Properties Around Italy
Information On Purchasing
THE LEGAL SIDE OF BUYING A HOME THROUGH PROPERTIES AROUND ITALY (PAI)
The steps for purchasing a house in Italy through PAI are as follows:
Stage 1: Commitment.
The client will take this step when he has a firm interest in the property. When you find a property you like, you will have an interview with us, and we will go through the whole process and clarify your understanding of all the procedures and costs. During this step the client will pay a down payment of 20% with a minimum of 15’000.00Euro. This deposit will be discounted from the final invoice. This deposit has 2 functions: firstly to put the chosen property under offer, which means that other clients will not be able to visit the property, or to put an offer in for it; and secondly, this deposit allows us to commence the legal transaction of purchase.
If you withdraw from the purchase before the “Preliminare” (see step 3 below) for any reason the sum of 5’000.00 Euro will be not refundable.
If, however, there is an irreconcilable problem with the documentation or the seller withdraws you will get the deposit back in its entirety. During this meeting we shall take a copy of your passport and ask you to sign the necessary documentation to obtain your Codice Fiscale (a legal requirement to purchasing a property in Italy). “Power of Attorney signed in Italy". Power of Attorney (“procura”) is need when the purchaser does not speak fluent Italian, and would therefore not be aware of what they were signing. This would not be allowed under the Italian law.
The Power of Attorney enables us to attend and sign the relevant documentation on your behalf. This must be in the Italian form and signed in front of an Italian Notary. This enables PAI to act on your behalf and purchase the property in your name.
Optional: “Power of Attorney signed abroad". If you can’t /don’t wish to sign the Power of Attorney (“procura”) in front of an Italian Notary we can arrange for it to be drawn up and sent to you. You can then print it off and sign it in the presence of a Notary Public in your country. We have contacts with Notaries Public in England, Scotland and Ireland who work closely with us, and so assist our clients to purchase their dream home in Italy.
Stage 2: "Compromesso" or Preliminare di Compravendita (preliminary agreement).
This is the first legally-binding document which states the agreed sale price, the completion date (Rogito-see stage 3) and any information and rights the property has. We arrange for the 'Compromesso' to be drawn up and usually is signed 1-3 months later. Once this contract is signed and the deposit (caparra) of 10% of the purchase price paid, the seller may only withdraw if he pays double the caparra (deposit) amount to the buyer. Should the buyer wish to withdraw, he will lose his deposit in its entirety.
Stage 3: "Rogito" (Deed of purchase).
The deed of purchase, final contract or 'l'atto notarile': Rogito is signed after the compromesso, and only when all the documentation is available. It is signed by both parties, the balance is paid and the property is officially transferred. We will sign the Rogito on your behalf at the notary's office by way of Power of Attorney (“procura”). When the final contract (Rogito) is signed in front of the Notary and the purchase formalities have been completed, the final balance is due. To enable this sum to be paid, PAI have to be in receipt of clear funds prior to this date. The Rogito will then be presented by the Notary to the appropriate Land Registry for registration.
WHAT DOES ALL THIS COST THE STRESS THE BELOW FIGURES ARE FOR GUIDANCE PURPOSES ONLY AND PROPERTIES AROUND ITALY IS NOT RESPONSIBLE FOR ANY FLUCTUATION THERE MAY BE FROM TOWN TO TOWN OR FOR ANY OTHER REASON OUT WITH THEIR CONTROL (i.e. Land Registration Taxes, Notary Fee, Stamp Duty, Solicitors etc.).THE FINAL SUM WILL ONLY BE KNOWN, AND GIVEN TO US BY THE NOTARY, WHEN THE DECLARED FIGURE IS AVAILABLE.
A break down of costs will be given to you at the onset of your purchase. These figures, however, are for guidance purposes only, and form no part of your contract to purchase through PAI.
Land Registration Tax
The main cost in buying a property is represented by the Land Registration Tax (Italian registration/Stamp Tax). This is the main tax on real property, which is levied at 4% to 19% of the declared value of the property. Usually if you are not resident in Italy you have to allow 11% for urban dwellings, and between 4-19% for rural dwellings. You must be aware of an Italian idiosyncrasy where the declared value of the property, which is the value lodged in the Land Registry, is different from the purchase price. Usually, the declared value for properties of high value is less than the purchase price, and vice versa.
Notary’s Fee
A fee is paid to the Notary for the preparation of the Rogito. This fee varies from town to town and is on a scale related to the declared value of the property. It is approximately 2 - 5% of the value of the property.
IVA/ Value Added Tax (VAT)
This applies only to properties bought from a company or business and replaces the Land Registration Tax. It is 10% of the declared purchase price of the property (for non-luxury properties) and 20% (on luxury homes with a rating A1 in the property register). Usually it is possible apply 10% IVA. This has to be added to the purchase price, as it is not included in the price charged by the builder or developer. If you build your own home you pay a reduced rate of IVA at 4%. When you pay the VAT for properties bought from a company or business, you will not pay the Land Registration Tax which is also 10%. You will pay either Land Registration Tax or VAT (IVA), but not both.
Agency Fee
Our agency fees are available upon request. Services included are: - Preparing the necessary documentation to obtaining the Codice Fiscale; - Completing the necessary paper work and obtain the Codice Fiscale; - Preparing the Power of Attorney to be signed in Italy or emailed to you for signature; - Obtaining the necessary documentation, and delivering this to the solicitor, in order for him to check the title on your behalf; - Referral to a Geometra who are well known to us and can be trusted for their reliability and the thoroughness of their work for checking of parcelization; - Attending the Notaio on your behalf to witness the signing of the Power of Attorney in Italy; - Attending the Notaio on your behalf to sign the Rogito on your behalf; - Arranging and attending the survey on the property (if desired); - Supervision of the entire process and ensuring timely completion of all documents; - Arranging and attending the ownership for the ICI (see running cost of your property below); - Arranging for all utility contracts to be transferred to your name.
RUNNING COST OF YOUR PROPERTY
Annual Taxes.
The “ICI” (Imposta Comunale sugli Immobili) is an annual council tax determined by the size and quality of the property. It is not very high, about 100 - 400 euros, about 0.5 – 0.6% of the Declared Value, and establish by the council (payable once or twice a year).
Refuse/ Garbage Tax. S
mall, about 100-300 euro.
Utilities.
Electricity, water, gas/oil etc for heating, phone, a small fixed fee every two months, plus payment for utilities used.
Condominium expenses.
If you buy a property which is part of a group of properties which share some communal areas – gardens, driveway, swimming pool, tennis court etc. then you will be required to pay condominium expenses. They vary as to the type and size of communal areas on the property.