Purchasing Real Estate in Italy

PART 139: It might be interesting to share how we pulled off living in Italy for part of the year. I will post some steps and what we are learning along the way.

We love every minute of it, and what was once a dream is our life!

We live in Tuscany in the Fall, then back again in the Spring, and in California for the rest of the time (in a previous blog, I explained why we live in Italy only part of the year).

Step 1: As we explore areas in Italy, we discover some gems worth sharing. Some are well-known tourist magnets, and others are lesser-known but always amazing. 

This week, let's explore how to purchase real estate in Italy.

Step 2: Source of information

This blog is in the form of an interview with our trusted real estate agent in Italy (Tuscany), Sandro Marucci, from the agency "Eco Casa Immobiliare," part of the brand "Agente Immobiliare Sostenibile."

https://www.ecocasaimmobiliare.it/web/default.asp?language=eng

Sandro guided us through purchasing our home in Tuscany, making the process smooth and transparent. I asked him to share some of his expertise with readers of our blog who are considering taking this step.

Step 3: What is the first step to buying a house in Italy?

First and foremost, I recommend that you visit areas of interest thoroughly. Spend a few days—ideally as many as possible—immersing yourself in the community to learn about its characteristics. Focus on available services, the local economy, social dynamics, demographic trends, and future development prospects.

Additionally, trust your instincts. Don't hesitate to explore lesser-known neighborhoods that might not be widely recognized but could offer delightful surprises!

Once you have identified a suitable area, it's crucial to determine what type of investment you want to pursue and what kind of real estate you should be searching for.

Step 4: How can I find a trustworthy real estate agent?

I recommend searching for real estate agents or agencies on the website www.cercacasa.it. This portal is managed by FIAIP, the Italian Federation of Professional Real Estate Agents. It allows you to search for agencies and agents registered with the federation by area, ensuring they meet professional and ethical standards.

Step 5: What are all the steps to buy a house in Italy? What is the role of the real estate agent?

Italy is known for its complex bureaucracy, and the real estate sector is no exception. To buy a house in Italy, the first step is to obtain a "Tax Code" from one of the Revenue Agency's offices.

The buying and selling process typically starts with the drafting of a purchase proposal. Once the seller accepts this proposal, it becomes a binding agreement between the parties.

Next, a further agreement called the "Preliminary Purchase and Sale Agreement" can be signed. This agreement can be prepared by either the real estate agency or a notary.

Finally, the buyer becomes the official owner of the property when they sign the notarial deed at a notary of their choice.

This overview highlights a process that requires multiple checks, document submissions, and various activities. A real estate agent plays a crucial role in simplifying this process for the client.

Step 6: What are the differences between real estate agencies in Italy? Do some offer more services than others?

In Italy, most real estate agencies are small, typically consisting of 1-3 people and often family-run. Some operate as franchises, while others have their own brand. Larger agencies are more structured, allowing them to offer more comprehensive and advanced services to their clients. However, this does not mean smaller agencies cannot provide excellent service.

I advise always reading the reviews available on platforms like Google or Facebook. The level of satisfaction among past customers can give you a clear idea of the service you can expect.

Step 7: Is there an "MLS" or multiple listing service in Italy where I can view all the properties for sale?

In Italy, the real estate market functions differently than in the USA. In the U.S., there are specific roles for a "Listing Agent," who represents sellers, and a "Buyer Agent," or "Property Finder," who represents buyers. Although Italy is gradually moving toward this model, most agencies still represent both sellers and buyers. Consequently, both parties are required to pay for the professional services rendered.

Several Multiple Listing Services (MLS) are available, but they are typically limited to participating agencies and often have geographical restrictions. The most comprehensive MLS is Agestanet, which includes over 1,900 agencies nationwide. However, it is an internal platform, meaning that clients cannot view all the agencies and properties directly; only partner agencies, like ours, have access to the complete database.

Step 8: I've noticed that many homes are for sale by owners without an agent. What are the risks of buying a house directly from the owner without the supervision of a real estate agency (especially for a foreigner)?

Approximately 80% of property sales in Italy are conducted through real estate agencies, while the remaining 20% occur between private individuals. Utilizing a real estate agency can help sellers reduce the average time to sell a property and improve the negotiability of the asking price. Buyers also benefit, as agencies assist them in finding properties that best match their needs.

Beyond these advantages, real estate agencies play a crucial role in collecting and verifying documents, which is essential for ensuring a secure transaction that protects both the buyer and seller. Agencies are responsible for conducting all necessary checks and controls before listing a property for sale. This proactive approach helps identify and resolve potential issues related to the sale that vary widely before the property is placed on the market. This makes the process safer and minimizes the risk of unexpected surprises.

Foreign buyers, who may often be unfamiliar with the language, laws, and intricacies of real estate sales in Italy, are more likely to encounter problems.

Step 9: Are there any risks in buying a property in Italy?

Several risks are involved in real estate transactions, and it is the responsibility of the real estate agent to identify and mitigate these risks before any binding agreement is signed between the seller and the buyer.

Some potential risks include:

1. Property-related risks: These may involve discrepancies in urban planning, structural problems, hydrogeological risks, flood risks, or documentation issues regarding the property's origin.

2. Seller-related risks include concerns over the seller's solvency, ongoing bankruptcy proceedings, or legal disputes among co-owners.

Purchasing a property without proper checks can lead to financial losses or acquiring a property with serious issues.

Step 10: How do real estate agent commissions and costs work in Italy?

Agency commissions typically range from 2% to 4% of the purchase price, applicable to both the buyer's and seller's sides. I recommend caution regarding agencies that offer zero commission services for either party; such offers may result in lower service quality or potentially hidden costs.

Some agencies require payment upon acceptance of the purchase proposal, while others ask for it upon accepting the notarial deed. We receive payment at the time of the deed, but I respect that others may choose to operate differently. Ultimately, each agency determines its own payment structure.

Step 11: How are property taxes calculated in Italy?

Taxes are paid at the time of purchase and during ownership.

When executing the notarial deed, the buyer must pay notary fees in addition to the remaining purchase price of the house. These fees vary as a percentage of the sale value and depend on whether the purchase is made with or without a mortgage. The notary's invoice will also include taxes.

The most significant amount is the registration tax, which applies in the case of a private purchase; this tax is set at a rate of 9% of the revalued cadastral income. If the property is purchased from a construction company, VAT of 10% is applied to the purchase amount.

For buyers acquiring their first home (which requires actual residency), the taxation is reduced to 2% for the registration tax and 4% for other applicable taxes.

Step 12: When I buy a house in Italy, how do I register all the utilities in my name?

Typically, the real estate agency manages the utility transfer for the buyer. If not, you can directly call the utility managers to ask about their procedures for takeover or re-connection.

Step 13: How easy or difficult is buying a house in Italy?

If you choose the right real estate agent, it's very easy!

More next time.

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