The process of selling a house in Italy can be tricky. It’s not as tricky as getting a house, but you still need to pay close attention to some law details.
With this in mind, it is best to have someone on your side who is fluent in both Italian and English and who knows a lot about the Italian real estate market and law. You should also know that Italian law allows people to be responsible before they even sign a contract. If one of the parties is upset about how the other party behaved, the first party can ask for repayment for any costs they spent.
What we’ve seen is that a lot of our customers call our company after they’ve already signed the rental agreement (Prenotazione or Proposta d’Acquisto) and given a small deposit to the agent to show that they are serious about buying the house. This method often doesn’t work because the seller doesn’t know the Italian language or market. So, it would be a lot harder to change or modify the general terms and conditions of the sale.
But a foreign seller should be told that because of the legal, technical, and practical problems that come up when selling a house in Italy, they should get help from Italian lawyers as soon as possible, maybe even before they sign any papers.
Italian real estate agent
Because of Italian law, both the buyer and the seller usually pay the real estate agent a fee, which is usually around 3% to 5% of the price of the house. But there are times when it is possible to work out other payment plans so that the agent only gets paid by either the buyer or the seller.
Get ready to sell?
Before you start the processes needed to finish the sale of your home in Italy, you need to do the following:
Hire a geometra:
They are both a surveyor and a builder in one. They will do a study to give you an idea of how much the property is worth. If you do the same thing, you’ll have a good idea of what the best price is for the sale on the current real estate market. They also make sure the building meets all the rules and prepares the Energy Performance Certificate. You can teach one yourself, or you can use one of our in-house planners.
Writing a Special Power of Attorney:
If you can’t make it to the finish, you will need to write a special power of attorney that lets your chosen lawyer speak for you in front of the notary. A special Power of Attorney is a written document in which one person (the principal) gives limited powers to another person to act on his or her behalf in certain situations, such as selling or buying a house, managing a bank account, or carrying out a limited partnership agreement. A power of attorney can end on a date written in the paper or when it is cancelled in writing. Usually, the person signing admits in front of a notary public that he or she executed the power. This way, if needed, it can be recorded, like in a real estate deal.
Given an Energy Performance Certificate (APE):
The seller must legally give the potential buyer a copy of the relevant Italian Energy Performance Certificate (Attestato di Prestazione Energetica, or APE for short) before the finish date.
How to read the Letter of Interest during the sale negotiations
A letter of interest is an informal agreement between two parties that sets out the terms of the negotiations for the sale of a property. It is not legally binding and is exchanged between the parties. The goal is to avoid data and content gaps and negotiations that are too close together, which would cause confusion and waste time for everyone. Because of this, it needs to be full and exact, laying out the terms and details that will be in the next preliminary contract and making them legally binding.
It’s possible for the letter of intent to be one-way or two-way. A solo agreement is one that is given by just one party, like a possible buyer, without any direct talks with the seller-owner. A bilateral agreement is one that is agreed upon and signed by both the buyer and the seller.
It doesn’t matter if it’s one-way or two-way; it may become binding whether both sides want it to or not. Because of this, it is important to carefully check, ideally with the help of a lawyer, to see if the buyer’s letter of interest includes certain terms that make it clear whether it is legally binding or not.
Do your research on the buyer when you’re selling your home
The whole process of negotiating and closing on a house sale is based on trust and loyalty. Fairness and good faith are two of the most important things in a deal between two people. Unfortunately, fairness and good faith can break down during the discussion or closing process. For this reason, it is important to know your counterparty, and it is necessary to complete a preliminary due diligence carrying out some preliminary searches on the buyer’s solvency and dependability (either natural or legal person) before signing any letter of interest or preliminary contract. These searches (like job, pay stub, assets, stability, bills or credits, etc.) help the seller get to the finish line without any unpleasant or dangerous surprises or misunderstandings.
