Purchasing a property in Italy: essential steps
8 essential steps to find your second home in Italy
Italy is one of the five best destinations in the world to purchase a second home. It captures interest from abroad with its splendid art cities, fantastic sceneries, small historic hamlets, its beaches, its sea, and its lakes.
Italy is becoming a reference point for high-income earners seeking a prestigious property, with European and North American buyers appreciating especially luxury lakeside villas, typical Tuscan farmhouses and estates with olive groves or vineyards, or prestigious properties by the sea in Tuscany and Liguria.
The timeframe to purchase a prestigious property in Italy can vary between 4 to 6 months. It is essential to get proper professional help from a professional real estate agency, such as Broker Immobiliare Exclusive Real Estate, with multilingual consultants such as construction experts, lawyers, asset management consultants or financial brokers in order to streamline the purchase process and guarantee its legality.
8 steps that will help you in your search and purchase process for your second home in Italy are listed below:
Step 1: web search for a professional real estate agency
You can find many locations and kinds of properties by searching online, thus setting an initial budget and narrowing down your list of properties that perfectly meet your needs.
Perusing the various Italian real estate portals and websites, you will find that the Italian property of your dreams may be listed by several agencies. Don't be alarmed – this is quite normal in Italy and will not affect your chance to buy the property.
Among several real estate ads for the same property, we recommend that you choose the ad from the real estate agency that seems more professional to you compared to other agencies, judging by simple criteria such as the quality of photographs, accuracy of data, and the thoroughness of the description. Moreover, you should also evaluate the professionalism of the real estate agency by their speed in responding to any of your requests, either by phone or by email.
Step 2: define you preferred area and type of property
Take your time to explore the pros and the cons of each geographical area while considering your needs, such as proximity to airports, main services, seas or lakes, hospitals or schools, etc. i.e., those services and attractions you need to have nearby.
Try also to understand which kind of property is the right one for you – an apartment, a penthouse with terrace, a modern or historic villa, a typical farmhouse, or an estate with lots of land with a vineyard or olive grove.
Furthermore, decide if you prefer a newly built or well-kept and renovated property, or if you are willing to manage renovation works – and to what extent to do so.
Step 3: planning home tours
While you can view the properties you’ve selected online through virtual tours, an in-person tour is always the best way to get an idea of the place.
First contacts with real estate agents – especially by phone – are especially important for the agent to understand your needs and your real estate research criteria.
Professional help from real estate agents in essential, as in some cases they will also provide the property’s exact geolocation as well as more details before visits are scheduled, as well as highlight the selected property’s pros and cons compared to your needs.
Once you have selected properties that interest you with your real estate agent, plan in advance your stay in Italy and schedule your visits, and allot necessary time to visit several properties, so that you can have time to get a feel both for the property and the surrounding area.
Step 4: open a bank account in Italy and apply for you tax code (Codice Fiscale)
If you decide to purchase a property in Italy, you will need an Italian bank account, which you must personally open. Before opening an account, you will need to obtain your tax code and have your identity documents with you (passport and ID card). You can apply for your tax code either at the Italian Embassy in your home country or at any Agenzia delle Entrate (Italian tax authority) in Italy. This code is essential for nearly ecery basic activity in Italy, including opening your bank account. You can rely on advice from Broker Immobiliare Exclusive Real Estate for these tasks as well.
Although it is not essential to open an Italian bank account, as you can rely on your Italian Notary, it is much more convenient and money-saving to have a bank account in Italy to manage your new second home.
Step 5: purchase proposal, preliminary agreement or “compromesso”
Once you have chosen the property of your dreams, the following are essential in real estate purchases in Italy: a purchase proposal drafted by the real estate agency or a notarized preliminary contract, also called “compromesso”.
In the purchase proposal, the buyer proposes the sale price, the timing of the various payments, and the final date to make the final deed of sale.
The proposal will also include other clauses which can suspend and terminate the contract, the most important of which are that the current owner has come into ownership through legitimate title deeds and that the property complies with the Italian urban and cadastral regulations, i.e., that the property has been legally built and can be legally sold.
At the time of the purchase proposal, proof of payment of between 10% and 30% of the purchase price must be attached as a commitment and confirmation of the purchase of the property.
While waiting for the various legal, administrative, and town planning / cadastral verifications, this amount will be kept by the Notary or by the Real Estate Agency as a security deposit (earnest money).
For this purpose, Broker Immobiliare Exclusive Real Estate, has its own bank account specifically for financial transactions for real estate.
Both the purchase proposal and the preliminary contract, or “compromesso”, are legally binding contracts.
Step 6: property due diligence
The due diligence process must ensure that everything concerning the property is in order, that the current owner has come into ownership through legitimate title deeds, and that the property is conforming with Italian urban and cadastral regulations, i.e., that the property has been legally built and can be legally sold.
For these conformity reports, which the notary requires before the deed of sale, you can also hire a professional expert (“perito”), an architect, an engineer, or a surveyor. The price of these reports starts from about 1,000 euros + VAT and can increase depending on the size of the property. You can rely on advice from Broker Immobiliare Exclusive Real Estate for these tasks as well.
If you apply for a loan or for financing from a credit institution, the Bank's appraiser (“perito”) will also require the conformity report before approving the financing. Their appraisal is usually a basic estimate (valuation) to ensure that the property is worth the purchase price.
If you plan to renovate, add on to the property, or build a swimming pool after the purchase, the same professionals responsible for preparing the compliance report will be able to advise you on the feasibility of your future construction plans and possibly estimate a cost for the works.
Step 7: taxes, expenses, and real estate agency commissions
Aside from the price of the purchased property, there are other expenses to the borne, which can be summed up in three main points:
- The purchase taxes to pay to the Italian State though the notary, who will function as “tax substitute” (“sostituto d’imposta”). These costs can be exactly defined only after having chosen a property to purchase, as they vary according to the application of certain parameters such as the cadastral income of the property and its land, which differ from property to property. Costs also vary depending on if you purchase the home as main residence or as a holiday home. Variations also depend on if the property is sold by a private individual or by a company.
- The notary's fees which, for a property worth one million euros, can range from 3,000 to 5,000 euros plus VAT. In the case of a double notarial deed – preliminary agreement and final deed – the above prices do not double, but will still increase, as two separate deeds will be drawn, just like drafting an additional deed for the loan or financing with the bank.
- The real estate agency commission for brokerage can range from 3% to 6% of the purchase price, as well as applicable VAT.
One you have chosen a property that interests you, Broker Immobiliare Exclusive Real Estate will be able to draw up a quote detailing all these costs. Moreover, our team will translate all documentation, including notarial deeds, which will be in two languages for foreign buyers.
Step 8: the final deed of sale, “rogito”
Lastly, one the validity and legality of the purchase have been guaranteed, you can sign the final deed of sale, or “rogito”, with both the buyers and sellers appearing before the notary. This is the final contract, and you are now the legitimate owners of the property. You are now required to pay a purchase tax, notary fees, and real estate agency commissions.
If you are seeking a multilingual team of true professionals who firmly believe in the success of each endeavor, striving for high-quality every day, check out our professional services and contact us to purschase a property in Italy.