Guide to Property in Italy

Introduction to Buying Property in Italy.

Is it possible to find real estate in Italy at an affordable price?

The British, Germans and Americans in particular have a strong fascination with Italy - so much so that many of them choose to buy a second home in Italy or to retire to Italy and enjoy the Italian way of life.

There are an estimated 200,000 homes in Italy owned by UK residents for example.  And expatriates looking for property in Italy are generally attracted by the beautiful Italian weather, an easier, laid back lifestyle and the friendliness and warmth of the local inhabitants.

And if you are after a small holding in Tuscany, an apartment in Florence or a villa on the Italian coast, Italy’s real estate market will have what you’re looking for!  The property market in Italy is healthy, the strong influx of foreign property investment has boosted the market and property prices in Italy are consistently on the up!

So is it still possible to bag a property at a bargain price?

Most definitely yes!

If you go off the fashionable beaten track and head for some of the lesser known and popularised regions of Italy you will be able to find yourself far more property for your Euro than if you choose a renovated farm house with pool in Tuscany or Umbria for example.

One particular area that may be of interest to a potential property investor in Italy is Lunigiana - also known as the land of one hundred castles!  This area is slightly lesser known and property bargains can still be found. 

But Lunigiana is a designated green-zone which means that building regulations there are very strict and can restrict you from making significant alternations and improvements to property.

Whatever you are after in real estate terms it is always essential to appoint legal representation especially if purchasing ‘abroad’, that way your best interests are covered. 

Any complicated legal procedures which may differ to the way things are done ‘back home’ can be fully explained to you, and you are less likely to make a buying mistake. 

With property purchase ‘buyer beware’ is the key, and if you appoint legal representation you are doing the best you can to avoid mistakes resulting from assumption or lack of understanding.

What can you expect from the purchase process?

- A foreign citizen who wishes to purchase must first of all obtain a tax identification number codice fiscale
- Then once your offer has been accepted, a ‘compromesso di vendita’ will be drawn up; this is the document that contains the facts about the agreed sale price, any deposit you’ve paid, your completion date, the name of the Notaio or notary who is responsible for the execution of the deeds, and any specific the terms and conditions for the sale of the property. 
- You are expected to pay a deposit of around 10% to 20% of the agreed sale price. 
- You are liable for a registration tax - which is like stamp duty - and this is about 10% of the declared purchase price.  This tax is due on contract completion.
- If you’re buying an ‘average’ property then expect notary fees to be in the region of around 2,500 - 2,700 Euros.
- The notary is responsible for checking all documents at the Land Registry that could affect title and deeds, and also to make sure there are no charges, debts or mortgages against the property.
- The notary also has to register the new title with the Property Registry and deposit the deeds with the relevant authorities on your behalf.

If you intend to rent out your Italian property bear in mind that you might not be able to rent it out all year round and you should not rely on an income for about six or seven months of the year.

If you employ a letting agency to assist you, you will incur agency costs and probably some cleaning and general maintenance costs as well.

Finally, any income you generate from the rental of your property in Italy may be liable to taxation in Italy - or back home if a double taxation agreement exists.  Get advice from a tax specialist.

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