In case you want to buy a property in Italy and enjoy the famous “Dolce Vita”, as thousands of foreigners do every year, we have prepared a clear and simple guide to avoid the related risks and get an idea of how the real estate purchase process works.
Thanks to our partnership with International lawyers, we offer our assistance also with the legal due diligence, drafting, and negotiation of transactional contracts and agreements, with the necessary research and analysis of legal documentation in the Public Real Estate Registries.
Below, we indicate the essential steps of a typical purchase made by a foreigner for a property in Italy.
1) The Italian Fiscal Code “Codice Fiscale“
The Tax Code (in Italian, Codice Fiscale) is necessary for being able to purchase a property in Italy. This has to be requested from the Revenue Agency (in Italian, Agenzia Delle Entrate).
2) Opening of a Bank Account In Italy “Conto Bancario“
When you want to buy a property it is useful to open a bank account in Italy both because it will make the payment procedures more streamlined, and because it will be necessary to have the bank domiciliation for the automatic payment of the utilities (very appreciated by the foreigners or Italians who live abroad).
3) Legal Due Diligence “Controllo Legale“
A Legal check is always a good idea, for example, to see if the property is properly registered, if it really belongs to the seller, if it is or not subject to mortgages or hidden issues, fees, or condominium insolvency. Avoid future headaches and expensive mistakes.
4) Mortgage (Eventual Step)
We generally assist foreigners to buy property also with a mortgage request, following the communications with the bank, and the steps of the procedure in Italy.
In these times of COVID-19, it’s quite difficult to obtain a mortgage for a foreigner, anyway, in our experience, the lenders can offer a maximum amount of 60% of the purchase value.
5) The Proposal Offer “Proposta d’Acquisto“
When a potential buyer decides to proceed with the purchase of a property, send to the seller a PROPOSAL OFFER (in Italian, Proposta d’Acquisto).
Usually, this Offer will have a Fiduciary Deposit to guarantee the proposal, this sum should be around 5-10% of the offer, it depends on the price.
The proposal offer must be made in writing (usually it is valid for 7-15 days). Once the seller signs the proposal, accepting the price offered, the parties mutually obliged each other to conclude the sale with the closing.
6) The Preliminary Contract “Contratto Preliminare“
Once the proposal is officially accepted, the economic terms and the legal clauses are part of the preliminary contract (contratto preliminare).
This is the agreement with which the parties mutually undertake the stipulation of a subsequent final contract (deed). However, it must be clear that the proposed offer, if stipulated and accepted, already creates a legally binding relationship between the parties.
The Preliminary Contract will need a payment that will be added to the previous sum, to reach 10% for the Caparra (if this is the agreed percentage).
Once that has been signed by both parties and the deposit has been paid, the parties are ready for the closing.
With our qualified assistance, this step of the process can be considerably simplified, maintaining the guarantees.
Breach of contract
If the seller breaches the obligation has to pay a penalty of twice the deposit paid. If the buyer breaches the obligation will lose the amount of the deposit.
The power of attorney
In the purchase process, often people are struggling with bureaucracy, they don’t want to deal with the paperwork. Through the power of attorney, the client is relieved of this duty. The lawyers will take care of all these steps.
The power of attorney is a legal instrument with which one person confers on another, generally a lawyer, the power to represent him by allowing the performance of deeds or activities, including the notarial deed of sale, on his behalf.
If a foreigner wants to buy the house in Italy without being physically present, as, in this Pandemic period, the power of attorney is the ideal tool. You must go to the Consulate or a public official of the state where you reside to authenticate the power of attorney, which must be sent to Italy with an attached translation.
7) The Notary Deed “Rogito Notarile“
The notarial deed represents the final act of the real estate sale negotiation. The Notary is usually chosen by the buyer. In our 10+ years of experience, we have worked with numerous notaries, so we can also be a reference for this. Done, you are finally a Homeowner in Italy!
Written in collaboration with the Lawyers Avv. Davide Govoni, Avv. Emmanuele Govoni – Govoni International Law Firm