The Rules of Buying Italian Property for Foreigners

Step 1. Prepare for the deal

Getting the tax identification code

First thing you need to start with is to get an Italian fiscal code (codice fiscale). It is a tax code with your personal data. You need this code to conduct many kinds of transactions involving local authorities such as getting a medical insurance, getting hired, conduct of business, signing contracts, dealing with utility service providers, etc. 

You can get one in Italy by visiting the local tax offices and showing your passport or ID. You can also apply for an Italian fiscal code at the Italian consulates in your country.

Opening a bank account

Potential buyers like you usually open an account in an Italian back for subsequent payments. They transfer the necessary amount of money from an already existing account in their country. In the future it can be used for utility payments.

Another option is to pay straight from international accounts, but there is always a risk of delay. Which is very important to take into consideration, because money must be on the seller’s account before signing the sale contract.  

Step 2. Reserve the property

Preparing an offer for property

Bargaining is a traditional element of the Italian real estate market. But all negotiations are conducted in writing. You can consider it as a local feature. First of all, the buyer makes a written offer to the seller, who can either agree immediately or propose conditionality. Offer must include desirable price and terms of the future contacts.

Making a deposit

The buyer transfers the deposit for property when the seller accepts buyer’s offer. Usually, it is 5-10% from the total cost. 

If one of the parties decides to sabotage the deal, they have to face serious financial consequences. Thus, the buyer can lose their deposit, but the seller must return the deposit at the double rate. And don’t forget about penalties which are written in the offer as well. 

Foreigners and local residents of Italy have equal rights to buy real estate at the legislative level

Step 3. Conclude a contract

Concluding a preliminary agreement

It is common to start with a preliminary agreement, but not necessarily. Generally such agreement is signed, if the deal takes a long time, includes big transactions or one of the parties insists on it. The final contract can be signed, if the buyer is ready to pay the whole sum at once. 

The preliminary agreement must be notarized and contain the following information:

• personal data of a buyer and a seller;
• the price of a property, the payment procedure and the amount of deposits made;
• description of a property, inventory data.

The notary begins to check the property documents provided by the seller after signing the agreement. They have to check whether the seller is really the owner, whether the property is pledged, or whether there are any other reasons that prevent the final selling deal. If the check shows that it is impossible to sell this object, the transaction is failed due to the fault of the seller, who bears financial responsibility to the buyer in a form of a double deposit amount.

The seller does not have a right to backtrack the deal after signing the preliminary agreement. The transaction is considered completely irreversible.

At this stage the buyer pays to the real estate agent.

Concluding the main real estate contract

The main sale contract (Contratto notarile di compravendita) is signed by the seller and the buyer and has to be notarized. But before that a notary has to read the contract out loud and exclude variability in understanding of it’s points.

For those buyers that don’t speak Italian conclusion of the contract goes according to the following scheme:

1. A translator and 2 witnesses take part in the process of conclusion. The buyer is the once who pays for their service. The contract must be written in 2 languages.
2. The buyer issues a power of attorney for an Italian-speaking representative.

It is very important to remember that the buyer also has to pay for the notary’s service and necessary taxes beforehand. Only after covering these expenses the contract can be signed. The property must be paid for at the same stage of the deal and confirmed with checks or pre-payment bank transfers. 

Step 4. Final settlement

Payment in Italy is made by bank checks. A bank check is a financial document made by the bank, where the buyer opened an account. The buyer must give the bank check to the seller at the same day when the contract is signed. 

Another common type of transaction is a payment straight to the seller’s account or a notary's trust account (which is even safer). The notary passes the money, when every term of the sale contract is met.

The transaction must be paid in euros. Therefore, remember about conversion costs, if your funds are stored in a different currency. It is totally forbidden to pay for real estate in cash.

Step 5. Registrate as the new owner

The transaction is officially registered after signing the main sale contract. The notary transmits all information to the relevant state authorities. That involves the cadastral office, the real estate registration chamber, and the tax office.

Registration of ownership takes from several days up to 3 months, depending on 
the cadastral office’s municipality. But transfer of title is given with keys at the moment of signing the main contract.

The notary issues a certificate of the transaction immediately after signing the contract. The original sale contract is received by the new owner after registration with the state authorities.

Quoting conditions of Prian.info materials