Buying Property in Italy

Overview

Italy allows both EU and non-EU citizens to purchase property, making it an attractive destination for international buyers seeking a home, investment, or lifestyle change. However, the Italian property purchase process has unique legal requirements that differ significantly from those in the US, UK, and Canada, from the compromesso (preliminary contract) to the final rogito (notarial deed).

For Canadians, there is currently a restriction on buying property in effect due to the prohibition on the purchase of residential property in Canada by non-Canadian residents. By reciprocity, while the Prohibition on the Purchase of Residential Property by Non-Canadians Act S.C. 2022, c. 10, s. 235 is in effect, Italy applies the same restriction to Canadian buyers. The prohibition is currently set to expire on January 1, 2027, although there are several exceptions. Please contact us for further information.

Understanding these steps and working with qualified professionals is essential to a smooth transaction.

The Purchase Process

Buying property in Italy follows a structured five-step process:

1. Research & Search

Begin by exploring the Italian property market through portals such as Immobiliare.it and Idealista.it, the two largest property listing sites in Italy. Define your criteria including location, budget, property type, and intended use (primary residence, holiday home, or investment).

2. Initial Offer (Proposta d'Acquisto)

Once you find a property, you submit a proposta d'acquisto (purchase proposal). This is initially non-binding, but becomes binding once the seller accepts and a deposit is provided. The deposit is typically held by the real estate agent.

3. Due Diligence

Before proceeding further, it is critical to conduct thorough due diligence. This includes hiring a geometra (surveyor) for a property inspection, verifying ownership records, checking for legal encumbrances (liens, mortgages, easements), and confirming that the property complies with building regulations and planning permissions.

4. Preliminary Contract (Compromesso)

The compromesso is the legally binding preliminary contract between buyer and seller. At this stage, the buyer typically pays a deposit of 10-30% of the purchase price. If the buyer withdraws, they forfeit the deposit. If the seller withdraws, they must return double the deposit amount.

5. Notarial Deed (Rogito)

The rogito is the final transfer of ownership, executed at a notary's office. The notary is a public official who verifies the legality of the transaction, ensures all taxes are paid, and registers the deed with the land registry. Both parties (or their authorized representatives) must be present.

Costs & Taxes

Understanding the full cost of purchasing property in Italy is essential for budgeting:

• Registration Tax: 2% of cadastral value for a primary residence, 9% for a second home (when buying from a private individual)
• VAT (IVA): Applies when buying from a developer or construction company, typically 4% for primary residence or 10% for second homes
• IMU (Property Tax): Annual municipal property tax on second homes. Not charged on primary residences (prima casa)
• TARI (Waste Tax): Annual municipal waste collection tax, varies by property size and location
• Notary Fees: Typically 1-2.5% of the purchase price, depending on the complexity of the transaction
• Agent Commission: 2-5% per party. In Italy, real estate agents represent BOTH the buyer and the seller, which is a significant difference from the US and UK markets

Codice Fiscale

Before you can purchase property in Italy, you must obtain a Codice Fiscale (Italian tax identification code). This alphanumeric code is required for all financial transactions in Italy, including signing contracts, opening bank accounts, and paying taxes. To be valid, it has to be officially issued by the Italian Revenue Agency.

Key Differences from US, UK & Canada