Buying Property in Italy

I have purchased property in Europe and what i learned was dont go to a forum for reliable answers. You will only get what you pay for. Its easy to find real estate agents in every location in Europe. Start there. Another reliable source will be property management companies that take care of properties for foreign owners. Again, Google will find them for you. https://www.google.com/?gws_rd=ssl#safe=off&q=purchasing+real+estate+in+italy&spf=1496195956340

It can be very complicated and vary greatly per country so you need to obtain local legal assistance. All of the documents will be in Italian so you need someone to translate very letter. And there are publications address these issues. Do some google searching.

I agree, you will need a real estate agent and a lawyer.

Oh, and purchasing it is one set of issues

Maintaining it, setting up utilities, paying taxes and bills is another set of issues

and

if you plan on using it for income in any manner, form or .... that's a whole different set of issues.

then if you do derive income or you move money there you have US tax and treasury issues

did I mention insurance?

been there, done all of this .......

Buying a Home in Italy by David Hampshire provides a decent overview of issues and considerations when purchasing property in Italy. It could be a good starting point to address your questions, but of course you'd want to consult the appropriate professionals should you decide to move forward. Friends from UK who recently purchased a property had all documents reviewed by both UK and Italian attorneys.

If you really want to do it, don't let anyone scare you. Buying isn't all that complicated, but it can take awhile, depending on how you pay for it. The buying process is basically like it is in states like New York and Massachusetts. Shop around with an agent or two, put a binder down on one you like. Go to contract--and somewhere in here apply for a mortgage, if you need to. Then when everything's set to go, do the closing. That said, maintaining by remote control can be complicated. It's best to speak Italian--and real estate sites for Italians have better deals than the expat sites. Setting up utilities and paying your taxes without being there presents some challenges, too. It's not daunting, but it will take time and patience.

The process is not more complicated than what I experienced in California (actually simpler).

However it is still best to hire a real estate agent to represent your interests since you probably don't have the local knowledge and time. There is no need for a lawyer. If you need someone to formally represent you with a power of attorney even for the purchase (signing contracts etc.), that person can be the real estate agent you hire (I use my college buddy who's a CPA). The Notaio (Notary), a mythological figure of the Italian bureaucracy, plays the leading role in this process.

The Notaio in Italy is not like a Notary in America. The Notaio is actually a lawyer, a Public Official representing the Italian Republic. The real estate agent representing you (or the seller's) will likely agree to use one they know. The actual purchase must occur before a Notaio (notary). He also prepares the official documents and contracts. He checks and verifies all titles, certificates, liens, and guarantees on them. He's responsible by law if he screws up.

So, the Notaio in Italy does what in America is performed by the Title Company, the Lawyer, the County Assessor and the Tax Collector, he also represents the Republic of Italy. Hence his mythological status. Expect to pay exorbitant fees to such Infernal Monster.

The purchase steps are:
1. Verification of property: Concessione Edilizia (building permit), habitability certificate, Registration at the Catasto (public register of real estate), title, liens, disclosures etc. The above will be done by the real estate representing you. But the notaio will also do a formal verification of the documentation.
2. Proposal (in writing) with payment of 10-20%. The seller has a certain time to accept or deny.
3. Compromesso (Preliminary contract).
4. Rogito (Final Contract) signed before the notaio, which represents the actual transfer. The Notaio will also formally checks the existence of all permits, certificates, titles, existence of liens. He'll also collect the taxes resulting from this act.

NOTE: The Notary (notaio) costs are FULLY the responsibility of the buyer. The fees amount varies with the value of the property but it is approximately 1% of the value plus 1% of the value of the mortgage loan.

So if you buy a 300k euro apartment with a Catasto (official register) value of 100k, (in my experience, the catasto value is about 1/3 or less than actual value), between Notaio fees and VAT (21% on the fees) expect to pay close to 3,500 euro. Maybe the mortgage portion doesn't apply to you as I suppose you pay cash.
In addition the Notaio collects the taxes, such as
Imposta di registro: 7% del Catasto value, or 3% if first home (not your case)
Imposta ipotecaria e catastale: 3% of Catasto (Register value) unless first home (not your case)
Other taxes: about 500€;

So the taxes alone are another 10,000+ euro (over 10% of the Catasto value) on our example (notary, as a public official, collects at the time of purchase).

It's very unlikely that an American bank will lend you money to buy property abroad, because in case of default, it might be difficult for the bank to repossess. Also not sure if an Italian bank will lend money to a person residing overseas. So the best is have your own cash or borrow money from your bank against some other collateral (maybe a second mortgage or equity loan on your American home).

apaonita, i wasn't trying to scare anyone. I own 3 properties in Europe and am shopping for a fourth. But i learned the hard way on the first one. First build a support network, then hire experts (cheap in my case) and then let them teach you. And its not just about buying. Its about what comes next. BUT, best thing i have ever done. Absolutely no regrets. AND, if you do rent it out, learn a little about the tax laws in the home country and in the US and it can become an even better deal.

James E.--I just didn't want them to feel that it's such a negative experience. I've done it a couple of times and it's long and bureaucratic, but it's a great way to guarantee that you'll go back. Your point is well taken, though. I already had a network of friends, some relatives not too far away, and an Italian passport, so my experience isn't the typical one.

Oh, the first one was a blast. an attorney, an attorney to watch the attorney and another attorney to watch the first two. Then a translator to tell me if one of the attorneys wasn't being square. Then there was the issue of the cash deposit, and just plain carrying that much cash. Then the first contractor, and the second contractor (the one that stole the gas meter and didn't cap the line properly leading to the building being filled with gas. The third contractor knew the three card monty better than anyone I had ever met. The second property an the third were child's play. Understanding the taxes, common fees, utility contracts, insurance contracts; that was interesting too.

But in retrospect it was a blast. Still one of my best decisions. You just have to remain flexible and go with the punches.....

Buying is one thing and there's much good info already posted, but maintaining, repairing and enjoying the property over a longer period is another. For that you need to speak and know a good bit of Italian. Without getting to at least an advanced intermediate level, you will eventually feel beleaguered and isolated as you deal with shopping, neighbors, repairmen, and bureaucrats. After a few years without cultural connections, you'll stop enjoying the property after all your friends and relatives have visited. We have owned in Italy for almost 30 years and we still love it, but we've watched many unrealistic foreign owners in our region move away after just a few years.

I've owned property in Hungary for 15 years. I speak 6 words of Hungarian; words that explain that I don't speak Hungarian and show some common courtesy. I don't feel the least bit alienated. We have a better social life in Hungary than we do here. When not in use I rent my places to tourists and I have a management company that takes care of all of those details. I just collect my cut when I am in town. ZERO worry about anything. So it depends on what you buy and what you do with it and what your expectations are.

Home ownership is high in Italy, just shy of 80%, so there is a good process in place and it works well most of the time, but you're wise to fully understand what you'd be getting yourself into to avoid unwanted surprises. The process is different as Italy uses the civil code legal system, not the common law system found in many English speaking countries.

If you don't speak Italian, you will need to insure you work with professionals, before and after the purchase, who are bilingual. As others have already mentioned, you'll need to consider ongoing ownership issues like maintenance. Note that purchasing a property doesn't impact immigration rights; buyers may still need a visa if they plan extended stays. Disclaimer: I'm a licensed Real Estate Broker in Italy.