CHIAVARI, Italy - Owning a property
in Italy is the dream of many. Apart from the differences in the laws that
cover real estate transactions, the process is unlike any you may have
experienced in the past.
When I found this article by Italian
real estate lawyer Nick Metta, I immediately thought it might help explain the
intricacies of the Italian real estate system. I hope you find it useful.
However, let me say that it is absolutely not meant to be used as a substitute
for legal guidance, nor is it a recommendation of the author or his law firm.
If you are planning on buying a property in Italy, contact your nearest Italian
Consular for a list of qualified attorneys to help you through the process.
BUYING A PROPERTY IN ITALY: 10 THINGS YOU NEED TO KNOW
1. In
Italy, each property has a list price and a "sale" price. The list
price will of course gladly be accepted, but the sale price is the one the
vendor is actually expecting to get. Italians go into a property purchase
knowing this difference, as an inflated price is typical in order to embed
negotiation room into the deal. As a buyer, you should always start by offering
lower than list price and expect to negotiate from there.
2. Ask
whether the property has a Habitability Certificate. If not, this gives you
leverage to negotiate a substantial price reduction, as the vendor is required
by law to provide a Certificate.
3. Ask
whether the vendor recently did any renovation work. If so, a recent law allows
income tax benefits to be transferred to the buyer – but only if this is
mentioned in the agreement of sale.
4. Check
whether the vendor has a mortgage on the property. If so, as the buyer, you
could take over the mortgage under the existing terms saving substantial money
on a new mortgage process. Furthermore, with the banks tightening up on
mortgages, this could mean the difference between getting a mortgage or not.
5. Italian
Notary Publics are highly skilled legal professionals who act as a neutral
player in real estate transactions. The Notary meets the parties for the first
time at the very final moment to sign the title transfer deed. The Notary will
typically transfer the title by means of a standard purchase structure that
fits the needs of average buyers. It is important to know that there are
variations to this standard structure that could often benefit a foreign buyer.
Be sure to communicate your particular situation and estate plans to the Notary
so the ownership structure that best fits your needs can be adopted. To work
out the details it is important to do this prior to the final completion
meeting.
6. Italian
real estate intermediaries typically act as dual agents, representing both the
buyer and the vendor. Also, their fee is due as soon as the offer is accepted,
even if the sale does not go through. It is possible to negotiate terms in
advance, for instance, that the intermediary fee is due only if the transaction
is completed. To obtain a safe deal that is best for your situation it is
advisable to have your own independent expert working exclusively in your best
interest, such as an experienced English speaking Italian lawyer.
7. In
Italy the vendor (even a developer) is entitled to spend the deposit as soon as
the buyer pays it. Ask for confirmation that the 20-year history of the title
has been duly verified prior to giving any deposit to the vendor.
8. Transfer
taxes vary from property to property. The buyer pays 100% of the transfer
taxers. Request an accurate estimate of applicable taxes for your specific
transaction and factor that amount into your budget.
9.
Several tax reductions might apply depending on the case circumstances. If the
buyer does not live in Italy but has (or is entitled to claim) Italian
nationality, there is the opportunity to unconditionally save 70% on transfer
taxes.
10. Remember
to apply for and receive your Italian tax number (Codice Fiscale) as it is
required for all Italian real estate transactions. It is the equivalent of an
American Social Security Number and is free for the asking at any Italian tax
office, through the consular office, or through a representative in Italy.
Nick Metta, Studio Legale Metta
Dear Mr Macchioni,
ReplyDeleteI just came across your blog, very nice.
I am delighted that you found interesting my article. Thank you for re-posting it.
That article was originally posted a few years ago. Although the content is still current, we just published a new article about "10 things to do prior to making an offer on an Italian property" where we addressed also other aspects of the process of buying a property in Italy. It is in the Questions and Answers section of our website: http://www.studiolegalemetta.com/en/italian-property-purchase-tips/
I hope you enjoy the reading.
Best wishes,
Nick