Complete guide to buying property in Italy

What are the costs of buying in Italy?

When buying property in Italy, consider the following taxes and fees:

• Registration tax (imposta di registro): 2% of the cadastral value for a main residence, 9% for second homes, with a minimum of €1,000, when buying from a private seller.
• Land registry and cadastral taxes: €50 each when the registration tax applies, €200 each when VAT applies.
• VAT: 4% to 22%, depending on the property, when buying from a developer or company.
• Mortgage tax: 0.25% of the loan for a main residence, 2% for a second home.
• Notary: typically €2,000 to €5,000 for the purchase deed, plus a separate fee for the mortgage deed.
• Agency fee: usually 2% to 4% plus VAT, paid by the buyer when an agency is involved.

Work out your borrowing power

Debt ratio

Italian banks use a debt ratio to decide how much you can borrow. Your mortgage payment, plus other loans, shouldn't exceed 30% to 35% of your net income. For example, a monthly payment of €900 needs a net income of around €3,000.

Loan to value

For non-residents, the loan typically covers 50% to 70% of the property value. You'll need to provide the remaining 30% to 50% plus purchase costs. Italian citizens living abroad can often borrow more.

Estimate your budget

Italian property hunting

Once your budget is set, you can start searching. You have two main options.

Through a real estate agent (agente immobiliare). Agents have a wide range of properties and know their area well. Many can assist you in English if the owner doesn't speak it.

Directly from private owners. Websites and local newspapers often list properties sold privately. Popular property portals include immobiliare.it, idealista.it and casa.it.

Viewing a property

1. Take your time. Don't rush; evaluate the house calmly.
2. Bring someone you trust. A second opinion helps you spot things you might miss.
3. Inspect thoroughly. Check walls, windows, roof, systems and signs of damp.
4. Compare prices. Research similar properties in the area.
5. Visit at different times. Check light, noise and ventilation at different times of day.
6. Ask questions. Why is the owner selling, what are the running costs, is any work planned?
7. Stay neutral. Even if you love the house, keep your excitement for after the negotiation.

Essential pre-purchase checks

Questions to ask the agent or seller

Does the property comply with the land registry and planning records? Discrepancies between the property and the plans filed with the land registry or the municipality are common in Italy. They are often fixable, but you should know about them before you commit.

Is any major building work about to be approved? If the condominium votes to redo the roof or facade soon after you buy, you'll share the cost.

Are there mortgages or other charges registered on the property? Existing mortgages, liens or other burdens must be identified and cleared. A professional should help you read the documentation.

Are the systems compliant, and is there a valid energy performance certificate (APE)? The APE is mandatory for a sale.

Documents to verify

Ask the notary you appoint to check these documents:

1. Deed of origin: how the seller acquired the property (purchase deed, inheritance, court decree and so on).
2. Latest planning file: confirms that the property matches the plans held by the municipality.
3. Floor plan and cadastral survey: confirm the property matches the cadastral records.
4. Energy performance certificate (APE): required by law.
5. Condominium expense breakdown: what you'll pay each year.
6. Minutes of recent condominium meetings: reveal any planned works.
7. Mortgage and charges certificate: shows whether the property is burdened by mortgages or other charges.

Making an offer

Once you know the final price and all the costs, you're ready to make an offer. The purchase usually happens in three stages.

1. Purchase proposal (proposta d'acquisto). You make a written offer with a small deposit, often from €2,000, to show you're serious. If the seller doesn't accept, the deposit is returned. If you need a mortgage, ask for the proposal to be conditional on mortgage approval, so you don't lose the deposit if the loan is refused.
2. Preliminary contract (compromesso). Seller and buyer commit to the sale. You pay a larger deposit, typically 10% to 20% of the price, and usually part of the agency fee. Under Italian law, if the seller withdraws, they may have to return double the deposit.
3. Final deed (rogito). Signed in front of the notary, it transfers ownership. This is when the balance, including the mortgage funds, is paid, along with the purchase taxes.