Italy consists of a large peninsula (Italian Peninsula), with a distinctive and unmistakable boot shape that extends into the Mediterranean Sea. Together with its two main islands - Sicily and Sardinia, Italy creates distinct bodies of water, with as the Adriatic Sea to the north-east, the Ionian Sea to the south-east, the Tyrrhenian Sea to the south-west and finally the Ligurian Sea to the north-west. Italy offers great diversity to the potential home buyer from lakes to beautiful coastline and from rolling countryside to breathtaking mountains. Property prices in Italy are still relatively cheaper than that of other European countries, which means that there are still some good investments to be made.
While the amount of Italian red tape is well known, and bureaucracy tends to move rather slowly, buying a property in Italy is actually pretty straightforward. Anyone wishing to buy an Italian property must first obtain a tax identification number (codice fiscale) from the Italian authorities.
There are then three main buying stages:
1) The buyer makes an offer, which commits him/her to buying the property at the given price. If the seller accepts, a deposit of 10% is usually paid.
2) Both parties then sign a legally binding buying proposal ( compromesso di vendita). This outlines all the details of the transaction, including the completion date.
3) Should the seller withdraw, they must pay the buyer double the value of the deposit. If the buyer pulls out, he/she loses the deposit in full. On completion both parties sign the final contract (rogito) in the presence of a notary, who then issues the deeds and informs the land registry to transfer ownership. The remainder of balances and all taxes must be paid at this time.
Buyers should set aside around 15% of the purchase price to cover costs. Stamp duty/land registration tax for non-residents (i.e. second home owners) varies from 10% of the declared price for urban property & up to 17% for a rural property. Most homes are considered urban, and rural tends to refer only to land or land with an agricultural building on it. Residents or those intending to make a permanent stay will pay 4% stamp duty. VAT on new properties ranges from 10% to 20%, depending on whether the property is considered a luxury home. This is usually included in the price. Reduced rates of 4% VAT are available for those who build their own property. Estate agents fees are usually between 3% & 5%, notary fees average at 3% and legal costs tend to be around 2% of the purchase price. Local taxes (ICI) of between 0.4% and 0.7% also apply to anyone owning a home in Italy.
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