Cortona International does its very best to collate all relevant documentation pertaining to a property’s compliance before marketing it.
A property cannot be sold unless it is compliant – with all relevant documentation required by the presiding notary at the time of the Preliminary contract –however, and despite our arguments to the contrary, some owners are loath to go to the expense of regularising their properties until they have a firm offer of purchase.
In order to provide our buyers with the clearest possible picture, we now INSIST that those sellers without a certificate of compliance provide us with a report from a registered geometra (surveyor) detailing the property’s current status and which outlines any irregularities there may be, what needs to be done to obtain compliancy and the timelines for doing this.
A certificate of conformity, certified by a registered geometra will attest that the property complies to all building and planning regulations, has (where applicable*) compliant electric, plumbing, sewage and heating systems and is registered correctly at both the Land & Building registry and in the local town hall. With this in hand a purchase can be done swiftly in a matter of a month or little more.
In the absence of a certificate of compliance we will sit down with you and your geometra and explain what needs to be done in order for the property to be made compliant and within what timelines this can be achieved.
Most issues of compliancy can be easily resolved by the owner of the property applying for a ‘sanatoria’ at the local comune, but if the property in question happens, for example, to be in an environmentally protected area, obtaining the sanatoria can take some months.
We will ensure you are fully aware of all pros and cons before committing yourself to a purchase.
If you do decide to go forward, the first step would be to draw up - together with the presiding notary (of your choice) - a contract that is conditional to the relevant sanatoria being obtained and conditional to it being consigned to the notary within a specified date. Any deposit, usually very low in these instances and held in escrow by the notary until completion, would be made automatically reimbursable, together with specified costs, should these conditions not be met. As per Italian law, the vendor would also owe you a forfeit of the same again, but this is often difficult to enforce.
These conditional contracts are standard procedure in Italy, where historically speaking (up to about 10 years ago), planning and building regulations were often not adhered to because national building ‘amnesties’ would be declared at regular intervals. These amnesties are no longer available, but there are still homeowners who bought or inherited a property 15 or more years ago who find themselves with issues of non-compliance when they come to sell.
We strongly recommend you carry out a survey before committing to buying a property.
We can either recommend a geometra or are happy to work with one of your own choosing.
The law requires that all properties, unless otherwise stated in the contract, are sold fully functional. If , however, timelines between the preliminary and final contract are long, it could be a good idea to request a clause be inserted in the preliminary contract asking for an inspection of the property and its various utility systems, before going to final contract
The survey should include the following:
In the absence of a certificate of compliance you should ensure your geometra collates and assesses the following:
*Older houses will often not comply to today’s health and safety regulations with regard to electric, plumbing, sewage and heating systems. In these instances, a clause is inserted into both the preliminary and final contracts stating that the buyer is aware of the condition of all utility systems and exonerates the owner from any future responsibility. A buyer can request these systems be upgraded to current norms (certificato di abilitabilita’) but the vendor, is not obliged by law to concede to this request.
While some international lawyers may well be versed in Italian law, few international lawyers are versed in the buying of private properties deep in the countryside and far from the big cities where their law firms generally practice. Even fewer will be versed in local planning laws, regulations and restrictions which change from region to region and even from one local council to another.
If the property you are thinking of buying is, for example, a large estate with acres of land, multiple owners and numerous irregularities, the hiring of a lawyer (preferably a local one with a translator) would be advisable, but if it isn’t, far more depends on the astuteness of your geometra to assess what could pose a problem (such as structural problems, added volumes or disputed rights of ways) and the experience of the estate agent and Notary in dealing with them.
What one should know when buying a property in Italy is that all contracts can be stipulated in front of a Notary (who is specialized in house sales and technically speaking, higher up the legal ladder than a lawyer). All contracts can also be personalized (together with the notary) as long as the conditions are accepted by both parties. If one establishes at the outset that any deposits will be held by the same notary (in escrow) until the moment of the final contract, a safe outcome is guaranteed.
The process of purchasing a property in Italy can be summarized as follows
If you’ve fallen in love with a property and have decided to buy it, the first step would be to negotiate a price and ‘block’ the property – with no financial commitment - for 10 days while a survey, as above, is done.
If everything checks out one can then proceed to negotiate terms and conditions of sale.
The most important points to negotiate would be:
If the property does not conform in its entirety, but in the opinion of your geometra the irregularities are easily sorted, these can become a condition of sale i.e. it would be stipulated between the Preliminary and Final contract that these issues would be regularized.
In the event these conditions are not met by the time of the Final Contract, the vendor would be in breach of contract and legally bound to return your monies. (Technically, s/he is legally bound to pay a penalty fee of the same amount again. However, this can be hard to enforce.)
