15 Crucial Things to Know to Buy a Property In Italy As a Foreign Buyer
It’s not a news: we are fans of the bullet points, especially when they enable to get the big picture of multifaceted stories like the process of buying a property in Italy.
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Buying a property in Italy is very easy: there are no restrictions for foreign nationals to buy a second home.
To buy a property in Italy and to open the Bank Account, we need the Italian Tax Code (the so called Codice Fiscale). Doing it, it’s easy and free of charge: it takes us just few minutes!
We can organize for you, after the purchase, all the utilities’ automatic payments like electricity, gas, water and rubbish tax. Again, this is possible just opening a bank account.
An accountant assists our clients for all that concerns the Property Tax IMU. This tax has to be paid twice a year (one installment in June and one in December) and it’s calculated on the Cadastral value of the property.
If you are buying a brand-new property, bear in mind that in Italy kitchens and glass showers are never supplied by the Builder.
Builders, in order to cover major construction damages, must guarantee the property with a ten-years special insurance due by law. A guarantee of two years is set for all gas, electricity and water systems; one year on small defects of the property.
If you can’t attend the Notary Deed, you can involve a Lawyer or someone you trust, signing a power of attorney at the closest Italian Consulate of your country (or, if you are still in Italy, you can do it with an Italian Notary).
Italian banks recognize to international clients up to the 60% of the value of the property they want to buy.
Closing in advance your mortgage is possible, without any penalty!
For non-residents, Capital Gain Tax is 20% if the house is sold within 5 years. So, if you bought a property for € 100.000 and sold it for € 150.000, it means you will pay a tax of € 10.000. After 5 years, no more taxes are required. Real Estate fee, Notary, Renovation expenses can be deducted from the total amount, before calculating the final one to pay the Capital Gain Tax on.
Residents can skip this 20% tax just buying again another primary home within 12 months.
In Italy the Real Estate Agency fee (equal to 3% + VAT on the final agreed price) is paid both by the buyer and by the seller.
Succession Rights in case of death are not due.
If you are facing a renovation project, be aware that some works can’t be done by yourself, due to the Italian Work Security Law. Also, consider that the construction rules in Italy are different from the other countries’ ones. The same goes for Technicians: don’t hire your sister in law’s cousin! He might not have the legal signature for projects in Italy and for Security on construction site.
The deposit (Caparra confirmatoria) that you pay to the Seller is regulated by Article 1385 of the Italian Civil Code, which says: « if upon the closing of a contract one party gives the other a sum of money or a certain quantity of fungible goods, to function as caparra, in case the obligations thereunder are fulfilled, the caparra must be returned to, or set off against the obligations of, the payor.  If the party who paid the caparra fails to perform her obligations, the other has the right to withdraw from the contract and keep the caparra; if the party who received the caparra fails to perform her obligations, the other party has the right to withdraw from the contract and demand twice as much the amount of the caparra.  However, if the party who is not in breach of contract prefers to demand the other party be ordered to perform, or the contract be terminated on account of default in performance, the compensation of the damages will follow the general rules of law».