While in many European countries there is a trend of slowing growth in property prices, in Italy, for the first time in a long time, the value of housing began to increase after a prolonged period of price decline – and this happened precisely during the coronavirus pandemic. Therefore, now more and more foreign buyers are turning their attention to real estate in this country, especially since the centuries-old Italian cities with their famous universities, seaside, lake and ski resorts will always remain relevant in the European housing market and in the long term.
Pros and cons of buying real estate for a foreigner
Italy is a country where there are no restrictions on the purchase of real estate for foreigners, including Russians. This became possible thanks to the “law on equality”, which states that both an Italian citizen and a foreigner from any country in the world have equal legal rights and opportunities. A property purchase transaction can be executed both for an individual and a legal entity. In order for the whole process to proceed as comfortably as possible, and the buyer can be calm about the safety of the invested funds, and if he does not speak Italian and is completely unfamiliar with the legal aspects of the issue, it is recommended to use the services of real estate agencies licensed to carry out their activities.
But before you start signing the proposal, you need to obtain the tax code of the payer (codice fiscal), which can be issued at the local tax authorities or at the Italian Embassy in Moscow. It is not possible to open an account in Italian banks without obtaining a tax code, since money transfers between the seller and the buyer are made from accounts in Italian banks. If the buyer refuses to purchase a home, then he loses the deposit. If the transaction was not concluded through the fault of the seller, then the deposit is returned to the buyer in double amount.
A preliminary contract (compromesso), which is certified by a notary, is signed by both parties some time after the purchase proposal has been drawn up. It specifies the conditions for signing the main contract (rogito), detailed information about the seller and the buyer, a more detailed description of the object and its location, as well as information on the cost and timing of payment for real estate, the date of completion of the transaction, guarantees from the seller that it is valid is the owner of the property. At this stage, you will need to pay an advance payment, which, as a rule, is up to 20% of the purchase price. Depending on the amount of the amount paid when signing the offer and the agreements between both parties, the amount of the advance may vary.
From the date of signing the preliminary contract (compromesso) to the final stage of the transaction, the signing of the main contract (rogito) and the transfer of ownership to the new owner, it usually takes 1-3 months. During this time, the notary prepares documents and conducts the necessary appraisal of the property. The rogito is signed, usually at the notary’s office, in the presence of the seller, buyer, real estate agent and mortgage operator in the case of bank financing. In the case of taking out a mortgage loan, all credit conditions are prescribed in the agreement. The ownership is transferred to the new owner after the signing of the sales contract.
It is not necessary to pay the remaining purchase amount and all necessary fees and taxes before signing the contract. It is a widespread practice when all the money is in the buyer’s personal account with an Italian bank, and when signing the contract with a notary, the buyer signs bank checks to pay for the property value, notary services, taxes and translation services. If the object was encumbered with a mortgage loan, the seller signs a check in favor of the bank to withdraw the mortgage.
Mortgage lending in Italy is available to Russian buyers, but in order to obtain it, you need to prove your high solvency, since when lending to foreigners, banks impose increased requirements on the assessment of mortgaged housing. So, it is easier for a foreigner to get a mortgage for the purchase of expensive liquid real estate. In Italy, the mortgage loan amount does not exceed 60% of the appraised value of the property. Mortgage rates are now 3-3.5%, the possible loan term is from 5 to 20 years.
The rogito contract can be signed personally by the buyer or by an authorized representative. If the seller cannot be present at the signing of the rogito, then it is necessary to issue a power of attorney in the presence of a lawyer, then take it to the Ministry of Foreign Affairs in your country, approve it with an apostille and return it to Italy. After signing the contract, the real estate object is registered at the real estate registration office.
Real estate acquisition costs in Italy
The cost of real estate agency services is about 3-5% of the purchase amount, notary services cost up to 3% of the contract amount. Notary fees and appraiser’s fees are payable upon signing the final contract. Typically, notaries work in conjunction with appraisers and therefore charge directly for these services.
Thank you for your help in preparing the material:
Irina Vyaznikova, expert at Dolce Calabria
Elena Dvurechenskaya, owner of ITALCASA