The Buying Process
Find out the steps involved in buying a property in Italy...
Find the property
The fun bit is looking at and choosing a property. However, a bit of preparation can make this more enjoyable. Work out what you are looking for by identifying the area and what sort of property you are looking for. A holiday home is very different from a retirement home. How close to the airport do you want to be? How many visitors do you anticipate having and therefore how many bedrooms will you need? What are the local amenities like?
Survey and Valuation
It is always advisable to obtain a survey and a valuation on a property and exactly the same reasons apply when you are buying a property in Italy as they do when you buy in any other country. You need to make sure that you are not paying too much for the property and also that you understand what you are buying and the sometimes hidden details of condition the property is in.
Searches on the property
Searches need to be carried out on the property just like you would do anywhere else (although the actual process is likely to be different). You or your lawyer needs to make sure that the seller actually owns the property, that the property is correctly registered and has the appropriate planning permission, and also that any charges on the property are fully disclosed. The Notary will carry out such checks at the end of the process immediately prior to signing the title deed but it is vital that these searches are also carried out prior to signing the contract and paying a deposit.
Purchase contract (Compromesso) and deposit (Caparra confirmatoria)
Assuming that the searches come back satisfactory then a contract needs to be drafted up, agreed between the parties and a deposit paid. This commits the seller to sell to the buyer and commits the buyer to purchase the property. If the buyer pulls out they would normally lose their deposit. If the seller pulls out then normally the buyer would get double the deposit back which is a clever mechanism that exists to stop gazumping*. The contract will set out the conditions of the purchase (price, deposit, what is included in the price, date for signature of the title deed etc).
*Angloinfo Edit: Gazumping is a last-minute withdrawal from the purchase contract when a higher offer is received for the property. While generally considered unethical, gazumping is still legal in many countries.
Arrange Power of Attorney if necessary
Signature of Title Deeds in Italy is carried out in front of a Notary Public. This must be done in Italy so if the buyer prefers, it is possible to grant a Power of Attorney to somebody else who can sign on their behalf. A Power of Attorney is just a document that confirms that the person has been given authority to do certain things in the buyer's name - in this case, sign the Title Deeds.
Obtain Tax Code (Codice Fiscale)
You will need a Tax Code when you buy a property in Italy. Not only will you need this when you buy but you will also need it when you open a bank account, take out insurance, buy a car or deal with the tax authorities.
Sign title deeds (Rogito)
The signature of the title deeds in Italy is done between the buyer and seller (or their representatives via a Power of Attorney) in front of a Notary Public. The two sides physically get together in front of the Notary to sign the new deeds. Immediately prior to doing this the Notary should carry out last minute searches to make sure that the property is still registered in the name of the seller and to identify any charges on the property.
Once the title deed has been signed the purchase needs to be registered at the Land Registry and the appropriate taxes paid. The taxes that are payable vary depending on whether you are buying a resale or a new property, the value of the property, and also whether the property will be your permanent residence or not.
Make an Italian Will
It makes sense, at this stage, to make an Italian Will to make sure that your wishes are adhered to in the event of your demise. This will be even more important from August 2015 when a new European Directive comes into force. This new directive means if you are resident in a country then it will be the law of your residence that applies to your assets rather than the law of nationality unless you have made a Will to cover the assets in that country.
You are required to name a Fiscal Representative who will act as your liaison with the tax authorities.