This article will help you avoid some of the most common hazards you might run into.
We all know that it is a very favourable moment for those who want to invest in Italy, since it is the only market where real estate prices are still going down, while in the rest of Europe they are increasing.
The demand for houses is rising, both by Italian and international buyers and many people are taking advantage of this very convenient moment. Those who need a loan can also take advantage of the historically low interest rates on mortgages.
But what do you exactly have to do, if you want to buy a property in Italy?
The first thing you need, is to get your Codice Fiscale, i.e. an identification code calculated on the basis of your surname, name, date and place of birth.
Once you have found the home of your dreams, negotiation starts with a written offer of purchase, in which the prospective buyer states what he is willing to pay and under what terms. By signing this offer, the vendor accepts the offered price and undertakes not to sell the house to anybody else until a certain date.
Before going ahead you should check the title of the property at the Land Registry. So you can make sure that the property is regularly registered and investigate if it really belongs to the person who is going to sell it and if there are loans on it.
Then, the next step which is not mandatory as the definitive contract can be immediate is the preliminary agreement of sale, a legally-binding document which states the agreed sale price, the completion date and any information and rights the property has. The preliminary agreement usually provides for a deposit (caparra confirmatoria) to be paid (about 10% of the purchase price). Once the buyer has paid the deposit, the seller can only withdraw if he pays back to the buyer this sum plus an amount of money which is equal to the deposit itself. The non breaching party can either sue the other party for the specific performance of the preliminary agreement or terminate such agreement and seek damages.
The further step is the deed of purchase, which is signed by both parties in front of the notary, as soon as all documentation is available. Once signed the deed of sale, the buyer pays the balance and the property is officially transferred to him. Then the notary issues a certified copy of the contract and registers a certified copy of it with the Land Registry. The total fees for buying a property in Italy are approximately 10 to 20 per cent of the purchase price. In case the buyer has relied on a real estate agency, he has to pay a commission which is around 3% of the purchase price + VAT 22% of the fee. Obviously, a fee is paid to the notary for the preparation of the deed and other fees may include the help of a lawyer for legal matters; a surveyor or an architect for the property inspection.