Buying in Italy
Tips for buying property in Puglia Italy
How the purchase process works
If you are thinking of buying a property in Puglia Italy, you would probably like to know how the italian property purchase process works. Here’s a brief guide.
First of all, it would be needed you to check the credentials of the professional dealing with the property you are interested in. Therefore, if buying through an agent ask for a proof, he/she wil have to be allowed by the law.
Basically, the Italian estate agents have to be registered at the Chamber of Commerce of the province where the business is located. The companies must have a “partita iva”, (the equivalent of the VAT number), and a R.E.A. number.
It’s common that you might get in touch with some people not registered at the Chamber of Commerce, simply because it’s required to have a long course and an exam at the end. These so called agents legally trade without licence, and they are not allowed by the law to charge you of anything. Moreover, if you decide to acquire a property through one of these, you need to be aware that you are not protected during the buying process: should something go wrong, you have zero guarantees. Of course, you are more than free to decide to avail yourself of the services of a professional agent or not, basically we just want to suggest you to do not risk your investment.
This said, once you have decided on a property, you should make a verbal offer on it. In case of agreement by the owner, here is the step-by-step procedure:
1) Check out all the documents on the property.
This is one of the most important document regarding a property, where you will find the seller details, the cadastral ones of the property (the cadastral parcels), the permission of building etc.
Permission of building.
The permission of building is a document needed in the purchase process, as on that it’s mentioned if the property has been built according to the Italian laws (Testo Unico dell’Edilizia, D.P.R. 380/01); If a house has, for example, a room that is not registered on the floorplan or a planning permit doesn’t exist, the property cannot be sold. On the contrary, if there is the possibility to submit a planning permit to the commune where the property is located in order to “legalize” the “unregistered party”, the owner must do it.
Once the owner get the planning permit, the property ownership will be transferred on the behalf of the buyer in front of the Notary. In some cases the planning permission is not required, we understand it might seem strange to you: until the 1st of September 1967 the planning permits were not required for building a house in the countryside, therefore if the house you are going to acquire is mentioned on the property title of the seller as “fabbricato rurale, rudere, trullo, masseria” etc. “built before the date above”, the planning permit is not needed, according to the Law 765/1967 also known “Legge Ponte”.
The cadastral searches include the visura catastale, a document issued by the Italian Revenue Office (Agenzia delle Entrate), on which you will find the details of the property identified on the map of the area, and the planimetria catastale (the floorplan registered at the Revenue Office). We collect all of these documents before the property is on the market, in order to have a clear idea of what we have in our portfolio.
Energy performance certificate (attestato di prestazione energetica – APE).
It’s required by the law to attach this certificate to the deed of sale, and to the rental contracts as well. Basically, it contains information about a property’s energy use and typical energy costs and recommendations about how to reduce energy use and save money.
Legal inspections (people checks and debs checks).
They are carried out by the Notary, who is a public official responsible for the stipulation and the registration of the Final Public Act.
Usually, we check out all the paperworks before the preliminary contract is signed in order to protect the buyer. Of course, you are more than free to avail yourself of the services of a lawyer for your own peace of mind.
Basically, a property should have: the title, a cadastral plan registered at the Registry Office, the Energy Performance Certificate and the permission of building. As above mentioned, in some cases, a planning permit doesn’t exist if the house was built before the 1st of September 1967. Since that date on, the law also termed in Italy “Legge Ponte”, requires the planning permit to build in the countryside. In these specific cases the permission of building is not required.
2) Getting a fiscal code (codice fiscale).
The codice fiscale in Italy is similar to the National Insurance Number (UK) and the Social Security Number card (USA). Basically it serves to identify unambiguously individuals residing (and not residing) in Italy and enables to open a bank account, getting the connection to utilities etc. It is issued by the Revenue Office (Agenzia delle Entrate).
3) Opening bank account.
An Italian bank account is useful when buying a real estate, as you will probably be charged for electricity, etc. Actually, it’s not required by the law, as you have the chance to transfer the balance onto the notary bank account, and after the stipulation of the deed of sale he/she will transfer the funds onto the seller’s bank account, according to the Law 147/2013, art. 1, co. 63.
4) Irrevocable purchase proposal (Proposta irrevocabile d’ acquisto).
The irrevocable purchase proposal is a document that is drawn up by the registered estate agents and represents the intent by buyer to block a property. Usually, it is signed by the buyer first, and includes all the details of the property, including cadastral details, the price offered, the amount of the deposit etc. Sometimes we skip this step and go directly to the preliminary contract. For example, if you have made a verbal offer on a property you are interested in, and the seller has accepted, we agree to go straight to the point, the preliminary contract in other words.
5) Preliminary contract of sale (Compromesso/Preliminare di vendita).
The preliminary contract, also known “compromesso” or “preliminare di vendita” in Italy, is a legally binding contract drawn up the estate agent, a lawyer or a notary public, that establishes the selling price which both parties have agreed to, the date within the sale will have be stipulated in front of the notary public and other agreements if any. It’s recognized and governed by the Italian Civil Code.
6) Final deed (Rogito/Atto pubblico di compravendita).
The final deed (or deed of sale) is the public document through which the property is transferred from the owner/s to the buyer/s and is stipulated by the notary (a public official representing the Italian government and standing as a neutral party) with all the guarantees that a notary offers.
The balance to the seller is paid at this stage, and the means of payment are mentioned on the deed. If you don’t speak Italian, it’s required by the law to have a copy of it translated into your language, and the presence of a translator at the signing of the deed, unless the notary speaks your language. Once the final deed is stipulated, the notary will provide to register it to the Registry Office (Conservatoria dei Registri Immobiliari) within one month from the stipulation of the deed of sale.
7) Agent fee.
As mentioned in the About us page, the estate agent in Italy according to The Italian Civil Code (art. 1754), doesn’t work for a party in particular, and its own activity materializes in getting in touch two or more parties for the conclusion of a deal.
Basically, both the seller and the buyer avail themselves of the service of the estate agent, who charge a fee (commission) which is usually 3% plus VAT of the agreed selling price. Please, note the commission is not spread by the parties (the seller and the buyer) but it’s paid by both in full.
Speaking of taxes in this brief guide, it all depends on if you wish to establish your residence in Italy. If this is the case, you will pay notary’s fee (it depends on the property price), Registry tax 2% of the cadastral value, a fixed cadastral tax (€ 50), a fixed mortgage tax (€ 50, nothing to do with mortgage). If not, you will pay notary’s fee (it depends on the property price), Registry tax 7% of the cadastral value, Cadastral tax 1% of the cadastral value, Mortgage tax 1% (nothing to do with mortgage). The taxes are calculated on the cadastral value of the property, which is lower than the property price. This means you will pay less taxes when stipulating the final deed of sale.