Guide to Buying Property in Italy
The Italian Property Market
An increasing number of foreign nationals have taken
to purchasing property in Italy over the course
of the past fifteen years. The increase in real estate
purchases in Italy by foreign nationals really took
off following the integration of Europe into the EU.
With the advent of the European Union, more and more
foreign nationals began purchasing different types
of real estate within Italy. This included commercial,
residential and speculative investment purchases by
foreign nationals.
The vast majority of foreign nationals who have taken
to purchasing and owning real estate in Italy are
from within one or another of the European Union nations.
With that said, British investors have been particularly
active in buying and investing in real estate in Italy
during the past five to ten years.
The prime real estate purchases in Italy by foreign
nationals in recent years have been concentrated fairly
heavily in rural regions of the country.
Investment Property in Italy
As with the other nations that are members of the European
Union, Italy has seen a growth in the number of foreign
nationals making real estate purchases within Italy
since the inception of the EU. The common marketplace that
was formed with the development of the EU is deemed to be
the primary reason as to why there is so much activity in
the arena of real estate buying and selling in EU nations
such as Italy.
A significant amount of the movement in regard to real estate
in Italy involves the buying and selling of property for
investment purposes. A significant amount of activity when
it comes to investment real estate has involved two primary
types of property: commercial or industrial property as
well multi-family properties that are used for residential
and vacation purposes.
There are no real restrictions on foreign nationals purchasing
real estate in Italy beyond a bit higher purchase registration
tax that will be discussed later. This holds true for investment
real estate as well as other types of real property in Italy.
Residential Real Estate in Italy - Single Family Properties
The biggest rush of selling when it comes to residential
property has occurred outside some of the major cities like
Rome. Many foreign nationals have involved themselves in
this particular buying spree. Indeed, particularly people
from the EU have actively made the purchase of homes and
villas in rural areas of Italy to be used as second homes.
These people maintain that they are attracted to the easy
going and relaxing lifestyle of life in rural Italy. (There
have been some motion pictures in recent years set in such
environments that many real estate experts in Italy maintain
have further spurred the sales of rural residences in the
Italian countryside.)
Residential
Real Estate in Italy - Apartments
When it comes to finding private residences in the larger
cities in Italy, apartments remain one of the most popular
types of residential property bought and sold in the 21st
century. Take for example the city of Rome. Apartments remain
one of the most often conveyed forms of real property within
the Italian capital city. (Of course, the limited amount of
living space and the ever growing population of Rome have
combined to make apartments invaluable residential assets
in that city.)
Many foreign nationals have invested in apartments in the
more major Roman cities over the course of the past decade
for two primary reasons. First, these apartments are allowing
these foreign nationals a second and oftentimes more affordable
residence in one or another of the Roman major cities for
their own purposes. Second, many people from other nations
are making the purchase of these apartments in the larger
cities in Italy to then be let or rented to other individuals.
Apartments currently for sale in Italy include areas like Sardinia, Venice, Sicily, Milan and Florence are all proving popular to foreign buyers.
Generally speaking, these investors who are purchasing apartments
in Italy are renting to people who will be in Italy for an
extended period of time on business. In the alternative, they
are renting these apartments to individuals and families who
have elected to spend an extended period of time in Italy,
in one of the major Italian locations, on holiday.
Holiday Property in Italy
Vacation real estate remains a proverbial hot property in
Italy at the present time. The demand for real estate in the
major resort communities in Italy have sent the costs of real
estate in those communities through the roof. With that said,
many of the more healed foreign nationals continue to attempt
to make the purchase of nicely situated real estate in the
resort communities in Italy.
One of the other areas in which vacation real estate is selling
at a brisk pace is in some of the more rural spots in Italy.
As mentioned previously, many foreign nationals are taking
to purchasing real estate and graceful homes in rural parts
of Italy to be used for their second homes. Likewise, many
foreign nationals are purchasing real estate in more remote
and rural areas of Italy for use on family or other types
of vacations and holidays.
