Italy - The Buying Process

Buying Overview

Buying a property in Italy is straightforward.

An Initial deposit of €3000 is needed to take the property off the market from here your preliminary contracts can be drawn up.

In order to prepare the preliminary contract for the purchase, clients are asked to provide the following information at their earliest convenience, together with a photocopy of their passport. Should the purchase be made in more than one name, the client has to provide these details for each party concerned.

• Full Name
• Full Address
• Contact telephone numbers
• Email addresses
• Date of Birth
• Passport number
• Passport issue date
• Passport issuing authority

Legalities

In the preliminary contract, the stage payments are noted, and the client required to pay the amount on the dates specified. The standard payment conditions are 3000€ reservation followed by 50% initial investment 4-6 weeks later.

Upon completion of the purchase, the client is required to sign the Notary Act. This is the title deed for the property.

We also have an aftersales care team dedicated to keeping clients informed of any updates on the purchase, when a stage payment is due and when the property will be finished. We pride ourselves on making the process as simple and stress free as possible.

In addition, we work with many currency brokers who offer more favourable exchange rates than most high street operators. An example of a reputable company is www.globalcurrency.com

An organisation such as this would enable you to pre-order currency at a favourable rate, if it was expected that a change in price would adversely effect a clients purchase in the future.

With respect to the legal elements of a purchase, we recommend that a legal practitioner specialising in Italian law is engaged in order to ensure a clients best interests are served. We can, of course provide details of reputable local or international lawyers if required.

The fee for the lawyer will be in the region of 1-2% of the property value, and there is usually apayment schedule of 50% at contract (i.e. €300/ £208approx) and the other 50% when ownership is taken

Costs

Taxes for each property depend on its price. As a guideline however, the combined state and local taxes will usually equate to around 2.5% of the purchase price. Based on a property price of €100,000, the following approximate costs will apply:

Legal fees €2000 (depends on whether local or Irish / UK based solicitor is used.)

Country Tax (Stamp Duty) €10000 (10% for a foreign buyer or resident purchasing a second home, this is reduced to 4% if you are an Italian resident)

Notary Fees and translation fees €2000 – (approx 2% on signing of title deed)

Taxation

We recommend that you seek specialist advice from a qualified taxation practitioner before making any decisions with regard to an overseas property. However, there is a basic overview here for information.

• The UK & Ireland have a double taxation treaty with Italy, preventing an individual resident in the UK or Ireland who owns property in Italy paying tax in both locations
• Income of an individual is subject to a progressive tax. Currently a rate of 23% - 43%, depending on income.
• The standard rate corporation tax is 33%, although there are some exemptions based on company structure and industry.
• A foreign resident who is employed in Italy pays tax only on his income in Italy.
• To be considered as a Italian resident, an individual generally must reside in the country for at least 183 days in any calendar year.

Capital Gains Tax

In Italy, Capital gains on property are taxed as income, but there are exemptions: