Property Buying and Renting Processes in Italy

The majority of Italians own their own homes; homes are passed from generation to generation and because there is no inheritance tax in Italy people are not forced to sell off property assets.

Furthermore those who choose to buy property in Italy find that the law is very strongly in support of the purchaser.  As a result of these facts homeownership in Italy is up to 78%.  This article details both the property buying and renting processes in Italy for anyone interested in relocating.

Foreign purchasers, particularly the British, have been attracted to rural and rundown properties in Italy; farmhouses in need of renovation or town properties in areas in need of regeneration.  Italians who purchase are generally attracted to newer property which means that there remains an abundance of older homes in Italy in need of some TLC which can be snapped up for relatively attractive prices.

In terms of property prices in Italy it’s fair to say that Italians view homeownership of a given property for life therefore there has not been much speculative property investment in the country which has kept prices stable.  If you’re after investment potential it can be gained through the renovation of property but Italy is not the best country for property investors seeking a quick turnaround on their real estate assets for many reasons including the fact that if you’re seen to be speculating on property and sell up within five years of initial purchase you will suffer extra taxation.

As a foreign buyer you pay higher registration tax on your home in Italy, so if you’re thinking of relocating permanently to the country you’re better to do this within one year of buying your home, that way you save yourself 7% on the purchase registration tax which is 4% for local buyers or 11% for non-resident buyers or those who buy more than one property.

The entire purchase process is handled by a notary and he or she will be responsible for carrying out searches on the property and its title.  You should also have an independent solicitor act on your behalf and instruct a geometra to conduct a survey on the property you’re interested in particularly if it is an older property.  All the buying fees excluding the aforementioned registration tax come to about 2.5% of the purchase price and as a buyer you’re expected to pay these fees.  Once you’ve found a home you like, set the process in motion to purchase it and the surveys and searches have been completed to your satisfaction it’s usual to sign an initial contact and pay a deposit of between 10% and 50% which is non-refundable to you if you then pull out.

The entire purchase process can take anything from one to six months depending on many factors including the nature and complexity of the searches and surveys, the mutually agreeable completion date, the arrangement of mortgages etc., but it is often usual for the vendor to move out and the purchaser to move in after only the preliminary contract has been signed.

When you first move to any country it’s very sensible to rent property for a period of time.  Some people claim that this is throwing money away, but in a country like Italy where you’re heavily taxed if you sell a property within five years of purchase you could be throwing far more away if you buy something straight away and find that it is not ideal, it is not in the perfect location or that you simply don’t like Italy and want to go back home!  By renting you can truly get to know the areas you’re interested in and also get in with the local community and possibly find out about unadvertised properties for sale.

The renting process in Italy is similar to the one in Germany whereby you either rent unfurnished - meaning the property comes to you without even light fittings or a kitchen - or it comes to you furnished right down to the sheets on the bed and the cutlery in the drawer!  There are rarely any half measures so you have to decide what kind of rental property you want.  If you’re going to be renting short term it might be wise to put your own possessions into storage and rent a furnished property, that way you won’t have to buy yourself a temporary kitchen!

If you use an agent to find a property you should expect to pay through the nose in agency fees - again, it’s the same in Germany!  Agents charge between 10% of year’s rental or two months rent for their fee.  You can find private rental deals in newspapers or just by walking around an area and looking out for ‘to rent’ or ‘affittasi’ signs or you can ask around at work or in your local neighbourhood.  When you find a property a landlord will ask for between one and three month’s rent as deposit and this will be refunded to you at the end of the contract minus any damages, just make sure you have all this written into a legally binding contract.