Italian property sale

Italian property sale



Safely and Effectively Sell an Italian Property

Top-20 Tips: the Italian Property Sale process, what to do, how to proceed, legal requirements, involved subjects, things to know, costs, how to transfer the proceeds abroad etc.

1) How to Determine the Italian Property Sale Price:

In Italy there is no way to easily find out what properties sold recently or are for sale in the area and for what price. There is not a national database, similar to the MLS in the USA. Therefore, local real estate agents and surveyors (“geometra”) estimate property value based on their professional experience. List to the public a price 15% to 20% higher than your target price, to allow negotiation.

2) Italian Property Record: 

There are two property registers: “Catasto” and “Conservatoria“. All the records need to be in order. Record inconsistencies, for example due to previous omissions or recording errors, need to be addressed prior to listing the property for sale. Record consistency rules recently got stricter.

3) Italian Property Title:

Review the property title before listing for sale. Check your entitlement, sale or use restrictions, first offer rights and any other limitations. If possible check also the title of the subject you acquired the title from. Disclose relevant information to the real estate agent and/or the prospect buyer prior to sale commitment, especially if you were not assisted by a lawyer when you acquired the property or if you inherited it.

4) Italian Property Compliance (“conformità catastale”):

In force since 2010. Verify that the property plan (“planimetria catastale“) filed with the local municipality (“Catasto“) is consistent with the actual property status (position, shape and use of internal rooms, bathrooms etc.). Many Italian properties built prior to 2010 do not meet compliance requirements, even if the owner never did any renovation work on the property. This is mainly due to low attention to this aspect before 2010. The owner has to confirm full property compliance in order to legally complete the sale.

5) Italian Property Habitability (Certificate of Occupancy –  CO – “agibilità“):

Italian residential properties must have the habitability certificate in place (released by the local municipality) or at least meet the requirements to successfully apply for it. This means all systems in order, sound structure, healthy inside, building code compliance etc. However, the parties can agree otherwise. If your property does not have CO or does not meet the CO requirements, disclose it in order to avoid severe liability and to save substantial expenses to obtain a CO.

6) Italian Energy Efficiency Certificate (“Attestato di Prestazione Energetica” – “APE“, f/k/a “ACE“):

It certifies the energy efficiency rate of your Italian property. It needs to be in place when you list the Italian property for sale. Also, you have to show the Energy Certificate to the notary to complete the sale and the original goes to the buyer. Appoint a local surveyor to prepare it (cost ranges from EUR 150 to 450, depending on property specifications, size, location etc.).

7) Italian Condominium Rules and Obligations: 

If the property is part of an apartment building, disclose pertinent information, such as (i) condominium association rules and restrictions (“Regolamento di Condiminio”), (ii) condominium expenses contribution shares (“tabelle millesimali”) which establishes how much each owner shall pay with respect to common expenses, (iii) extraordinary common expenses already approved by the residents but not fully paid yet.

8) Real Estate Agent (or Relator) – “agenzia immobiliare”:

In Italy a real estate agent represents both the buyer and the vendor (seller). Rarely each party has his/her own independent real estate agent. Standard commission due by each party is 3% + VAT (currently 22%). Commission is due upon purchase offer acceptance, even if the sale does not go through. Therefore, once you involve an agent, a commission is due even if you find a buyer yourself without agent’s help. Negotiate better terms: lower commission, subject payment to final completion, etc.

9) Purchase offer – Preliminary Contract (“proposta di acquisto“, “preliminare” or “compromesso“): 

When you sign a document regarding property sale you are under contract, bound to complete the sale. Whatever the parties have not expressly agreed on, is governed by default rules set by the Italian legal system, which are typically in favor of buyers. Therefore, once the owner accepts the purchase offer there is little room to avoid default duties and obligations. Take care of due diligence, disclosure, and liability limitations prior to going under contract.

10) Italian Property Sale Deposit: 

Agree on a deposit to cover your costs in case of buyer’s breach. In most cases it is vendor’s interest to qualify the deposit as a pre-established compensation measure in case of buyer’s breach of contract (“caparra confirmatoria”). This denomination, in the event of buyer’s breach, allows the vendor to retain the deposit without proof of damages or loss.

