Property consultants in Basilicata, south Italy

Purchase process

Purchase process – an introduction to buying Italian property

The first step in the process, when both vendor and buyer are satisfied and accepted the price is to sign the purchase contract, “contratto preliminare” or “compromesso”. When signing this a first payment will be done that has to be within 10-30% of the selling price. The preliminary contract contains the details of the sale such as:

  • purchase price
  • way of payment and financing
  • date of the drawing up of the final deed of purchase (rogito)
  • description of the estate and relative pertinences
  • indication of the amount paid as first payment, caparra confirmatioria e/o caparra penitenziale

The final deed (rogito) is drawn by a public notary (notaio) paid and chosen by the buyer. Once the contract has been signed by the two parties, the final payment is done (balance). The notary will prepare the official communication to the local council and register the deed of sale (atto di vendita). The notary will also provide in giving seller and buyer a copy of the conveyance.

FEES ON REAL ESTATE PURCHASE

When you buy a property, fees to be paid can vary depending on the destination of the property and the vendor (private or builder). In the case the property to purchase is a first home and the vendor is a private the totalt fees are ca 3% of the declared value of the property. In the case the real estate is a second home the final notary deed will on the other hand be 10% of the declared value. Notary’s fees can vary depending on the price of a property and are higher as percentage on cheaper properties but are normally around 2.5 %. In Italy each property has a sale price ( that which is paid to the vendor) and a declared value. The declared value is registered at the “catasto” ( land registry certificate) and this registration process is called the “visura catastale”. Please note that the declared value tends to be lower than paid to the vendor. Taxes are however only paid on the declared value.

The above mentioned fees consists of the following taxes:

  • Registration Tax
    Registration tax ( imposta di registro) is the main tax on property. The amount payable depends on whether it’s your first and only home or a second home, whether it’s a new home and whether you’re a resident, as follows:

    Buyers of new properties don’t pay registration tax but must pay VAT (see below).

    On your first home, you’re eligible for a reduced tax of 3 per cent. The property must be your principal home for residential use and be located in your present or future comune of residence (or in the comune where you have or plan to have your main place of business).

    The registration tax for non-residents and those buying second homes is 7 per cent, so if you’re planning to become a resident in Italy it will pay to do so before buying a home there.

    If you’re buying an agricultural property, you must pay tax at 10 per cent, although it may be possible to have it ‘de-ruralised’ ( deruralizzato) before the sale, thus reducing the tax payable from 10 to 7 per cent (or to 3 per cent if it’s your first home). Agricultural land, however, is always taxed at 10 per cent. When a property comprises both an urban building and agricultural land, tax is calculated separately for the building and the land.

  • Land Registry Tax

    Land registry tax ( imposta catastale) is payable on all property purchases and, as with registration tax, the amount payable depends on whether it’s your first and only home or a second home, whether it’s a new home and whether you’re a resident.

  • Value Added Tax

    Buyers of new properties must pay VAT (IVA), which is 4 per cent for first home resident buyers and 10 per cent for second home and non-resident buyers. If you build your own home, you pay VAT at 4 per cent.

Everybody, whether Italian or foreign, who takes part in financial transactions in Italy needs a tax identification number or codice fiscale. So, to complete a property purchase in Italy this is mandatory. You can easily receive a codice fiscale in your home country, either at the Italian embassy or consulate. We suggest that you ask for this before you come to Italy but if not possible EnotriaMia are able to help you with this in Italy. Further to this, it’s mandatory to have an Italian bank account as the notary is paid with a check. EnotriaMia will organize this service for you as well for a small fee.

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