Most frequently asked questions when buying a house - Luxury Law
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Most frequently asked questions when buying a house

Luxury Law, though this article, aims to answer the most common questions about buying a house. We have summarized some of the most frequently asked questions our clients typically have before engaging our law firm.

How to buy property in Italy process

Very often, we find ourselves explaining to our clients that purchasing a property involves several key stages. Before providing our advice, we always ask whether they have already negotiated the price and made an offer. This question is crucial, as involving a lawyer from the very first interaction with the seller and/or real estate agent can be highly beneficial.

Therefore, the first step in purchasing a home in Italy begins with negoziations!

The second crucial step is the due diligence process, which includes verifying title deeds, identifying any encumbrances, checking for unauthorized constructions, and reviewing planning permissions. These are just a few of the essential aspects your lawyer must assess before submitting a formal offer to the seller.

Once your lawyer has completed the initial due diligence, you are ready to make an offer. This is a crucial step, as your offer will serve as a binding agreement, much like a preliminary contract. That’s why it’s essential to be extremely careful about what you are signing when submitting a formal offer! Read this article if you wish to now more about the due diligence process.

When you make an offer, you typically pay a small deposit, usually around 10% of the purchase price. This deposit is generally held by the real estate agent or another intermediary, unless it is paid directly to the owner. However, with our legal assistance, we always advise against making any payments unless the transaction is secure. In most cases, if you engage our law firm, the deposit is not paid to the agency or the owner but held in a way that ensures the funds can be safely returned to you in case anything falls through, minimizing any financial risk for the buyer.

Understanding legal terminology is crucial when buying a property, as even small differences in wording can lead to significant legal consequences. A clear example of this is the distinction between a deposit referred to as “Acconto” and one called “Caparra.” While they may seem similar, their legal implications in case of a contract breach are completely different. Be fully aware of the purpose of your payment to the vendor, as it can determine whether you have the right to recover your money or face financial loss. What may appear to be a simple detail could, in reality, make all the difference.

Once you have paid your deposit, several scenarios may unfold depending on the terms of the preliminary agreement signed with the vendor. It is challenging to summarize all the possible situations in a single article, as each case can present unique complexities.

Before finalizing your purchase, you must contact a Notary, who is selected and paid by the buyer. The Notary will request all relevant property documents from the vendor and will draft the final deed of sale.

Once the contract is ready, both the buyer and the vendor will sign the public deed before the Notary. The Notary will then register the sale at the Revenue Office.

A certified copy of the deed is typically issued within one month.

How much is the cost of a lawyer for closing on a house?

The cost of legal assistance for closing on a house can be agreed upon in writing between the client and the lawyer, allowing both parties to determine a fair fee for the service.

However, if no specific agreement is reached, legal fees in Italy are regulated by official parameters established by law.

Some key factors influencing a lawyer’s fee include:

  • Urgency of the matter
  • Complexity and importance of the legal work
  • Value of the transaction (for property sales, this is typically based on the purchase price)

Additionally, lawyers in Italy apply a mandatory 15% charge for overhead expenses, along with any documented costs incurred during the process.

To provide a clearer idea of average legal fees, below are the official parameters set by law for extra-judicial work:

  • €284,00 if the value of the case is between €0 and €1,100,00;
  • €1,276.00 if the value of the case is between €1,100.01 and €5,200.00;
  • €1.985,00 if the value of the case is between €5,200.01 and €26,000.00;
  • €2,410.00 if the value of the case is between €26,000.01 and €52,000.00;
  • €4.536,00 if the value of the case is between €52,000.01 and €260,000.00;
  • €6.164,00 if the value of the case is in between €260,000.01 and €520,000.00 euro.

If the value of the transaction exceeds €520,000.00, an additional percentage is typically applied on top of the standard costs.

That said, a lawyer may provide you with a higher or lower estimate based on the specifics of your case. The figures mentioned above are meant to give you a general idea of potential legal fees.

