The idea of moving to Italy has captured the imagination of many, thanks to its glamorous Hollywood depictions and the allure of incredible food and wine.
Whether you’re thinking of buying property in Rome, Milan, Naples or anywhere in between, you’re likely to be greeted with a plethora of housing styles, ages and levels of upkeep.
In Italy, nearly 70% of people own the homes in which they live, a statistic that's maintained by a culture of passing property down and giving it away to family. Perhaps even more saliently, astronomical rent prices make buying more attractive, as the investment is quickly paid off and the potential to use it as an income property is high.
So, what do you need to know before you get started? This guide will walk you through the most important tips and steps for buying property in Italy.
Overall, Italy’s housing market rides right on par with the rest of Europe. Thanks to the introduction of the IMU tax in 2012, it’s currently viewed as a buyer’s market.
Technically, there are some restrictions on who can and can’t buy property in Italy, however, it’s largely seen as a “no restrictions” country.
That’s because, outside of EU nationals, you must have a valid residence permit if you want to buy in Italy. Unless, of course, you live in a country with reciprocity. For example, any US citizen may buy property in Italy, because any Italian may buy property in the US.
You do want to ensure that, if you’re sending money from your home country to make the purchase, it’s officially documented. This is to ensure that whatever proceeds come from a future resale can then be repatriated.
The price of property in Italy varies greatly based on exact location and property type. The following table can give you an idea of cost across various regions.
|Tuscany||2 BR 1 Bath Apartment||€180,000|
|Tuscany||2 BR 2 Bath House||€300,000|
|Calabria||2 BR 1 Bath Apartment||€75,000|
|Sardinia||2 BR 2 Bath Apartment||€340,000|
|Sicily||2 BR 2 Bath House||€100,000|
|Emilia-Romagna||2 BR 2 Bath House||€350,000|
For the most part, it’s advised to use an agent when looking for property in Italy. Most buyers contract an agent or lawyer in their home county, who then works with the Italian real estate agent. It’s not uncommon for real estate agents to work in dual languages, and depending on where you live you may find a local agent who speaks Italian.
While new scams are tried every day, there are a couple of ways you can help protect yourself in the buying process.
- Never buy a property unseen. Thanks to the plethora of historic properties available in Italy, there are many that have been neglected for years and are just popping up on the market. While these properties may look ok online, they’re often riddled with problems, and sometimes don’t even have working electric or plumbing. It’s important to do a thorough evaluation and walkthrough in person.
- Always check that the seller has the right to sell the property. One of the more common scams is “fake” owners selling property they don’t have any right to, and disappearing when you find yourself in legal trouble or unable to occupy the home. In order to avoid this, check the titles and registration on the property against the person who is selling it, and never fork over money until you have a legal title in hand.
- Don’t work with a seller who won’t meet in person. If the homeowner refuses to meet in person and asks for everything to be done by mail, they’re often just a scammer who is waiting for you to send cash before they disappear. Meet the seller in person, and exchange all titles, keys and money only after you’ve seen proof that they are the real owner, have the real property rights and are selling a real, unoccupied property.
While it can be difficult to read up on every scam that’s out there, a good rule of thumb is to go with your gut. If something seems fishy, it’s ok to pump the brakes.
If you do decide to skip the realtor or if you want to start by doing some window shopping, these websites are all good places to check out property in Italy:
Italy offers a range of property types depending on the region. If you’re moving to the country, there are plenty of detached houses and villas available. In Rome or Milan, you’ll be lucky to get your hands on a small apartment.
While your decision should ultimately be based on your needs, what type of property you want to live in should be based on where you want to live.
Technically there are no requirements for property sale, as many houses are considered to be restoration projects. It’s a good idea to hire your own surveyor to check the property out before you buy, especially if you’re looking for a home that’s move-in ready.
Because Italian homes are old, you may want to keep a special eye out for the condition of plumbing and electric, and the presence of asbestos and lead. While all of these things can be easily hidden, they’re a bear to fix or get rid of once they become obvious.
While the steps to buying a home are similar anywhere, use this list as a guide to get started in your Italian property purchase:
- Look into a mortgage. While most Italian banks will lend to foreigners, it’s smart to get an idea of just how much they’re willing to lend before you get started
- Engage a realtor. Whether you’re working with a realtor in your home country or in Italy, using an agent is truly the best way to get a good deal and see properties that are well-suited to your needs.
- Choose a property and make an offer
- Get a sale contract. This will need to be drafted, looked over and stamped by an Italian notary.
- Sign the contract
- Pay taxes
For the most part, the legal requirements for a property in Italy are pretty straight forward. You’re not required to retain a translator, but you should if you aren’t fluent in Italian. You’ll also need to engage a notary, who will handle your contracts.
Up-front fees on the house may include a deposit, but Italian law works to protect the buyer. That is, if you pay a $5000 deposit on a property and the seller decides to withdraw from the contract, they’re required to reimburse your deposit and pay a fee that’s equal in sum to the deposit. In this scenario, that works out to $10,000 returned to you.
Most Italian banks will give mortgages to non-residents, assuming they meet the general requirements. The process is as follows:
- The bank will review your personal finances and information about the property
- You will make an informal mortgage application
- A surveyor will be appointed to inspect the property and report any issues
- The notary that you hire issues a title check report to the bank, proving the seller has the rights to the property and that it has been successfully transferred to you
- Assuming all of your finances and the home have checked out thus far, the bank will issue you formal mortgage approval
- You’ll agree on a signing date, and the funds will be released
Beyond a mortgage, you’ll need to be prepared to make a down payment on the house. This payment is made directly to the seller, and is usually a sum of 5-10% of the total purchase. If you’re planning to pay your deposit from abroad, it’s a good idea to use TransferWise to get the real exchange rate and avoid international transfer fees. Alternatively, paying with a TransferWise Borderless Account can cut out the middleman altogether.
As you set your total budget, it’s a good idea to keep these taxes and fees in mind:
- Registration Tax: 3-7%
- VAT: 4-22%
- Land Registry Tax: 1%
- Notary Free: Up to 2.5%
- Legal Fees: Up to 2%, plus 22% VAT
- Exchange Rate: Variable, but should be calculated based on the mid-market rate.
Once you’ve considered your options, the price, and the best way to search, you’re ready to embark on an incredible new experience in food-loving, sunny Italy. Good luck with purchasing your property!
This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.
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