Make sure you get the sale: the preliminary contract
There is no public record of the preliminary sale deal between the “prospective” buyer and the “prospective” seller. This legally binding contract means that both parties agree to pass ownership and finish the purchase, with the remaining balance of the price to be paid on a certain date in the future. Because of this, the Contratto Preliminare or Compromesso is only a preliminary agreement; at the end of the purchase, a formal agreement or deed will need to be signed.
The basic contract is a complicated legal document that should always be looked over by experienced Italian lawyers before it is signed. This is the only way to avoid the many problems that come up in the real estate market.
The following will be in the preliminary agreement:
- Full names, places and dates of birth, visa numbers, nationalities, and tax ID numbers must be given to prove who is who. People who run businesses that are selling things need to give their VAT number and formal registration number.
- A note about where the land is located (commune and state)
In order to identify someone in the National Land Registry (NCT) or urban areas (NCEU), you need to report the cadastral information of a recent title check. If the sale of the property is about:
- a piece of property: sellers must pay for and get the new piece identity, which is called frazionamento, in the National Land Register. This must be done before the final signing in front of the notary;
- If you want to buy land or a part of a building, you need to include a map from the National Land Registry and have both sides sign it.
About the deposit
The size of the deposit can be agreed upon by both sides. Following the exchange of the compromesso, a deposit of 10% to 20% of the sale price is usually due. This depends on what was agreed upon. The price of the property is fixed once both sides sign it.
In Italy, deposits are split between Caparra Confirmatoria and Caparra Penitenziale.
Under Italian law, the type of investment a buyer makes when making an offer on a house can have a big effect on their rights and responsibilities, which can be very bad for buyers from outside of Italy. You can tell the difference between two types of deposits: Caparra Confirmatoria and Caparra Penitenziale.
The Confirmatory Caparra
If the deposit given is called Caparra Confirmatoria, it means that the buyer will lose the whole deposit if the sale of the Italian property done not according to the terms agreed upon. On the other hand, if the seller is at fault, he will have to legally pay the buyer twice as much as what was agreed upon as a deposit. Also, more money may have to be paid if it turns out that the losses are greater than the payment.
Caparra Confirmatoria
If the deposit is considered Caparra Penitenziale, then, depending on how the contract is written, either or both parties can back out of the deal. If the buyer backs out, the seller can keep the deposit, but if the seller wants to end the deal, they have to give the deposit back.
Make sure the title doesn’t have any restrictions that make it harder to get the full title of the property. These restrictions could be caused by court or bank obligations, inheritance or property rights, the right to have first choice of purchase, or anything else. The seller must promise to get rid of these restrictions before or at the same time as the final sales act;
List all the servitudes that pass through the property to be bought, such as roads, trails, pipelines, and so on. Also list the servitudes that the property should benefit from, such as rights of passage, access to water from nearby natural sources or wells, and the ability to use pipelines.
Building permits
Building licenses that are still being issued: if you want to buy a building that needs to be built, you must agree to buy it and pay for it in full only after the necessary license is given.
The sale price lists the deposit paid at signing, the payments that will be made over time, and the balance that is due when the deal is finished. It is important to note that the anticipo, or first payment, is actually the down payment (caparra confirmatoria). Should the owners change their minds and no longer want to sell, they will have to pay back the buyer twice the amount of the down payment.
The Completion date
If you register the Compromesso with the Inland Revenue Office, it means you have to follow through with your plans to buy. Once both parties have signed the Compromesso, they are both bound to transfer the property. This agreement is almost never broken, and the final record of sale is always signed (Rogito).
There may be other restrictive terms in the paperwork that the foreign buyer has to sign, such as limitations of responsibility, the seller’s lack of legal obligations, and so on. People generally ask for two signatures on the same paper to show that these one-sided clauses are present. This is required by Italian law for terms that are unfair, unbalanced, or odd. It should be a warning to the foreign buyer not to sign the paper without first talking to a lawyer.
