It has been quite a time coming, but the signs are that Italian property has turned the corner.
That is, prices have bottomed out and are now forecast to show a cautious rise for the first time in a long time.
It means that this spring and summer, you have a fabulous proposition ahead of you: a best of all words with a fabulous choice, beautifully priced.
The further good news is that buying in Italy is straightforward, and open to buyers from all over the world. Below is a basic guide to how their system works.
A GUIDE TO BUYING IN ITALY
As with any property purchase in any country, it is always advisable to gain the help of reputable and independent legal and property advisers when you propose to buy in Italy.
MAKING YOUR OFFER
Purchasing property in Italy is usually a three stage process. When you make an offer to buy, this needs to be made in writing by way of a formal Purchase Proposal and this should be accompanied by a deposit (which can be up to 5% of the purchase price). The deposit can be held in escrow. It can be a good idea to put a time limit on your offer and make it subject to due diligence.
THE PRELIMINARY CONTRACT
Once the formal details of the sale have been agreed between the buyer and vendor, and their legal representatives and the due diligence completed, the preliminary contract can be entered. This is a formal agreement drawn up by the agent, lawyers and, in some cases, this contract is also notarised. The contract stipulates all terms of the sale/purchase and is typically accompanied by a further deposit payment between 10%-20%. Again this deposit can be held in escrow or paid directly to the vendor. If the seller changes his mind, he will have to pay you double the deposit you have lodged.
THE DEED OF SALE (‘ROGITO’)
The public notary prepares the final deed of sale known as the rogito, whilst also carrying out land searches and so forth. The notary is a public legal body who represents both the buyer and the vendor, and collects the necessary taxes on the sale/purchase. It is the buyer who may choose which notary they wish to use.
THE COSTS OF BUYING
The main costs met by you, the buyer are:
Lawyer’s fees : 1-2% + IVA
Notary’s fee : Approx. £3,000 + VAT
Estate Agent’s fee : 3% + VAT
Tax on property : is calculated at 9% of the value according to the land registry. On resale properties the land registry value is typically lower than the sales price, often by as much as 30% to 50%.
Tax on land : is calculated at 12% of the land value. The notary will decide an appropriate value for the land in line with land prices in the area
NB:If you pay for your purchase with funds from outside Italy, be sure that the records are officially documented. Any later sale proceeds can then be repatriated.
ONGOING TAXES
Property owners pay income tax based on the theoretical rental income of the property. However, non-residents in Italy are subject to this tax only if the income exceeds a certain threshold.
Council tax (‘Imposta Municipale Unica’) is based on the land registry value of the property and is collected by the local authority twice a year.
You do not pay Capital Gains Tax if you sell the property more than five years after the purchase.
The above is intended as a broad guide only and should not be construed as advice. It is essential that buyers seek independent legal and taxation advice on every aspect of their purchase. All costs quoted are subject to revision and change.