Buying Property in Italy: Step-by-Step Process and Mistakes to Avoid

As in any other country, buying property in Italy has several nuances. The leisurely pace of life also affects the speed of bureaucracy, which is why minor precedents arise that can fray the nerves of a potential buyer.

There are indeed plenty of subtleties — just look at the frivolous attitude of some Italians towards translation. If a seller considers it necessary to involve a translator in a transaction, he does not always insist on his qualifications or even registration with the Chamber of Commerce.

In our article, we will dig into the very essence of the rules and peculiarities of making a deal in Italy. Along the way, we will explain why it is important to involve qualified specialists and whether Italians love to bargain as much as they write about.

Preparing to Buy Property in Italy

Not all foreigners can buy real estate in this country. The fact is that the Italian government adheres to the Principio di reciprocità, or the principle of reciprocity. The idea is simple: if other countries prohibit Italians from buying real estate, then citizens of these countries cannot buy housing in Italy.

The official website of the Ministry of Foreign Affairs and International Cooperation of the Italian Republic even has a special section with the rights and opportunities of Italians in a specific country.

The list will help you understand whether you can buy real estate in the country, and if so, what kind. It is enough to see what Italians can buy in your country. One minus: documents are exclusively in Italian. You can use an online translator, but it is better to hire a lawyer.

The restrictions under the Principio di reciprocità do not apply to citizens of the European Union, foreigners and refugees who have lived in Italy for more than three years, as well as holders of a permanent residence permit.

Fiscal Code

If you are allowed to buy property in Italy, you will need to obtain a Codice Fiscale, or Taxpayer Identification Number (TIN). Without it, you will not be able to:

• Open a bank account.
• Buy real estate.
• Conclude a contract.
• Obtain a residence permit.
• Work and do business.

You can obtain a Taxpayer Identification Number (TIN) through local authorities while you are in Italy:

• Office of the Agenzia delle Entrate (Italian Tax Agency). EU citizens only need to have a passport or ID card. Citizens of third countries need to provide a valid visa or residence permit (Permesso di Soggiorno). After that, you need to fill out the application form for a tax identification number AA4/8 and provide the address of the tax domicilia (dove fiscale) — they will send the card there. If there is no address in Italy yet, the field can be left blank: it is not required to issue the code, and the card will only come upon request.
• One Stop Shop for Immigration (Single Window for Immigration). Those who enter Italy on a work visa or for family reunification should contact them. You can find the address of the nearest office through the website of the Ministry of Internal Affairs. You need to bring your passport with a visa and an application for entry into the country. When the application is processed, you will be automatically issued a Taxpayer Identification Number (TIN).
• Questura (police department). Through it, a Permesso di Soggiorno (residence permit) is issued or extended. That is, a permit to stay in the country longer than the standard visa-free period (for EU citizens) or Schengen (for citizens of third countries). You must have an identity card and an application for a residence permit with you. The TIN will be issued together with the residence permit if you specify in advance that it is necessary.

Codice Fiscale can also be obtained outside Italy, through a consulate in your home country, but processing will cost €20—€30 (although the service is free within the country). You will need identification, a completed AA4/8 form (the consulate may provide another one), and a written reason for the request (e. g. buying real estate, inheritance, preparing to move). Processing takes from a few days to 2–3 weeks, depending on the consulate’s workload.

If you are unable to do the paperwork yourself, you can write a power of attorney (procura). It must be translated into Italian, signed and certified with an apostille by a notary. With it, the authorized person can officially act on your behalf.

The Process of Purchasing Real Estate in Italy

Now that you have confirmed that you can purchase properties in Italy and have obtained a Taxpayer Identification Number (TIN), you can open a bank account. It is mandatory for conducting financial transactions in the country. Then you can start choosing real estate. Have you found it? Great, but don’t rush, first contact the Italian Tax Agency (Agenzia delle Entrate) and request an extract from the cadastre (Visura Catastale). From it you can understand:

• Is the seller the legal owner of the property?
• Are there any debts, mortgages or court restrictions on the property?
• Do the characteristics of the property in the cadastre and in the advertisement correspond?
• Legality of the object.

This is not just a recommendation: according to the Italian Civil Code (Article 1470 et seq.), the buyer is obliged to check the legal status of the property before signing the Contratto Definitivo (final contract). The notary who certifies the transaction will also ask for Visura, but one does not interfere with the other. If the seller refuses to provide data for verification, this is a reason to be wary.

Preliminary Agreement and Contract

If the property and its owner are clear before the law, a preliminary agreement (Accordo Preliminare) or preliminary contract (Contratto Preliminare) can be concluded. There is a difference between them, but it is very conditional, which is why they are often confused. And this does not include the Proposta d’Acquisto (agreement of intent). But we will not consider it, because in fact it is a unilateral statement from the buyer that he is laying claim to the purchase of the property. Its presence does not oblige the seller to anything, although sometimes it becomes the basis for concluding a preliminary agreement.

An Accordo Preliminare (preliminary agreement) is a less formal type of agreement between a seller and a buyer than a contract. It is used as an intermediate step before a Contratto Preliminare if the parties are not yet ready to commit. It sets out the terms of the transaction, but since it is not usually registered with a notary, their violation is more difficult to prove in court, let alone recover compensation.

