El proceso de compra
1) THE FISCAL CODE
The first thing you need to get familiar with is the CODICE FISCALE.
If you are thinking to purchase a property in Italy, in fact as well as to open an Italian bank account (or to buy a car) you will need a CODICE FISCALE.
It is an identification code calculated on the basis of your surname, your names, the place of your birth and the date of your birth and which will be used any time you will need to deal with the Authorities.
2) OPENING AN ITALIAN BANK ACCOUNT
In the event of a purchase it is essential to open a bank account in Italy not only to transfer there the funds for the completion (as the final payment normally happens in Italian bankers drafts) but also to get the various utilities paid automatically.
3) FORMAL OFFER OF PURCHASE
When a client, after having visited some properties, decides to go ahead and to buy one of those, the negotiation starts with an OFFER.
Usually just a verbal offer is enough, sometimes instead a written formal offer of purchase is exchanged ( lettera di intenti or proposta di acquisto) . If the vendor signs it accepting the offered price this means that he undertakes not to sell the property to anybody else until a certain date.
This letter is to protect the buyer from losing the opportunity to purchase.
4) CADASTRAL CHECKS
Before going ahead would be better to investigate the title of the property at the Urban and Land property registry office (Catasto). This would be useful to check that the property is regularly registered, that it belongs to the person who is undertaking to sell it and if there are loans on it.
5) PRELIMINARY AGREEMENT OF SALE (Compromesso)
This is the first legally-binding document which states the agreed sale price, the completion date (Rogito - see point 6 below) and any information and rights the property has. The ’Compromesso’ is then drawn up and usually is signed 1-3 months later. Once this contract is signed and the deposit (caparra) of 10% of the purchase price paid, the seller may only withdraw if he pays double the amount of the caparra (deposit) to the buyer. Should the buyer wish to withdraw, he will lose his deposit in its entirety.
6) ROGITO (DEED OF PURCHASE)
The deed of purchase, final contract or ’l’atto notarile’: Rogito is signed after the compromesso, and only when all the documentation is available. It is signed by both parties, the balance is paid and the property is officially transferred. There are two types of deed. One is a public document and the other a private contract. The former provides greater protection and is slightly more expensive. If a property bought by private deed is subsequently found to have a charge against it (such as a mortgage), the notary cannot be held responsible, whereas if a public instrument has been used, legal action can be taken against him.
If a property bought by private deed is subsequently found to have a charge against it (such as a mortgage), the notary cannot be held responsible, whereas if a public instrument has been used, legal action can be taken against him.
Following completion, the notary issues a certified copy of the deed of sale and registers the original document with the Land Registry (Catasto).
Many properties in Italy are freehold. The total fees for buying a property are approximately 10 to 20 per cent of the purchase price. Among the costs are:
- Registration fee
- Land Registry fees/stamp duty
- Notary fees (generally about 4 per cent of the declared price)
- Legal fees (for independent legal advice)
- Estate agent’s fee (usually shared between vendor and purchaser)
- Mortgage fee (if applicable)
- IVA (Italy’s equivalent of VAT), if buying from a company
- State tax, if buying from a private individual
LAND REGISTRY FEES/STAMP DUTY
The main cost in buying a property is represented by the Land Registration Tax (Italian registration/Stamp Tax). This is the main tax on real property, which is usually levied at 10% of the declared value of the property.
A fee is paid to the Notary for the preparation of the Rogito. This fee varies from town to town and is on a scale related to the declared value of the property. It is approximately 2 - 5% of the value of the property. Real estate agents in Italy may have an agreement with a notary whereby all notary’s expenses can be incorporated into a ’standard’ fee and agreed with the buyer. We advise to check in advance.
IVA/ VALUE ADDED TAX (VAT)
This applies only to properties bought from a company or business and replaces the Land Registration Tax. It is 10% of the declared purchase price of the property (for non-luxury properties) and 20% (on luxury homes with a rating A1 in the property register). Usually it is possible apply 10% IVA. This has to be added to the purchase price, as it is not included in the price charged by the builder or developer. If you are a first time buyer and buy from a developer (who sells the property within 4 years from the date of completion) you pay a reduced rate of IVA at 4% and a fixed Registry Fee.
RUNNING COST OF YOUR PROPERTY :
What are the purchase costs?
1) Agent’s commission
The agency fee is usually 3% plus VAT (I.V.A.) 20% and is payable at the signing of the preliminare contract
2) The registry tax (Importa di Registro)
When a house is sold it has to be registered. The registry tax (imposta di registro) is 3% on a first house and 7% on a second property. This applies for Italians too, not just foreigners. The registry tax is calculated on the value stated at the land-registry office which can be considerably less than the commercial value.
3% of the property value in case of purchase of First Home from a Private Owner
7% of the property value in case of purchase of Second Home from a Private Owner
3) Mortgage tax(Imposta ipotecaria)
2% of the value in case you buy a Second Homes from a Private Owner
4)Cadastre Fees(imposta Catastale)
1% of the value in case you buy a Second Homes from a Private Owner
You will be liable for either VAT or registration tax. VAT is applicable on purchases from a company, whereas the registration tax applies to private purchases
6) Notary Fees
There can be a slight variation in price between notaries, but not much. Notary fees on a property of €150,000 would be from €1,400 to €1,500. The higher the price of a property, the higher the notary fees are likely to be.
The “ICI” (Imposta Comunale sugli Immobili) is an annual council tax determined by the size and quality of the property. It is not very high, about 100 - 400 euros, about 0.5 - 0.6% of the Declared Value, and established by the council (payable once or twice a year).
Refuse/ Garbage Tax.
Small, about 100-300 euro.
Electricity, water, gas/oil etc for heating, phone, a small fixed fee every two months, plus payment for utilities used.
If you buy a property which is part of a group of properties which share some communal areas - gardens, driveway, swimming pool, tennis court etc. then you will be required to pay condominium expenses. They vary as to the type and size of communal areas on the property.