If no specific fee arrangement has been made, a lawyer is legally entitled to issue an invoice based on the official parameters set by law.

Buying a House in Italy as a Foreigner: What You Need to Know

One of the most common questions we receive is whether the process of buying a house in Italy is different for foreigners compared to Italian citizens. Many assume there are significant differences, but in reality, the process is largely the same. However, there are key aspects that international buyers should be aware of to avoid complications and optimize their investment.

Key Considerations for Foreign Buyers

✅ Declaring Residency for Tax Benefits
If you plan to move to Italy, it is beneficial to declare your residency in the deed of purchase. Doing so can significantly reduce your tax burden, as first-time home buyers who establish residency within 18 months of purchase benefit from lower property taxes. Additionally, if this is your only property in Italy, you may be exempt from certain municipal taxes, such as IMU and TASI.

✅ Notary Requirements & Language Barriers
Italian law requires that all buyers fully understand the content of the final deed of sale before signing. If you do not speak fluent Italian, you must have a translator present during the signing. However, it’s important to note that a translator only translates the document word for word and does not explain its implications.
Many of our clients prefer to grant us Power of Attorney, allowing us to handle the process on their behalf and ensure every detail is legally sound.

✅ Obtaining an Italian Tax Code (Codice Fiscale)
Every foreign buyer needs an Italian tax identification number, known as a Codice Fiscale. This is similar to a Social Security Number or National Insurance Number and is essential for signing contracts, paying taxes, and opening a bank account in Italy. You can obtain it:

  • At the Italian Embassy or Consulate in your home country (before arriving in Italy).
  • At the Agenzia delle Entrate (Italian Revenue Office) once you are in Italy.
  • Through your lawyer, who can assist you in obtaining it remotely by guiding you through a simple form to complete and sign.

This ensures a hassle-free process, allowing you to focus on your property purchase with peace of mind.

How Much Does It Cost to Buy a House in Italy?

When purchasing a property in Italy, the purchase price is not the only cost to consider. There are several additional expenses that are exclusively borne by the buyer:

Upfront Costs When Buying a Property in Italy

✅ Property Taxes – Depending on whether you qualify for tax benefits (e.g., first-time homebuyer or resident status).
✅ Notary Fees – These cover both the Notary’s professional fee and mandatory property-related taxes, such as land registry and cadastral taxes.
✅ Real Estate Agent Fees – If you purchase through an agency or broker, expect to pay around 3% of the purchase price (both buyer and seller contribute to this cost).
✅ Translation Costs – If you do not speak Italian fluently, you’ll need an official translator for the final contract.
✅ Geometra (Surveyor) Fees – Costs vary depending on the property’s size and the necessary due diligence.
✅ Legal Fees – If you hire a lawyer to assist you throughout the buying process, this will be an additional cost. See details above.

Annual Property Taxes in Italy: What You Need to Know

As a homeowner in Italy, you are required to pay annual property taxes, which vary based on property type, residency status, and municipal regulations. Some municipalities allow these taxes to be split into multiple payments throughout the year, with specific due dates.

Main Property Taxes in Italy

✅ IMU (Imposta Municipale Unica) – A property tax applicable to second homes and investment properties. Primary residences (if you have residency) are exempt.
✅ TARI (Tassa Rifiuti) – A waste collection tax that every homeowner must pay. The amount depends on the property’s size or the number of occupants.
✅ TASI (Tributo per i Servizi Indivisibili) – A municipal tax that helps cover local services, such as road maintenance and street lighting.

Can You Reduce Property Taxes?

🏡 Yes! If you establish residency in the property and declare it as your primary home, you are exempt from paying IMU and TASI, significantly lowering your annual tax burden.

💡 Still Have Questions? Our legal experts are here to help! Contact us at info@luxury-law.com for personalized advice.

Why you need a lawyer for a home purchase? – Click here!

 

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