Generally, real estate contracts in Italy are subject to the Italian law. If you have found the property of your dreams the purchase process is divided into three steps:
1) The offer – “impegnativa d'acquisto“
As soon as all aspects of the purchase have been negotiated (between the seller and the potential buyer) a letter of intent to purchase will be signed. This written offer ( impegnativa d’acquisto) is usually passed on to the buyer by the estate agent together with a payment of 2% of the purchase price in advance.
This prepayment confirms the potential buyer’s interest in buying but, also, prevents the seller from carrying on negotiations with other parties. Signing the letter of purchase intent contractually undertakes to apply legally binding signatures to the Deed of Sale ("contratto preliminare oder compromesso”).
2) Preliminary contract (“Contratto preliminare / Compromesso”)
This is a private- not a notarial- document that includes all contractual terms such as sale price, property size, location, conditions of payment, et cetera. When signing the heads of terms agreement, usually, 20-30% of the sale price will be paid in form of a bank-confirmed check or bank transfer. In the preliminary contract the seller guarantees that the estate is free of any legal or financial debt. The preliminary contract is a private contract, nevertheless, we recommend involving a notary. The notary assures that property is charged by no debts or liens and is up for sale. Furthermore, the estate will be checked on all required approvals of the building.
The advance payment is to be regarded as security guaranteeing the compliance of the contract by both parties. If you consider refraining from the contract the seller may keep the prepayment as contractual penalty. If the seller wants to abdicate from the contract twice the amount of the prepayment has to be refunded.
Since January 1, 2007 every heads of terms agreement has to be registered at the finance office within 20 days. Costs amount to 168€ + approximately 50-80€ for fee stamps.
As soon as the preliminary contract is signed, the broker has fulfilled his task.
3) Contract certified by a notary
Within 1-3 months after signing the preliminary contract the final Deed of Sale will be signed. When signing the final contract the ownership of the sold estate is transferred to the purchaser and the remaining amount will be due. The notarial fees, the land purchase tax, as well as the registration costs are due paid, too. This contract will be deposited at the register office. As the buyer you should be informed about the specific costs directly linked to the purchase of an estate. At the time the contract is signed the entire purchase price, less the payments in advance, is due (commonly in form of bank checks and cash)! The signing of the Deed of Sale and the payments will result in the direct acquisition of property (unlike in Germany!).
In addition to the purchase price the following extra charges are incurred:
- notary Fees ( ~ 1- 2,5% of the purchase price)
- costs for the inaugurated translator (if needed; ~ 400€)
- tax on acquisition of real estate (secondary residence): 10% of the cadastral value*
- tax on acquisition of real estate (primary residence): 3% of the cadastral value*
- tax on purchase of agricultural property: 18% of purchase price
- fee stamps: ~ 1% of purchase price
- commission of the real estate agent in Italy (due at the primary contract): 3% plus 22% VAT.
* The cadastral value is determined by the cadastral revenue (rendita catastale). A cadastral map excerpt reveals the revenue. Generally, the cadastral value is significantly lower than the current market value.
The information above is no legal advice. While we endeavour to keep the information on this website as accurate and complete as possible, we do not warrant, nor accept any responsibility or liability for, the accuracy or completeness of the content.