In order to buy a house in Italy as a foreigner, it is necessary to understand whether foreigners are among those who can buy housing in Italy. The law distinguishes three categories of foreigners who can buy a house without any problems:
– if they are legally residing foreigners together with their family members and stateless persons for less than three years, a valid residence permit or resident card is required;
– if these are illegally residing foreigners, there must be an international agreement permitting such a purchase, or a so-called reciprocity condition, i.e. that in the foreigner’s country of origin the Italian citizen must also be allowed to buy a house
– if they are citizens of the EU and/or EFTA (European Free Trade Association) or stateless persons who have resided in the country for more than three years, then there are no restrictions.
After carefully checking the conditions that allow a foreigner to act, it is necessary to understand what type of real estate is planned to be purchased (first or second home, luxury real estate, condominium, purchase from private individuals, etc.).
The procedure of buying a house in Italy: the role of the notary
Buying a house in Italy for foreignersLike any real estate transaction, the purchase goes through three stages: the offer to purchase, the preliminary purchase and sale agreement (or compromesso) and the final contract. At both the intermediate and final stages, the presence of a notary allows the agreement of the parties to be given legal form.
If in the case of a preliminary contract of sale his presence is not mandatory, although it is strongly recommended, then in the case of a final contract a notarial power of attorney is necessary not only for the guarantees that the parties have undertaken to fulfill (among which the most important are the payment of the price and the transfer of ownership to the buyer) and which the notary seals, but also for a number of subsequent actions arising from the agreed upon. In fact, as a civil servant, he will have to decipher the purchase and sale transaction and transfer all the documents related to it to the Land and Property Register for deciphering. Only in this way will the fact of the transfer of ownership from A to B in relation to third parties be truly recognized.
A foreigner does not know Italian: what to do?
If the foreigner acting as the buyer does not know Italian, it is obviously necessary to take this into account and ask the translator/interpreter appointed in accordance with the notarial legislation to speak in the presence of the notary and the witnesses (if none of them know a foreign language). In addition, the Italian notarized deed must be followed by a translation into a foreign language, certified by an official translator (this may be the notary himself, if he knows the language), corresponding to the Italian text.
Who appoints the interpreter?
The Law on Notaries very precisely establishes that in the case of a foreigner, it is necessary to check whether the parties and the notary know the foreign language. If the notary does not know the foreign language spoken by the party, then the parties to the agreement themselves decide who will be the translator. The translator must take care of the translation of the notarial act, and also sign it together with two witnesses, the parties and the notary.
Its function is precisely to facilitate communication between the parties and the notary. Before starting the translation, the translator must take an oath to the notary that he/she will perform his/her duties in good faith, and this must be stated in the public notarial act.
What requirements should be placed on a translator?
To participate in a notarial transaction, a translator must meet the same requirements as witnesses. This is stated in the law on notaries. Thus, he must be an adult, an Italian citizen and must not be interested in the act. A foreigner can also act as a translator, but he must be a resident of Italy. Blind, deaf, dumb, relatives and namesake relatives of the notary and the parties in the degrees specified in Art. 28, spouses of one or the other, as well as those who do not know or do not know how to sign, do not have the right to translate. It is important for a notary to check the requirements established by the legislation on notaries.
Should witnesses know a foreign language?
Only one of the witnesses must know a foreign language if all parties can sign, that is, sign with their names and surnames. If the parties cannot sign, then both witnesses must know a foreign language. Of course, witnesses must always know Italian.
How to buy a house in Italy : a foreigner is not in Italy to conclude a contract
It may happen that a person interested in concluding a purchase and sale agreement cannot actually participate in its conclusion. In this case, the obstacle can be overcome by resorting to a power of attorney – a document by which a person grants other persons the authority to perform legal or material actions instead of a person deprived of the ability to perform them.
Let’s consider a case where a foreign citizen of France cannot be present in person when a notarial act is executed in Italy: she can issue a power of attorney, for example, to her husband to conclude a purchase and sale agreement. Thanks to the power of attorney, she will still be able to buy real estate.
What taxes must a foreigner pay?
The taxes that need to be paid in Italy depend on the property being purchased, the assets and the seller.
Taxes related to the purchase are the registration, mortgage and cadastral taxes. On the other hand, taxes related to the taxation of real estate are IMU and TASI.
If the seller is a private individual, the Consolidated Registration Tax Act provides for the purchaser to pay registration, cadastral and mortgage taxes. These are levied at a flat rate if the sales are subject to VAT, or at a pro rata rate of 9% if they are exempt from VAT. A reduced rate (pro rata 2%) applies if the purchase falls under the so-called “first home exemption”.
How to Buy a Home in Italy: First Home Benefits Available to Foreign Buyers
As mentioned in the previous paragraph, if the property being purchased is a “first home”, i.e. a home intended for primary residence, a reduced tax will be paid, the amount of which will depend on whether the purchase is made through a private individual, a developer or not:
- if you buy from a private individual or company after 4 years from the date of completion of the work, the registration tax is 2%, calculated on the cadastral value;
- If you buy from a developer within 4 years of completion of the work, you pay VAT calculated at a rate of 4%. Registration, mortgage and cadastral taxes are fixed.
What kind of property should a property be to receive tax benefits?
In order to be eligible for tax benefits provided by the legislator, not only the buyer but also the object of sale must meet several requirements. Lightweight real estate must meet certain requirements:
- they must be classified as “housing” and fall under categories A/1 and A/11
- they must not be luxury items (in the sense of Ministerial Decree 218/1969)
- they must be located in the municipality where the buyer lives or where he plans to move
The benefit also applies to adjacent properties such as basements, garages, sheds, attics, etc.
For this reason, the buyer must, within 18 months from the date of purchase, establish his new place of residence in the municipality where the relevant property is located, if he has not already done so.
In addition, he must not be the sole or joint owner of any other right of ownership, possession, usufruct or tenancy in another house purchased by him (or his spouse, if any).
How to Buy a House in Italy: Conclusion
It should be noted that foreigners who hold a residence permit or other valid document certifying that they are legal residents and are registered in the employment lists are entitled, under the same conditions as Italians, to public housing and a subsidized loan for the purchase or rental of their first home. Income tax deductions will therefore also apply to them if this is their first home.