Italy’s charm is irresistible—its rich history, stunning landscapes, and vibrant culture make it a dream vacation for many. Owning property in Italy allows you to experience la dolce vita firsthand, enjoy world-renowned cuisine, and immerse yourself in the scenic rolling hills that define regions like Tuscany.
For those looking for a more long-term relationship with the boot, an Italian attorney well-versed in real estate and immigration can be indispensable. Whether you’re looking to buy a vacation home, invest in property, or make a permanent move, Italy offers a wealth of opportunities. Buyers can choose from a charming villa, a modern apartment, a historic property, a detached house, or commercial properties, all within the robust Italian real estate market.
There are no significant restrictions for most foreigners interested in buying property in Italy. This guide will provide an overview of the process, provide helpful tips, as well as highlight the added benefits that come with being an Italian dual citizen.
Understanding the Process
Purchasing property and relocating to Italy involves several key steps:
Research & Planning
- Identify Your Goals: Are you looking for a vacation home, a permanent residence, or an investment property?
- Location Selection: Consider factors such as climate, proximity to family, cost of living, and lifestyle preferences. House prices and property price variability can be significant across different regions and property types in Italy, so research local markets carefully.
- Role of Real Estate Attorneys: In Italy, attorneys generally play a much larger role in assisting with property selection than in the U.S., sharing more overlap with U.S realtors. Your attorney will take into account the climate, culture, and lifestyle you are looking for and provide you with a variety of options based on extensive research.
- Role of Real Estate Agents: In Italy, real estate agents must be registered with the local chamber of commerce, possess proper qualifications, and have professional indemnity insurance. Unlike in the US, Italian real estate agents operate as independent professionals and are typically compensated by both the buyer and seller. Agents are not obligated to conduct due diligence on properties; however, they must disclose any known issues. Buyers should consult legal and technical experts to verify title validity, zoning regulations, and encumbrances. Agents can charge fees for their services even if they only introduce the buyer to the property. In Italy, about 90% of properties are listed by agencies, with no commission involved for privately listed properties. The real estate agent’s commission is typically due at the signing of the preliminary contract, and buyers should be aware of the differences in process and costs when purchasing from private sellers versus agencies.
Legal Requirements
- Notaio: It is important to have the guidance of an Italian attorney for those interested in purchasing Italian property. However, an Italian notary (Notaio) will be essential to ensure the legality of any transactions. The Italian Notaio’s function is rather different from American notaries, and they are a crucial factor to legitimize such transactions. The Italian government requires that all property transactions be overseen by a notary, and navigating Italian bureaucracy can add complexity and time to the process. It is also vital to verify property titles and understand all legal aspects before proceeding.
- Codice Fiscale: It is also necessary to obtain a Codice Fiscale, the Italian tax identification number required for significant transactions like property purchases. The Codice Fiscale is also required for financial transactions related to property purchases, such as opening bank accounts and paying taxes and fees. Although you can obtain one through the Italian consulate in your region, the process can be lengthy. For quicker processing, it is advised to obtain a Codice Fiscale in person in Italy or with the assistance of an Italian lawyer.
Financial Considerations
- Financial Requirements: Account for the purchase price, notary fees, taxes, and potential renovation costs. This is particularly relevant in regards to frequently advertised “€1 houses”. Navigating property taxes is particularly important when choosing a given property. Comprehensive financial planning is essential, as buyers must consider tax implications, tax obligations, and the impact of value-added tax (VAT), property registration tax, registration tax, purchase taxes, and the main property tax (IMU). These taxes and fees can vary depending on whether you are a non-resident, foreign buyer, or Italian resident, and whether the property will be your primary residence or an investment.
- Italian Bank Account: While not required, having an Italian bank account is highly advisable. It simplifies transactions, reduces currency exchange fees, and can make it easier to obtain a mortgage. Additionally, local banks are often more accustomed to handling property-related financing, payments, and legal fees. While this can be difficult without residency, an Italian attorney can be of significant help when opening an Italian bank account. Italian banks are the primary lenders for property purchases, and obtaining an Italian mortgage may involve stricter lending limits for non-residents and require additional documentation.
- It is also important to avoid double taxation by understanding double taxation treaties between Italy and your home country, as well as the reporting requirements for foreign property ownership.
