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property purchase in Italy

Property Purchase in Italy

Each country has its specific bureaucracy and steps required for property purchase. Property purchase in Italy has the series of steps and costs listed below. By and large, excluding the costs and time involved in finding the property of choice, the average buyer can expect  the purchase process itself (incl. taxes) to imply an extra 15% on purchase price.

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  1. Setting the bases for purchase: Find a property you are truly interested in and be sure you wish to go ahead and purchase. An average foreign buyer will make some 5 or 6 trips to the country before finding the property of choice.
    - To proceed with the purchase you will need to have an Italian tax code ("Codice Fiscale") if you wish to proceed. This is not difficult to get (surprise surprise) and in fact will be necessary in order to purchase a wide variety of goods and services in Italy.
    - It would be advisable to set up a local bank account at this stage too.
    - You might also consider the services of a specialised foreign exchange operator as this can save you a few pips on the total purchase price wrt your home currency.
  2. Agree a purchase price (henceforth "PP"). The form in which this agreement takes place will depend on the channel of purchase you happen to have followed: if it is through some sort of an agent you are unlikely to get to speak to the vendor in person for obvious reasons. There is little knowing what cut the real estate agency is actually taking but it will tend to be in the region of 3 or 4% of PP. Does this give you any obvious ideas on saving at least part of this 3-4%? Contact Us.
  3. Initial Offer - A small deposit "Deposito di Garanzia" may be paid at this stage in the region of some 5% of PP to ensure preference over other would be buyers. It would be in order to have completed a few formal searches first to make sure all is in order with the property and it's present ownership rights. The surveyor employed for this type of work is called a "Geometra".
  4. Preliminary Contract - this is known as the "Compromesso". This document will detail the property and its whereabouts, the agreed PP, the date for completion (usually a few months from the compromesso) and any particular conditions agreed with the vendor/mediator. An advance payment is made at this stage of about 20% of the agreed PP. Turning back at this point can be expensive for both parties, especially the vendor: the would-be buyer risks the moneys paid to date whilst the vendor risks twice the amount.
  5. Final Contract - this is known as the "Rogito". It happens on the date previously defined in the Compromesso agreement. The remainder of the PP is paid up at this point, usually by bank transfer. A little forward planning with exchange rates might save you enough money for your celebratory lunch. The papers are drawn up by an independent solicitor which in Italy is called the "Notaio". The Notaio will also be involved in making sure that the ownership is transcribed into the public registers and that each party is sent a copy of the ownership papers and contracts. The notaio's fees are some 2-4% of the PP.
  6. The fun starts: There are a few things to get in order, rather like moving homes really. You need to register at the local council for council taxes such as housing tax and refuse. You will also need to call your chosen utility operators to set up services, not to mention any builders, landscape architects etc.....
  7. Additional fees and costs:
    - Yes, Italy has its equivalent of stamp duties. How much tax you pay on your purchase will depend on a few factors such as whether you are resident, whether this is your first home and whether you are buying new build directly from a construction company. It can be anything up to 20% of the declared value of the property, average 10%. This subtle difference between declared value and the actual PP is rather like the difference between the face value of a share and the actual stock price on the stock exchange. Again, a little forward planning can help you minimise tax surprises.
    - Mortgage arrangement fees. Will tend to be in the range of 1% of the PP.
    - Bank Transfers. Depends on the bank(s) and the type of transfer involved.

Please read the Disclaimer

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Written by Giovanni Milani-Santarpia for www.mariamilani.com - Italy holiday rentals and Italy holiday property for sale. Property for sale page top.