Success: While it is not essential to open an Italian bank account and you can rely on your Notary, it is much more convenient and cost effective to have a bank account in Italy to run and manage your new second home.
Professional help: solicitor or wealth management advisor with expertise in expat and international clients.
Step 6: Finding your real estate agent
There are 500+ Italy-based agencies registered on JamesEdition.com. Almost 80% of them are local brokerage companies with no ties to global real estate brands. The remaining 20% are represented by Coldwell Banker, Engel & Völkers, Sotheby’s International Realty, and Christie’s International Real Estate. How to contact an agent? Just hit the “Send Message” button on a listing page.
Step 7: Planning Property Visits
You can view your shortlisted properties online and via virtual tours, but an in-person visit is always the best way to get a feel for the place.
Top tips for Success: Take the time to visit different properties so you can truly get an understanding of your preferred neighborhoods. Visiting properties advertised by different agents will also give you a more objective understanding of the areas.
Professional help: Real estate agent / A wealth management advisor offering real estate services.
Step 8: Property Due Diligence
Due diligence should ensure everything is correct with the property, including any building permissions for renovation are in place and it is a legally built and legally on sale property.
Top tips for Success: Most Italian properties can be renovated but make sure your advisors double-check if you plan to extend or redevelop the home. Keep in mind many historic properties, such as castles and palazzi, may have protected status. A specialist architect or property surveyor should be able to advise if there are going to be concerns with your building plans.
Professional help: A wealth management advisor / Specialist property survey and valuation company
Step 9: Italian Building Surveys to Consider
It is not mandatory in Italian law to have any building surveys conducted, but you will find mortgage lenders may insist. Some lenders require a perizia (survey) before they will approve finance. This survey is usually a basic stima (valuation) to ensure the property is worth the purchase price.
Top tips for Success: You should always request a building survey for historic properties. While your mortgage lender may only need to double check the value of the property, you need to know you are investing in something structurally stable and suitable for your plans. Builders and engineers routinely carry out checks and surveys on older properties while architects are more commonly employed to assess modern properties. Professional valuers or geometra can also be used. Building surveys or perizia strutturale usually costs around €1,000.
Professional help: A property survey and valuation company as well as relevant experts such as valuers, builders, or architects if necessary.
Step 10: Finance Options Available
Top tips for Success: UK expats in Italy must remember they cannot rely upon UK-based financial advisors due to insufficient professional indemnity insurance.
Professional help: A financial advisor from an EU-based wealth management firm or local real estate company
Step 11: Choosing a Mortgage Lender
Mortgage lenders will look at the affordability of the loan based on your application.
Top tips for Success: Some Italian mortgage lenders ask for a survey to value the property and ensure it is worth the purchase price. They will organize this independently.
Professional help: A financial advisor from an EU-based wealth management firm or local real estate company.
Step 12: Money Transfer
High value money transfers come with fees attached, as you move your funds from your regular bank account to your Italian one. Opt between transferring your funds via the Society for Worldwide Interbank Financial Telecommunication (SWIFT) network or use a foreign exchange broker.
Top tips for Success: Keep in mind that banks often mark-up to the exchange rate which can be as much as 6% more than the mid-market rate. Foreign exchange brokers also have fees attached but they differ from broker to broker so it is worth shipping around.
Professional help: Foreign Exchange service provided by a local wealth management company
Step 13: Taxes and Fees to Consider
Top tips for Success: Take your time to go through all additional fees, taxes and costs with your professional advisor to ensure everything is correct.
Professional help: A lawyer and a real estate agent / A wealth management advisor offering real estate services
Step 14: Sign your Preliminary Contract
The preliminary contract, or Compromesso, is essential in all Italian property purchases. You ae required to pay between 10% and 30% of the property price as a commitment and confirmation you are buying the property. It is a legally binding contract which virtually guarantees the purchase. If you pull out, you lose your deposit and if the seller pulls out, they will have to pay double the deposit back to you.
Top tips for Success: While property deposits can be up to 30% in Italy, they are usually around 20%.
Professional help: A real estate agent / A wealth management advisor offering real estate services.
Step 15: Sign your Final Contract
Finally, you can sign the final title deed or Rogito. This represents the final contract before the property is finally yours. You pay purchase taxes and notary fees at this point. The time between preliminary and final contracts is usually between one and three months, as this is when an independent Notary is appointed.
Top tips for Success: The Notary works for both the buyer and the seller they prepare the deeds and must be present as the document is signed to make it legally binding.
Professional help: A lawyer and a real estate agent / A wealth management advisor offering real estate services
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