In Italy a property can be purchased from individuals or societies.
At the time of the purchase of the property, foreign and Italian citizens have the same right, but let's analyze all details.
The first aspect to consider is not all foreign people can buy a property in Italy.

To buy a property in Italy foreing people must have the following requirements :

- Foreigners staying in Italy. In this scenario is required a residence permit or a resident card.The same applies to family members of foreigners who have been staying in Italy and who have been stateless for less than three years.It is also required an Italian tax code.

- Foreigners not regularly staying in Italy. In this case buy a property is a bit more complicated because there must be an international treaty allowing the purchase. The international treaty to be applied must allow the principle of reciprocity. To verify the existence of a valid agreement, it is necessary to check the situation on the website of the Ministero Affari Esteri . In this case is also essential to have an Italian Tax Code.

- Person who is a Community citizen or a member of EEA countries.

In this case there are no limits to the purchase. The same applies to stateless persons who have been resident in Italy for more than three years.

Procedure to follow to buy a property in Italy.
Let's have a look now at what is the correct procedure we will follow to buy a property in Italy.

In particular:

- Purchase proposal.

- Conclusion of the preliminary sales contract.

- Notary sales deed.

Proposal of purchase

So when you decide to buy a property in Italy you have to submit a proposal of purchase.

The proposal is an irrevocable offer that includes the main terms of the transaction between seller and buyer.

In particular the following elements:

- Full name of both parties.

- Birthdate and place of birth.

- Description of the property

- Cadastral extremes

- Building year

- Urban planning compliance

- Habitability

- Price Agreed

- Payment methods

- Deposit amount.

The seller will accept or decline the offer.

Conclusion of preliminary sales contract
Once your proposal is accepted, the next step is a preliminary sales contract, with this agreement the buyer formally undertakes to buy the property. In fact, the contract usually provides for the payment of a confirmatory deposit.
The contract must have a mandatory written form. It must include all the conditions that both parties have agreed in the
preliminary proposal. It basically aims to force the parties to transfer ownership of the property at some time. However, there is no obligation to purchase.

Conclusion of the sale deed
The final contract of sale is the notarial deed. Act drawn up in the presence of a notary, who after reading the same and invited the parties to sign the deed, will make the ritual transcripts.

The notary, as a public official, is required to hand over the information relating to the sale to the competent state bodies and to the Land Registry Office for registration purposes.
The deed must be accompanied by a certified foreing language translation. The translated copy is not necessary if the foreing buyer declared to perfectly understand and read the Italian language. To buyer will be given the original copy of the deed.

What are the taxes related to a property purchase in Italy?
The taxes that must be payed are divided in two groups:
- The taxes related to the purchase : Registration tax or vat, mortgage, cadastral tax.
- Taxes related to property taxation: IMU and/or TASI.

Indirect taxes related to the purchase of a property in Italy:
The taxes to pay to the Financial Administration, related to the purchase of a property will vary according to some parameters (property purchased as a first home or not or as an instrumental building), the same also depends on the seller.
In particular, the real estate buyer must take care to verify whether the transferee is a private individual or a VAT taxable person (company in individual or corporate form).

If the seller is a private individual, the rules laid down by the Consolidated Text of the Registry Tax (TUR) apply, which provides for the payment to the buyer of the following indirect taxes:

Registry setting;

Set cadastral;

Mortgage taxes.

If the seller is a business
If, on the other hand, the seller is a business, at the price agreed between the parties it is also necessary to add the Value Added Tax (VAT) to be fulfilled according to the specific provisions in force in the matter, dictated by DPR no. 633/72.

Purchase of housing properties: registration tax
In application of the principle of alternatively between VAT and registration tax, for disposals of residential properties, made by private entities (not with a VAT number), the registration tax, as well as mortgage and cadastral taxes, apply to the following extent:

- Fixed (€. 200 each) in case of supplies subject to VAT;

- Proportional of 9% in the case of VAT-free disposals, or

- Proportional of 2% in case you can take advantage of the "first home"

benefits.

Purchase of residential properties: Vat rates
For the determination of the VAT rate to be paid, it should be pointed out that the disposals of residential properties (not having the characteristics of luxury dwellings) made by the construction companies are subject to VAT with the application of the 10% rate.
Indirect taxes related to the application of property taxes for the purchase of a home in Italy
A foreign individual that buys a house in Italy must know that in addition to the payment of indirect taxes on the purchase it is also required to pay capital taxes. These taxes are due simply because they have a real right to housing.
At present, the indirect taxes levied on the owner of the property are as follows:

- IMU: it is the only municipal tax payable by those who own a property, with the exception of main non-luxury dwellings, for which it is not due.

- TARI: it is the waste tax, paid by those who actually use the property for both onerous and free of charge.

The deadline for submitting the IMU declaration is 30 June of the year following the start date of possession/detention of the premises.

Of course, you will need the help of an experienced chartered accountant to manage these aspects.
Infact, if you decide to buy a house in Italy, and this your first house , you are entitled to some benefits.
These benefits can reduce the indirect taxes to pay when buying the house.
Foreign buyers who have the requirements can also take advantage of the first house benefits.

In particular at the time of purchase:

- Those who buy a house from a private seller, by a non-building or a building (or restructuring) company more than 4 years after the construction of the works, pays the registration tax of 2% on the cadastral value of the dwelling. In addition, mortgage and cadastral taxes in a fixed amount of € 50 each;

- Those who buy from a construction company , within 4 years of the construction of the works, pay VAT at 4%. While, register, mortgage and land registry taxes fixed for € 200 each.

Conditions to benefit of the first house benefit when you buy a house in Italy

To benefit from the concession linked to the purchase of the first home in Italy, it is necessary that the purchase concerns a property that:

- Must be classified as dwelling, and therefore, catastally classified between categories A/1 and A/11;

- It is not classified as "luxury" according to Ministerial Decree 218/1969;

- It is located in the municipality where the buyer has or, within 18 months, intends to transfer the residence.

The benefits can also be applied to the relevance of the dwelling.

However, with the limit of one for each of the cadastral categories C/2 (cellar or attic), C/6 (garage or box) and C/7 (canopy closed or open).

In addition to the characteristics of the property in order to benefit from the benefits, the buyer must:

- Within 18 months of purchase, undertake to establish residence in the territory of the Municipality where the property

to be purchased is located, if you do not already reside there.

- It is not the exclusive owner or in communion with the spouse of property rights, usufruct, use and dwelling of another dwelling in the territory of the Municipality where the property to be purchased stands.

- It does not have, throughout the national territory, property rights, usufruct, use, dwelling and bare property on another dwelling purchased by the same person or spouse. This is taking advantage of the first-home tax breaks that have followed each other over the years.

Both foreign citizens and emigrants abroad will be able to take advantage of the first home facilities. It must be specified that taxpayers who do not have Italian citizenship can buy first home with the facilities if the
requirements are met.

Irio Real Estate srls
via Europa, 10
83044 - Bisaccia (AV) - Campania

info@iriorealestate.it

+39 340 7467 800