For sale: renovated stone house in Le Marche, Italy, with stunning views of the Monti Sibillini mountains, for sale by owners, not through real estate agents. Tuscany and Umbria plus!
The process of buying a house in Italy entails several stages, which broadly speaking can be summarised as follows:
There is no need to buy through a real estate agent (agente immobiliare), although agents will try to persuade you otherwise; if you have yourself found the house you want to buy and have reached verbal agreement with the owner, you can employ a geometra to prepare the documents and make the necessary checks. It will prove significantly cheaper to follow this path, as real estate agents handling a house sale charge commission to both the buyer and the seller, which amounts to between 6 and 8% of the value of the house. Of course, the buyer believes he is only paying 3-4%, but has not the seller factored his share of the agent's commission into the price of the house? For this reason, we have opted not to advertise our house through a real estate agent, preferring to have the contract handled by a geometra, to the mutual benefit of both buyer and seller.
As a preliminary step, a prospective foreign buyer must obtain a personal tax code (codice fiscale) from the local tax office. The geometra can assist in arranging this. You will also need to have an Italian bank account.
The seller can provide a land registry certificate (visura catastale) to prove ownership of the property and a registry map to show the location of the property and any other parcels of land attached to it. The details include the category of the property for property tax purposes: residential properties fall into Category A and ancillary buildings (outhouses, garages, etc.) into Category C. Categories B, D, E and F cover a variety of other types of premises.
As well as verifying ownership, it is well to establish at this stage that the property is not encumbered by mortgages or other liens, complies with building and planning regulations, is covered by energy efficiency certificates and has the necessary declarations of conformity with regulations for wiring, heating and plumbing systems. This too can be handled by the geometra.
As mentioned above, the compromesso is the preliminary private contract by which the buyer promises to purchase the property and the vendor promises to sell it. It is a binding agreement, accompanied by payment of a deposit; if either party fails to proceed to the atto notarile, the injured party can enforce the terms of the compromesso or seek compensation. The compromesso, which can be drawn up by a geometra, states the names and addresses of buyer and seller, the identity of the property in question, the sale price, the deadline for completion of the atto notarile, the date for physical handover of the property and conditions such as vacant possession. The deposit usually amounts to approximately 25% of the agreed purchase price and counts towards the full payment for the property.
For this stage it is necessary to employ a notary public (notaio), who is a private lawyer performing official duties. The geometra will know of a notary practising locally who can handle the purchase. He will officially check all that has been described above as needing to be checked and collect the various certificates. Once he is satisfied that all is in order he will draw up the atto. If the buyer does not understand Italian, the atto must be translated into his own languate; here again the geometra will help line up a translator. Once the documentation is ready, the notaio will make an appointment for the reading of the atto, and a reading it is! The notaio may assume that both parties are well acquainted with the procedure, and in the past they did not provide a copy of the atto for the parties to follow while they raced through the reading of it, but a sensitive notary should be prevailed upon to let the buyer read a copy rather than having to simply listen to the arcane details as they are read at high speed. An interpreter will also have to be employed for the session at the office of the notaio to ensure that the buyer understands what is going on. Upon signature of the atto, the buyer pays the remainder of the sale price, the contract registration fee and the notaio's charges.
There are a number of geometri operating in the area who speak English or German.
There are a number of fees and charges to be paid on the purchase of a property.
- Registration tax (imposta di registro). The main tax on a purchase of property, levied at between 3 and 7% of the declared value or rendita catastale. The amount payable varies mainly according to whether the property is the buyer's first or second home and whether or not the buyer is resident. The buyer can claim the lower rate (3%) if the property is his principal residence or if he plans to take up residence there within 18 months of purchasing the property. If the purchaser is not resident and not intending to take up residency at the property or if the property is a second home the rate of tax is 7%. The rate on agricultural property is 10%, unless it is rezoned before the sale.
- Land registry tax (imposta catastale). The tax is a fixed amount of €168 if the property is the first home of a resident; otherwise the rate is 1% of the declared value of the property.
- Value Added Tax (imposta sul valore aggiunto, IVA). VAT is levied only on new property.
- Mortgage fees Various fees are levied by the lender as well as a mortgage tax.
- Notary's fees. Part of the fee is calculated on the price of the property and part on the number of pages and copies of the sale contract. Additional charges cover tax stamps, lawyer's expenses and payments made on your behalf. An estimate can be obtained before engaging the notary.
We have often been asked about property taxes and utility charges on the property. I have summarised them below, with an indication of the charges on our house in 2015:
|Annual property tax (TASI)||284|
|Annual refuse tax (TARSU)||213|
|Water charges||Based on consumption|