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A brief guide to purchasing or building a property in Italy

Step 1: Making an offer

Once you have decided on purchasing a property, you will have to submit an irrevocable purchasing offer, called “proposta irrevocable” which is binding for a limited period of time and serves as a confirmation of your intention to purchase the property. As proof of your commitment, you will hand a previously agreed deposit to the notary, who will return the deposit to you, should the vendor not formally accept your offer within a certain period of time. If the vendor does accept your offer, the agent will hand over the deposit to the vendor.

If, for any reason, you are no longer in a position to purchase the property after your offer has been accepted, the deposit will remain with the vendor. If however the vendor, at this point in time, is no longer prepared to sell the property to you because he may have received a higher offer, he is obliged to hand back the deposit interest free.

If everything goes according to plan, the next thing to do will be to set up a pre-contract.

Step 2: The pre-contract

The most important step to buying a property is the pre-contract, called compromesso or preliminare di vendita in which both parties commit to entering the final stage of setting up the definitive purchasing contract. The pre-contract is law binding.

The pre-contract contains all relevant information on the property, on the buyer and the vendor, on the price and the method of payment.

To seal the pre-contract, the vendor has to make a down payment of 10 – 30% of the purchasing price. The down payment can be done by bank transfer or by cheque.

The basic rule of the caparra confirmatoria is, that should the buyer fail to honour the caparra confirmatoria, the vendor is entitled to keep the down payment. Should however the vendor fail to honour the contract, he has to return the down payment plus a fine of the same amount.

Every pre-contract needs to be registered with the finance office. It is the estate agent’s responsibility to register the pre-conrtact.

Registering the pre-contract involves the following costs:

Register fee: 200 €
Fee tokens : 50 – 80 €
Down payment land tranfer tax: 0.5% of the initital down payment (caparra)

Step 3: Notary contract

On the day the notary contract is completed, all demands laid out in the pre-contract have been met, the property changes ownership and the full purchasing price becomes due. The buyer chooses the notary. The payment is made at the moment of completion of notary contract and it's possible via an escrow account from the notary. 

At the moment of completion, the following charges become due:

Land transfer tax on buildings (purchase as 2nd place of residence): 9% * minimum 1.000 €
Land transfer tax on buildings (purchase as 1st place of residence): 2% * minimum 1.000 €
Land transfer tax on building land : 9% minimum 1.000 €
Land transfer tax on agricultural land : 15% minimum 1.000 €
Mortgage tax : 50 €
Land registry fee : 50 €
Notary Fees : 1-2.5% of the purchasing price approx.
Estate agent commission : 3% of the purchasing price plus VAT

*The land registry value is based on the registry income, which can be looked up in the registry statement. The land registry value of a property is well below the purchasing price.

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