An introduction to real estate law in italy

The purchase of real estates in Italy

Preface

Italy is since the 1950s the classical holiday destination for people from all over the world.

Milde climate, excelent food, many points of cultural interest have let to the phenomenon that lots of people have found there second home house of the alps.

This short introduction is meant to give some basic information to our clients interested in purchasing or selling real estates in Italy. Our mission is to show the fundamental legal and taxation aspects of purchase of real estate in Italy. For this reason you'll find no specific hints on the legislation.

Inspite of EU and the common currency there is still a large diversity as far as the legislation and taxation is concerned. In any case we recommend to engage specialized lawyers when thinking about the purchase of any real estate in Italy.

Also here is true, that good advice before the purchase can save lots of money and time. Any problem can lead otherwise to a legal cause which can take many years to finish in Italy.

Our law firm is offering here a wide range of services including the "carefree package" for a reasonable fee.

The acquisition of property

The property of a real estate in Italy can be acquired by means of a notarial deed or throw a privately written contract with authenticated signatures. Unlike for example in Germany the property will be transferred already with the signing of the contract independently from the paying of the price or the handover of the real estate.

Therefore our advice also for experienced buyers is to engage qualified lawyers for the purchase and especially for the drawing of the contracts.

Procedure of the purchase of the real estate.

Practically the purchase of a real estate will be concluded in two steps:

a) Preliminary contract
The first step will be to sign a legally binding privately written preliminary contract (contratto preliminare/compromesso). In this contract the party undertaking to sell promisses to transfer and sell to party untertaking to purchase the real estate in question. Also in the preliminary contract the parties and the real estate have to be described precisely and the price will be fixed and the modalities of payment. Also there will be named a notary and a deadline for the signing of the notarial deed. Usually the party untertaking to purchase makes a down payment as penalty in case of breach of contract (so called caparra confermatoria) which can be kept by the party untertaking to buy when the buyer doesn't sign the notarial deed within the fixed time limits. On the other side the vendor has to pay twice the penalty to the buyer if he refuses to conclude the notarial contract.

b) Notarial deed
The second step consists in the signing of the notarial deed (so called rogito) in which also the property and the possession of the real estate will be legally transferred. This contract is the condition for the transcription of the sale in the land register.

Before signing the notarial deed it is necessary for the parties to get an italian tax number (codice fiscale).

Power of attorney

The buyer or seller doesn´t have to sign the contracts personally. He can also engage a person which can sign the contracts with a special power of attorney (procura speciale). The power of attorney can be signed at any italian embassy or consolate general which has to authenticate the signature. The power of attorney has to be sent to the representative in original which can the sign the contract. So an eventual travel to Italy and costs for an otherwise necessary translator can be avoided.

Taxes

The following taxes have to be paid by the buyer of any real estate in Italy:

Mortgage tax (imposta ipotecaria

Catastal tax (imposta catastale)

VAT (IVA)

Stamp tax (tassa di bollo)

Land owners tax (ICI)

The exact amount of the taxes is subject to constant changes by the italian legislator and varies if the real estate is bought as residence or holiday home.

For detailed information feel free to contact us.