The whole process should go from Proposta d’Acquisto (agreement of intent) to Accordo Preliminare (preliminary agreement) and end with a preliminary contract (Contratto Preliminare), which smoothly flows into the final one. But in reality it is different and the seller is often ready to sign a notarial deed of sale only on the basis of an agreement. There are other cases when the parties do not waste time on an agreement, but immediately sign a preliminary contract.

The main differences between a preliminary agreement and a contract:

Lawyers recommend always concluding a contract, but if you really want to save money, then for inexpensive properties you can use an agreement and a contract only for luxury apartments and villas.

Preparing for the Deal

When concluding a preliminary contract/agreement, it is necessary to check the footage and layout of the property with the cadastral data. If there is even the slightest discrepancy (literally if a wall has been moved), then you need to tell the seller to update the data in the cadastral register. This is a relatively quick process (1–2 weeks), and the owner pays for it (€500—€2,000). This is necessary so that the legality of the transaction is not called into question.

If everything is in order, the contract/agreement should clearly indicate not only the cost of the property, but also how much you are willing to pay for it. If the seller agrees with the amount, he signs it. However, bidding when buying real estate in Italy is a very controversial phenomenon. Of course, you can get a discount, but it all depends on the situation.

Italians are most willing to give a discount on the VAT amount, but rarely more than 5%. For your first and main home in Italy, it will be 4%, for the second, 10%, and for luxury real estate, 22%. Moreover, VAT applies not only to new housing but also to properties after major repairs. But this is for new buildings; for secondary housing, the discount can reach 15% (although VAT is 2% for the main home, 9% for the second + fixed fees of €500).

The financial part of the contract specifies the terms of payment: the percentage of the deposit, the term of its payment, and the payment of the remaining amount. Then it specifies the date by which the transaction must be completed and how much time the seller has to think it over. The term may vary, but, as a rule, 3–5 days is enough for the seller to give an answer.

If he agrees, the completed agreement is registered with the tax authorities, after which the documents are sent to the notary. He checks the object’s purity once again and draws up a document with its entire history: how long the object was built, whether there were any additions, whether there were any stops during construction, what repairs were carried out, and so on.

Basic Transaction Process

The seller, buyer and notary agree on the date of signing the notarial deed. This is an approximate date, since in cases where it is not possible to receive the documents on time or force majeure occurs, the transaction can be postponed. Most often, it is by this date that financial obligations must be closed via a bank check (assegno circolare).

When the time comes, you will need a witness (Article 47 of the Notary Act). He is needed to act as a witness in court in case of disputes between the parties. He must understand your language and confirm that you have listened to the version of the contract in your language and have familiarized yourself with its contents. The same person must be on the seller’s side.

Ideally, you should also invite a translator who understands both languages ​​to the deal. A specialist with an electronic translator will not do; you need a licensed professional. You should also use his help when translating documents. This will cost about €600—€1,500 depending on the history of the property, but in the event of a translation error, you will have someone to hold accountable. If everything goes smoothly, the deal is concluded and you receive the keys.

Pitfalls of Buying Property in Italy

There are many small nuances, and problems can arise at the very beginning. For example, you decided to buy a plot of land through a local realtor. He has prepared everything, and you have already made a deposit, and then it turns out that you do not have the right to buy the land — only a house or an apartment. In this case, the deposit will be returned partially, the litigation will drag on for months, and the agent will wash his hands of the commission for the services rendered.

This scenario is quite likely if you save on a specialist who will conduct the transaction. We are talking not only about a realtor, but also about a notary. The fact is that in the situation described above, the notary will have to contact the Ministry of Justice. However, if they do not want to take responsibility, the final decision on the transaction will be made by the notary. It is better to hire specialists with experience working with foreigners or cooperate with an international company, especially if you are buying expensive real estate.

The second important nuance is the payment for the property. There are several options: put the money into an account in an Italian bank and transfer it to the seller from there, or transfer the money directly from abroad. Both options are suitable, but for better safety of funds, it is more reliable to agree in advance on the possibility of transferring funds through the notary’s bank account. This way, you can easily get your money back, even if something happens to the seller.

A frequent problem, especially in the southern regions (Sicily, Calabria and Apulia), is Abusivismo edilizio. This term refers to the construction or modification of real estate without the necessary permits from local authorities. This may be:

• An extension to a house without permission.
• A balcony or terrace that is not included in the plan.
• An entire floor built illegally.
• A house on land where construction is prohibited (for example, a nature conservation area).

Buying such an object will oblige the new owner to pay from €1,000 to €50,000 out of pocket, depending on the scale of the violation. Moreover, the commune has the right to demand that the illegal part be demolished, again at your expense. Banks and notaries, in turn, will refuse to work with such an object until it is put in order. If the object is completely illegal, the court can completely annul your transaction.

Visura Catastale does not help, as it shows cadastral data but does not reflect the compliance of the building with building regulations. To check the legality, you need a Certificato di Destinazione Urbanistica (CDU) — it confirms that the object was built legally, and the land under it complies with urban development plans (Piano Regolatore Generale). It can be requested from the commune where the property is located.