Country Buying Guides - Italy

The conveyancing process

• Independent Lawyer
It is essential to use an independent lawyer with a legal knowledge of both the English and Italian legal systems, who are able to translate the documents and explain the terms to your full understanding.

• Due Diligence
It is important to carry out due diligence on the property you are purchasing in order to ensure there are no encumbrances on the property. Your independent lawyer will do this on your behalf.

• Proposal of Purchase
The proposal of purchase (compromesso, or proposta d’acquisto) is the first written step, by which the purchaser binds themselves to buy the property at a named price for a set period, generally up to a month. During this time, the vendor is free to consider other offers.

• Preliminary Contract
When the offer is accepted, the purchaser pays a deposit (usually 10%), and the preliminary contract of sale (compromesso di vendita) is drawn up by a notary (notaio), who acts for both sides. Included in this document are the formalities of the sale, including any conditions. If the purchaser breaches the contract, they forfeit the deposit. If the vendor does so, they must pay the purchaser twice the amount of the deposit.

• Completion
Completion occurs generally 6 to 8 weeks after the preliminary contract is. At completion the title to the property passes from the vendor to the purchaser by a deed of sale (il rogito). There are two types of deed, public and private. The public deed is more expensive but offers a higher level of protection. If a property is bought through a private deed and is subsequently found to have a charge against it (such as a mortgage), the notary cannot be held responsible, whereas if a public instrument has been used, legal action can be taken against him.

• Registration
Following completion, the notary issues a certified copy of the deed of sale and registers the original document with the Land Registry, thus formally completing to property’s transfer.

• Costs
Many properties in Italy are freehold. The total fees for buying a property are between 10 to 20 % of the purchase price. Among the costs are: Land Registry fees fee: 1%, Registration Tax /stamp duty: Around 7%, Notary fees: generally about 1 %, IVA (Italy’s equivalent of VAT), between 4% and 10%, depending on the vendor. Although there appears to be many costs, this is generally the case in any property purchase.

• Fiscal number
Everybody who has financial transactions in Italy must have a tax ID number (codice fiscale) and complete a tax return. Both residents and non-residents alike may be liable for taxes on income, capital gains and inheritance

• Taxation: residents
A resident is for tax purposes, anyone staying in Italy for more than 183 days during a tax year, which in Italy is the same as the calendar year. The 183 days need not be consecutive.

• Inheritance
Most foreign legal systems’ inheritance law is different to our system, Italy however is no different, hence it is extremely important to use your independent lawyer to help you make a will so that in the unfortunate event of your passing, your wishes and not the word of the law is followed.

• Taxation: non -residents
Britain and Italy have a double taxation treaty meaning that tax is only payable in either country, not both. These vary from case to case depending on situation. There is no wealth tax in Italy.

In Assocation With The International Property Law Centre LLP