In the same vein, should you wish to withdraw from the sale for no valid reason, your deposit monies would automatically be forfeited to the vendor.
Formal Offer of Purchase (proposta irrevocabile di acquisto):
This is an optional stage and is oftenused as an effective way of ‘blocking’ a property for a period of 20 days especially when neither vendor or purchaser live in Italy.
It is a written contract which establishes the terms and conditions to which both parties have agreed and which tie you to the purchase of the property.
Don’t sign this in haste because should you withdraw from the sale for any other reason than those specifically cited in the contract, your deposit monies, usually 5% to 10% of the purchase price, will be forfeited and paid to the vendor in their entirety, as per Italian law.
Therefore, the signing of a Formal Offer of Purchase is a serious commitment.
Preliminary Contract (atto preliminare di compravendita o ‘compromesso’):
This again, is a written contract which establishes the terms and conditions to which both parties have agreed, but also contains full details pertaining to the property, the vendor’s right to ownership (and hence, to sell) and stipulates that the property must be free from all liens, burdens, rights of third parties at the moment of the final contract.
It is a standard document other than for the inclusion of the negotiated conditions of sale.
After the signing it will be officially registered.
By signing the Preliminary Contract you are committing yourself (at the risk of losing your entire deposit which although negotiable, can be as much as 30%-40% of the purchase price) to the purchase of the property.
The vendor is equally committed in that if s/he withdraws from the sale, or is unable to meet the conditions cited in the contract, he is legally bound to repay you your deposit plus a penalty fee.
The estate agency is legally entitled to his/her fees at the signing of this preliminary Contract, but many agencies, including Cortona International, are happy to see you through to the Final Contract before requesting payment. Our fees are 3% + VAT of the purchase price.
Completion (atto notarile di compravendita o rogito)
The last step is the Final Notarised contract (completion)
It is done in front of a notary who is a civil servant and who ensures that the title to the property passes from the vendor to the buyer by a deed of sale.
If you are not proficient in Italian one can either request a legal translator to be present during completion (cost approx. E.400) or a legal power of attorney in favour of a third party.
With regard to a legal power of attorney it is easier to do this in Italy with the Notary who will preside over the contract.
It is a simple procedure which costs approximately E. 150/E.200 (with translation)
If however you are unable to do this, a power of attorney can be drawn up and authenticated in your country of residence.
The document will however have to be translated into Italian and then certified and authenticated by the nearest Italian Consulate.
This can be time consuming and therefore it is advisable to get this done well in advance of the final contract date.
Following completion, the notary issues a certified copy of the deed of sale and registers the original document with the Building Registry.
Costs normally incurred when buying a property:
One of the strange idiosyncrasies of buying a property in Italy is that the purchase tax, which is calculated by the notary using official tables, is based on the cadastral value of the property.
This is based on the rendita catastale of the property (the property’s accredited income).
These figures however, have not been altered in over 50 years!!
Therefore, the cadastral value of the property can often be as much as 50% or 60% less than the actual price you’re paying for the purchase.
If the property is to be a second home (ie. non-resident) you will be liable for a purchase tax of approximately 9% of the cadastral value + E. 100 (approx) for various stamps.
If the property is to be your main home (i.e. for which you would be legally bound to apply for residency within 18 months after completion), the purchase tax would be approx. 2% of the cadastral value + E.100 (approx.) for stamps.
The above is applicable for private parties where the property does not result as being "a luxury home". A property registered as "luxury home" (which are few and far between) is taxed at a higher rate.
When buying from a developer or construction company in place of the purchase tax VAT (Iva) can be applied at 4% (for resident), 10% for non-resident and 22% in case for a property that falls into the category of a luxury home.
The reasons for the former being subject to IVA are various and on occasion, not applicable. In such instances, it would be best to have the situation analysed and request a specific calculation be made for the property in question.
Agricultural land is taxed at 12%.
The notary’s fees on average are between E.2000 to E. 5000. All payments however can be calculated before the purchase takes place.
Since 1992 a new system has been introduced whereby one no longer has to pay a lump sum on the net gain of the property when it is sold unless it has been in your possession for less than five years from the day of purchase.
Instead, one now pays an annual tax calculated on the property’s cadastral value.
If you are not a resident and wish to sell your property within five years of having bought it, you will be taxed 20% on the net gain. A resident has the option of either buying another property within a year, as principle place of residency, or paying the 7% difference on the original purchase tax and interest on this sum. After five years of ownership there are no impositions.
Importation of Funds:
There are no restrictions on purchase monies being imported into Italy, but to ensure that proceeds of any resale can be repatriated, the purchaser is advised to obtain official documentation of the importation of those purchase monies and any incidental costs.