If the customer decides not to go through with the purchase, the compromesso will be lost, or you can go to court to make sure the purchase goes through. If you back out, though, you’ll have to pay back twice as much as the fee and then some.
The payment while an Italian home is being sold
If the property for sale in Italy has a mortgage on it (called a “mutuo ipotecario”) or if the purchase will be financed with a mortgage, you will need to agree with the seller that the mortgage will be paid off and the entry in the Land Registry will be deleted before the purchase is finalised. Because of this, you need the help of an Italian real estate lawyer or agent in Italy, as the process could be pricey and take a long time.
You can also agree with the seller and the bank that the buyer will “take over” the mortgage. This is called Accollo del Mutuo in Italy, and it is very important to check the terms of the original mortgage agreement and the status of any past payments.
Finalising your sale in Italy
After everything has been set up for the sale and both parties agree on the draft of the preliminary contract, both the seller and the buyer should sign two identical original preliminary contracts in front of a notary.
According to Italian law, the buyer usually picks the notary. However, because they are impartial, the notary works for both sides and their best interests. There is no one that the notary works for besides the buyer and the seller.
For people who don’t speak Italian, the most difficult part of the buying process is signing the papers of sale, or rogito, in front of a notary. This is followed by talks and making the basic contract. Because of this, you will need the help of a lawyer throughout the process.
The notary will read the two original contracts to make sure that everything that was said before is still true and that there are no mistakes about the legal terms. After that, both sides sign the papers and hand them over to each other. At this time, the customer will pay the seller the rest of the price.
You will be given an assegno or assegno circolare, which is a cheque or a banker’s draft, for the deposit. This completes the formalities of this part of the deal. There is also the option of making the payment through a bank transfer.
As we already said, if the seller can’t make it to the final closing, you will also need to write a special Power of Attorney that lets the lawyer speak for you in front of the clerk.
Plus, to keep from getting fined, the original Italian Energy Performance Certificate, or APE (Attestato di Prestazione Energetica), needs to be included with the final document that both parties sign.
Taxes, and other costs that come with selling a home in Italy
Different extra costs can come up when selling a home in Italy. Foreign sellers should keep these costs in mind when planning their budget for the sale. These fees can add up and have a big effect on your total profit. When you figure out how much it will cost to sell your Italian home, you should include the following fees, taxes, and costs attached to the sale:
Service fees
As we already said, agency fees, which range from 2% to 3%, are generally split evenly between the buyer and the sale. Before you start looking at homes, you should always make sure you know how much the agent charges. Notary fees are based on the sale price; a lower sale price means a bigger fee. That number probably won’t go above 2.5% to 3%.
When you sell a house in Italy, there are two main taxes you need to think about. Existing homes are subject to registration tax, while new homes are subject to value-added tax (VAT). In other words, you will never have to pay VAT and registration tax on the same property. Note that people who don’t live in the country usually pay more in taxes than people who do.
Registration Tax on Buying a Home in Italy
This tax only affects the sale of homes that are already owned. The rate changes based on the type of property and where the customer lives:
Italy has taxes on land records
You also have to pay land registration tax, which is a set amount of about 130 Euros for a main home or 1% of the buying price for people who don’t live in Spain.
Other costs you may have when selling your home
There may be other costs to think about when selling a home in Italy besides the usual business costs:
Fees for professionals
Surveyor Fees: A surveyor can give you an estimate of how much the property is worth and point out any problems that might be present.
Costs of an Architect: You may need an architect to make plans or deal with building licenses.
Solicitor Fees: A lawyer is always a good idea, but sometimes you only need a solicitor for certain jobs, like getting a property check.
Service and Connections:
Connection Fees: Some services, like water, power, and gas, charge fees to stop them.
Exchange Rate Fluctuations: Consider possible currency conversion fees when getting payment in a different currency.
Currency Exchange Services: These fees can be kept to a minimum by using a reliable currency exchange service.
Packing and Shipping: Figure out how much it will cost to pack and ship your things, especially if you are moving across foreign borders.