Initiating and Negotiating the Purchase
- Purchase Offer: Make an offer (proposta di acquisto) and negotiate terms with the seller. It’s advisable to have a local real estate agent and/or legal advisor assist you with this process to ensure fair terms and conditions.
- Preliminary Contract: Once an agreement is reached, sign the preliminary contract (compromesso) and pay a deposit. This contract outlines the terms of the sale and is a binding agreement. The purchase agreement is a critical step in property transactions, as it reserves the property for the buyer and sets the stage for the final sale.
Finalizing the Purchase
- Deed of Sale: Sign the final deed of sale (rogito) in the presence of a notary.
- Registration: Register the property at the local Land Registry (Catasto). Registering a primary residence is important, as primary residences and primary residences may qualify for significant tax benefits and exemptions, such as reduced or waived IMU and TARI.
Property management is an important consideration after purchase, especially for foreign investors and those interested in rental properties. Rental income from Italian real estate can provide ongoing returns, but it is important to understand the regulations and tax treatment for rental income.
Americans buy property in Italy alongside other foreign buyers, foreign investors, non-EU citizens, EU citizens, Italian citizens, and Italian residents. Each group may face different requirements regarding a visa or residency permit, elective residency visa, elective residence visa, residence permit, or residency permit, especially if you wish to spend extended periods in Italy. Property ownership alone does not grant automatic residency, so understanding the appropriate visa or permit is essential.
The process to buy property and purchase real estate in Italy (Italy buying property) involves several legal and procedural steps, and it is highly recommended to speak Italian or work with professionals who do, to navigate contracts, notary procedures, and Italian bureaucracy effectively.
Helpful Tips for a Smooth Transition
- Learn the Language: While many Italians speak English, knowing Italian will help you navigate daily life and the property acquisition process more easily.
- Understand Local Customs: Familiarize yourself with the local customs to integrate smoothly into your new community. It’s important to keep in mind that Italy is extremely culturally diverse, and was only unified as one nation almost 100 years after America’s founding. That said, it is full of unique values, traditions, cuisines, and dialects varying from region to region.
- Build a Support Network: Connect with other expats and residents to get advice and support.
- Register for Healthcare: Register with the Italian National Health Service (Servizio Sanitario Nazionale) for access to healthcare services.
Benefits of Italian Dual Citizenship When Purchasing Property or Relocating to Italy
Being an Italian dual citizen offers several advantages when purchasing property or relocating to Italy:
- Easier Legal Processes: Italian dual citizens can bypass some of the restrictions and bureaucratic hurdles faced by non-EU citizens. For example, non-EU citizens often need to obtain a special permit to purchase property in Italy, which can be a lengthy and complex process. Dual citizens, on the other hand, do not require this permit, making the process much more straightforward. Additionally, dual citizens do not need to worry about residency permits or long-term visas, which can be a significant hurdle for non-EU citizens. This means that dual citizens can move more quickly and easily through the legal and bureaucratic steps required to purchase property and relocate.
- Access to Financing: Dual citizens may find it easier to obtain mortgages and other financial services in Italy.
- Freedom of Residency: Dual citizenship allows you to live and work in Italy and most of the EU without time restrictions, making it easier to manage and enjoy your property.
- Tax Benefits: You may qualify for a tax deduction if you fall into one of the following categories:
- You are an Italian citizen, you are purchasing your first house in Italy, and you are moving your residency there.
- OR you are an Italian citizen living abroad, you are registered with the AIRE, and you are purchasing your first house in Italy, even if you do not plan to move your residency there.
Partnering with Experts
Whether you hold Italian citizenship or not, navigating the complexities of Italian property purchase and relocation can seem daunting. ICAP, in partnership with the esteemed Italian law firm ILF, offers comprehensive services to assist you every step of the way. From legal guidance to finding and closing on the perfect property, we’re here to make your transition to Italy as smooth as possible.
Start Your Italian Adventure with ICAP
Purchasing property and relocating to Italy can be a rewarding experience, offering a seamless blend of cultural heritage and modern living. By understanding the process, planning carefully, and working closely with an experienced Italian attorney, you can turn your dream of owning an Italian home into a reality. Whether you’re drawn to the bustling cities or the serene countryside, Italy has something to offer everyone. Contact us at (312) 796-9970 or schedule a free call below and take the next step in pursuing your Italian dream.