11) Italian Purchase Offer Registration:

If you accept a purchase offer (“proposta di acquisto”) or sign a preliminary purchase contract (“compromesso””) ask for its registration. Buyer shall pay for it unless otherwise agreed. Contract registration is a legal duty. It protects more your interests and helps for tax and Anti Money Laundering regulation purposes.

12) Italian Property Possession: 

The vendor gives the property keys to the buyer on completion. Parties can agree on early or late possession. For example, if the property is rented, the tenant is entitled to stay in until the lease contract is over. Disclose pending lease agreement or occupancy. Regulate early possession terms since residential rental is subject to rules that are more favourable to occupants.

13) Italian Property Furniture:

Common practice in Italian property sale is to sell a property without furniturekitchenappliances or with goods. Buyers might pay extra for content in usable conditions. If you cannot deal with emptying the property, leverage what has a value and disclose what you will leave to the buyer when accepting an offer.

14) Italian Notary

The law requires an Italian notary to certify property sales. Italian notaries are law professionals who, in property transactions, act as public officers, with a neutral role between buyer and vendor. They carry out several formal checks, such as on title, parties identities, capacity, entitlement and powers. They also advise about legal and tax aspects. The buyer chooses the notary, unless otherwise agreed. Typically the parties meet the notary only on completion, to finalize the deal. At least a couple of days prior to the meeting, ask for a draft of final sale agreement, review it and ask all questions needed to fully address your concerns in advance.

15) Italian Property Sale Taxes and Costs: 

Italian property sale transactions are subject to several taxes and costs, in addition to the ones above, such as (i) transfer taxes, on the buyer, unless otherwise agreed; (ii) notary fees, on the buyer, unless otherwise agreed; (iii) up to 26% capital gains tax (only if less than five years passed from your purchase); (iv) perhaps capital gain tax in your own country and/or the country where you live (check this with your local accountant).

16) Italian Property Means of Payment:

Payments are typically done through banker’s draft (cashier checkcertified check, “assegno circolare”). If you do not have an Italian bank account, you must make sure that the buyer does not make checks payable to you, or it will be extremely hard and expensive for you to cash them. If you do not have an Italian bank account, you can ask a notary or a lawyer or a real estate agent that you trust if you can use their escrow account service, although please know that it is not common for professionals to offer an escrow account service. We do.

17) Currency Exchange: 

If you expect to receive the Italian property sale price to your home bank account in a different currency (not a EURO account), consider better currency exchange options and save up to 5% of the transferred amount in bank exchange rate commissions and international money transfer charges.

18) Pending Mortgage:

If you have a mortgage on the property, this can be an appealing aspect for a buyer: a buyer could take over the residual loan without any cost nor mortgage institution authorization. Otherwise, coordinate the sale with notary, bank and buyer, for early loan termination and mortgage cancellation upon final completion.

19) Italian Power of Attorney (“procura”):

Power of Attorney (PoA) is a document through which you give power to another subject to appoint an intermediaryaccept offers and take all steps up to completion without the need to be physically present in Italy. You can formalize it in your own country and your home town, without involving the Italian consulate.

20) Italian Property Lawyer:

The involvement of an Italian lawyer in your Italian property sale is not required by the law. However, it is advisable to involve an independent lawyer with extensive experience to look after your exclusive interest.

A  lawyer will limit your exposure and liability, leverage opportunities, increase protection and guarantees, negotiate lower costs, receive and make payments, maximize results and, in general, will assist you to pursue a safer and smoother transaction.

In our international real estate practice our team of experienced bilingual Italian lawyers every day assists foreign clients buying and selling properties nationwide. With the assistance of large networks of surveyors, real estate agents, notaries and associates throughout Italy, we offer a comprehensive and competitive service from start to finish.

We negotiate price and commissions, carry out checks and searches, liaise with involved parties, prepare documents, act as Power of Attorney, make and receive payments, offer escrow account service with a competitive international currency exchange program. The transaction with us can be fully completed with no need for you to travel to Italy.

All documents and information can be exchanged via email or courier. No need to involve Italian consular offices.

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