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Property Legal IssuesBack to top Back to main Skip to menu
Italy - Property Legal Issues
Italy follows the principle of reciprocity, which means that expats can only purchase property in Italy if their home country allows Italian citizens to do the same thing. Moreover, it is strongly advisable for expats to engage a lawyer in their home country before investing in the Italian real estate market. It is also a good idea to engage a local licensed realtor who can look after the paperwork and other legal formalities. Like any other country, purchasing a property in Italy involves thorough investigation and a lot of negotiation before the deal goes through as well as endless paperwork after the purchase.
An important point that all expats should be aware of is that they inherit any unpaid debts on a property they purchase. Creditors (lenders and local authorities) can repossess or even sell their property to pay off debts. Therefore, it is absolutely essential to first find out if there are any outstanding liabilities attached to the property.
Before buying any property, expats need to get the chain of title and other charges (mortgages or easements) verified. The compliance of the property with planning and building regulations should also be checked at the land registries office. These checks can be conducted by the real estate agent involved in the deal. The buyer can also appoint a technician or a surveyor (geometra) to carry out a technical surveyor. Once all the preliminary formalities are completed and a deal is agreed upon, the commitment agreement (compromesso) and final deed of sale (rogito) need to be executed.
As a usual practice, the buyer has to pay a deposit (10% to 20% of the total deal value) when the commitment agreement is signed. This document should be registered with the Ufficio Del Registro within 20 days of execution. As per the law if the sale does not go through after signing the commitment agreement because the seller backs out, double the deposit amount is returned to the buyer. In case the buyer decides to cancel the deal after signing the commitment agreement the entire deposit is forfeited to the seller. While it isn’t mandatory for the notary of public to be involved when the commitment agreement is signed, it is best to get one engaged so that the property and paperwork can be checked thoroughly.
The remaining sale amount has to be paid off when the deed of sale is signed. The involvement of the notary public is mandatory when the final deed is executed. Apart from the cost of the house, the purchaser is responsible for the taxes (registration tax/ value added tax) payable upon transfer of the property.
There are no legal restrictions on the resale of a house in Italy; expats can initiate a resale at any point of time. However, only those houses that have been owned for 5 years or more are exempt from the Italian Capital Gains Tax.
An expat can also purchase a piece of land in a rural area, in order to save some money. However, if they plan to build a house on the land, they need to ensure that it is edificabile, i.e., it can be built upon. The planning restrictions for land in the rural areas are more stringent, especially if it is in a mountain area, a landslide-prone location, a river basin or in an earthquake zone. It is absolutely essential to find out about the building restrictions for any piece of land, before making a bid on it.
At times expats purchase dilapidated properties, which they restore and then reside in. The buying formalities remain more or less the same for purchasing a privately-owned ruin in Italy. However, it is essential to get complete information about the planning and building regulations before making an investment of this kind.
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