Italy is a dream country, but if you are planning to move there or invest in local real estate, it will be useful to know how such transactions happen.

The Best Place to Buy Property in Italy

Choosing a region is the first thing to pay attention to.

You need to determine what is important to you and decide what budget you intend to spend.

For example, if you decide to buy a cottage by the sea, but still want to travel, real estate on the islands of Italy – Sardinia, Isca, Sicily – will not suit you. These are good resort regions, but they have serious restrictions in terms of movement. Real estate on the coast of Liguria, Tuscany, the Adriatic, or other coastal regions is more suitable for you. For example, you can check out property for sale in Scalea, since it is an affordable sea resort.

If you are going to rent out an object, please note that the rental market on the coast and the lakes are mainly seasonal. To conclude long-term contracts, consider large cities with universities, and offices of large companies, such as Milan, Turin, etc. They have a constant demand for rent, which does not depend on the season, as well as higher prices.

Can Foreigners Buy Property in Italy?

In Italy, equal rights to purchase real estate in the country for foreigners and locals are even at the legislative level. Foreign buyers do not need to request permission from the local authorities or obtain a residence permit in Italy to purchase real estate.

Owning real estate in Italy is a sufficient basis for obtaining a multiple-entry Schengen visa. You can stay in the country for up to 90 days in 6 months and travel to other Schengen states. If you want to stay in Italy longer than the visa allows, you need to get a residence permit.

You can get a permit by declaring your intention to live in Italy and proving that you have enough funds for this (the basis of "Chosen place of residence"/ residenza elettiva). When considering an application for a residence permit, the presence of real estate in the property will be considered an advantage.

Buying a Property in Italy Step-by-Step

Step 1. Prepare for the Deal

The first thing you need to start with is to get an Italian fiscal code (codice fiscale) to conduct many kinds of transactions involving local authorities such as getting medical insurance, getting hired, conducting business, signing contracts, etc.

Potential buyers usually open an account in an Italian back for subsequent payments. They transfer the necessary amount of money from an already existing account in their country. In the future, it can be used for utility payments.

Another option is to pay straight from international accounts, but there is always a risk of delay. Money must be in the seller’s account before signing the sale contract.

Step 2. Reserve the Property

Bargaining is a traditional element of the Italian real estate market. But all negotiations are conducted in writing. You can consider it as a local feature.

The buyer transfers the deposit for the property when the seller accepts the buyer’s offer. Usually, it is 5-10% of the total cost.

If one of the parties decides to sabotage the deal, they have to face serious financial consequences.

Step 3. Conclude a Contract

It is common to start with a preliminary agreement, but not necessarily. Generally, such an agreement is needed if the deal takes a long time. The final contract can be signed, if the buyer is ready to pay the whole sum at once.

The preliminary agreement must be notarized and contain the following information:

▪ personal data of a buyer and a seller;

▪ the price of a property, the payment procedure, and the number of deposits made;

▪ description of a property, inventory data.

The notary begins to check the property documents provided by the seller after signing the agreement.

The seller does not have a right to backtrack the deal after signing the preliminary agreement. The transaction is considered completely irreversible. At this stage, the buyer pays the real estate agent.

The main sale contract (Contratto notarile di compravendita) is signed by the seller and the buyer and has to be notarized. But a notary has to read the contract out loud and exclude variability in the understanding of its points.

It is very important to remember that the buyer also has to pay for the notary’s service and necessary taxes beforehand. Only after covering these expenses, the contract can be signed. The property must be paid for at the same stage of the deal and confirmed with checks or pre-payment bank transfers.

Step 4. Final Settlement

Payment in Italy is made by bank checks. The buyer must give the bank check to the seller on the same day when the contract is signed.

Another common type of transaction is a payment straight to the seller’s account or a notary's trust account (which is even safer). The notary passes the money when every term of the sale contract is met.

The transaction must be paid in euros.

It is forbidden to pay for real estate in cash.

Step 5. Register the Property

The transaction is officially registered after signing the main sale contract. The notary transmits all information to the relevant state authorities.

Registration of ownership takes up to 3 months, depending on the cadastral office’s municipality. But the transfer of title is given with keys at the moment of signing the main contract.

The notary issues a certificate of the transaction immediately after signing the contract.

The Pitfalls of Buying Property in Italy

When buying a real estate object as an individual, the law in Italy allows tax benefits:

▪ 2% (instead of 9%) of the cadastral value when buying on the secondary market;

▪ VAT in the amount of 4% (instead of 10%) of the commercial value of the object stated in the contract when buying a new building.

There are only three conditions for using tax benefits in Italy:

▪ the property should not belong to the luxury category;

▪ the buyer hasn't used the tax benefits in Italy before;

▪ the buyer must register the place of residence at the property address within 18 months from the conclusion of the purchase and sale agreement.

If you are not a citizen of a country belonging to the EU, then the first step to registering your place of residence is to obtain a residence permit in Italy.

The use of tax benefits, but failure to comply with the requirements of the law in the future entails an obligation to pay the difference in tax rates with a 30% fine.

Another striking feature of the Italian market was not formed in 2020 but has been known for several years – One-Euro Houses. At first glance, they are very attractive: you can buy a whole house for the price of a cup of coffee. However, there is always a catch: dilapidated houses are offered in almost abandoned villages on the outskirts of the country, far from tourist routes, and the buyer is obliged to restore the object in a limited time. It is unrealistic to get investment income from such real estate, and not always pleasant to live by yourself. Even the pandemic with its trend of secluded housing does not change the situation everywhere: good transport accessibility and fast Internet are needed in such places.