In addition to using these properties for their own personal
holiday or vacation purposes, many of these same foreign nationals
are leasing these properties to other foreign nationals during
those times of the year in which these owners are not occupying
the properties themselves. As a consequence, many of these
foreign nationals have been able to make their vacation properties
pay for themselves. Indeed, there are some foreign nationals
who have gone so far as to purchase more than one residential
property in different locations in Italy. These individuals
will use one or another of these residences at different times
during the year and let them out to others the remainder of
the time. These individuals have found this type of investment
to be profitable.
Specific steps to buying real estate property in Italy
The real estate sales and purchasing process in Italy is fairly
streamlined and not particularly complex. For the most part,
a foreign national stands in the same shoes as does an Italian
citizen, with one exception. When it comes to the purchase
of real property in Italy, a foreign national must pay a 11%
purchase registration tax after the sale itself is consummated.
An Italian citizen must only pay a 4% purchase registration
tax.
In Italy, the first step towards the purchase of real estate
is the initial agreement between the parties. Once the initial
agreement is signed and executed, there are some primary tasks
that must be completed by the parties. For example, the buyer
must obtain appropriate and sufficient financing. The seller
must work to make certain that title to the property is free
and clear of any and all encumbrances so that it can be conveyed
to the buyer.
When this initial agreement is signed, the seller will post
a deposit in the amount of at least 10% of the total purchase
price of the real estate being sold. It is not uncommon in
Italy for deposits to run as high as 50% of the overall purchase
price of the property. Deposits in Italy tend to be higher
than what is seen in many other countries around the world.
Generally speaking, the deposit is not refundable if the buyer
simply decides that he or she does not want to buy the property.
Indeed, the only real circumstances in which a buyer can obtain
a refund of the deposit -- even a hefty deposit of upwards
to 50% of the purchase price -- is when the buyer backs out
of the deal or in circumstances when clear title to the real
estate cannot be obtained within the time set forth in the
initial agreement between the parties.
The real estate purchase process is overseen by a notary in
Italy. The notary actually has more duties than is normally
associated with a notary involved in real estate transactions
in other countries the world over. For example, the notary
in Italy is responsible for carrying out title searches to
work to make certain that the title to the property is free
and clear of any obvious defects or liens.
Many real estate experts in Italy recommend that a purchaser
take the time to hire what is known as a geometra. The geometra
will survey the physical boundaries of the property for sale in Italy to make sure that it actually does comport with what is listed
on the legal description that is subject to a contract for
sale. (These experts maintain that this particularly is important
when it comes to older properties in Italy.)
The real estate purchasing process can take upwards to six
months to complete in Italy. For this reason, unlike in many
other countries around the world, it is a commonplace occurrence
for a purchaser to move into residential property after the
initial agreement is signed. In most countries around the
world, the purchaser does not take possession of the property
until the final agreement is executed and the deed to the
property is transferred from the seller to the buyer
Property Abroad always recommends using a Solicitor
or Lawyer
Mortgages Options
Barclays Bank have published a free guide to buying in Italy, the brochure is packed with useful information to help with the whole buying process as well as a range of mortgage products on offer as well as local banking facilities to help you settle once you've completed your purchase. Click below to register with Barclays to receive your free brochure.
When considering the options for a mortgage on your overseas
property there are a couple of choices to consider;
- Do you consider raising finance on your existing property
in the UK to cover the whole cost of your purchase abroad?
A good idea if the interest rate in the country in question
is a lot higher than it is here in the UK as you will
pay a lot less in monthly repayments.
- Do you secure a mortgage against the property from a
local bank in the country of purchase? This can be a wise
option especially if the interest rate is lower than our
current UK interest rate. Most overseas mortgage / bank
lenders will require upto 30% deposit on mortgages. However,
you will need to give some thought to how you will service
your mortgage payments each month especially if you are
not living or earning in that country as you may well
lose out on exchanging money each time to cover monthly
expenses. Check out our Foreign
Currency page to see how you can save money in this
example
- Some Builders and developers may well offer their own
mortgage facilities on their properties for sale. This
can be beneficial to both parties depending on the logistics
of the mortgage or loan facility. Always check and compare
with the two options above before making your final descision.
For more details on Mortgages
in Italy visit our Mortgage page in the Italian section.
Further information on Italy