In partnership with: Kitchen Table Travel
We don’t need to extol the romantic virtues of owning your own home in Italy. As anyone who has opened Under the Tuscan Sun will tell you, much of the experience will be magical and life-changing, days filled with spontaneous dinner parties and grape harvests and passeggiate.
What we perhaps do need to flag, however, are the many pitfalls and complications you’ll have to navigate to get to this point. Since Frances Mayes penned her iconic book in 1996, setting up home in Italy has become easier in some ways and more complex in others. While it’s not quite as novel as it was 30 years ago, the layers of bureaucracy still often feel impenetrable to the first-time buyer.
Kitchen Table Travel is a small travel company which has recently pivoted to organize bespoke tours helping potential buyers bring their dream come true. To answer some of your most pressing questions about the ins and outs of choosing and buying your own place, Kitchen Table Travel has hired two Italian real estate attorneys, Claudia Bortolani and Eleonora Cerin. The professional duo are well-versed in the intricacies of Italian property law. Here’s what they had to say about some of your most pressing questions.
Do I need an Italian bank account to buy a place in Italy?
Interestingly, to buy a property in Italy you do not need an Italian bank account at the date of closing, which will always happen in front of an Italian notary. Notaries in Italy are public officials entrusted with the transfer formalities and some important verifications on the legal status of the property. They may also act as escrow agents. So, you will be able to transfer the proceeds for the acquisition to your notary’s dedicated bank account, and have the notary transfer the sum to the seller with absolute certainty. After the transfer, it’s generally good practice to open an Italian bank account for several reasons, but most importantly to be able to pay your utility bills online through a direct, automatic charge, so you don’t have to worry about them, especially if you reside abroad. While it is fairly simple to open a bank account when you reside in Italy, not all banks will willingly open accounts for foreign residents. Some banks may have specific account options tailored for non-residents or foreign individuals purchasing property in Italy, so it’s recommended that you research different banks and compare their offerings, fees and services. The assistance of a local counsel may be helpful to understand the bank’s requirements, documentation, and any specific procedures for opening an account as a foreign citizen.
How much should I budget for my home’s closing costs?
The closing costs associated with acquiring a property in Italy may vary depending on several factors, including the property’s value, location and specific circumstances of the transaction. Some common closing costs to consider include:
Notary fees in Italy are regulated by law and are generally calculated as a percentage of the property’s purchase price. They typically range from 1% to 3% of the property value, and vary depending on the complexity of the transaction and the specific notary involved.
Real estate agent fees:
If you are using a real estate agent, they charge a commission fee calculated as a percentage on the property price. The typical commission rate in Italy ranges from 2% to 4% of the purchase price, depending mainly on the agency and the business uses in the area.
Taxes and duties:
Various taxes and duties are applicable during the property acquisition process, including Value Added Tax (VAT) or Registration Tax (Imposta di Registro).
Legal and translation fees:
While not mandatory by law, it is highly recommended, especially for non-domestic, non Italian-speaking buyers, to seek the assistance of an attorney-at-law when involved in a real estate transaction in Italy. Legal fees can vary depending on the complexity of the case, but as a rough estimate, they can range from 4-5% of the property’s purchase price. Additionally, if you require translation services for documents, consider budgeting for this as well.
The property I’m interested in was acquired by the current owner by donation, or as a gift. Are there any issues with it?
When a property is gifted, potential legal complexities may emerge during subsequent sales unless 20 years have elapsed since the transfer. This is particularly pertinent in Italy, where specific close relatives are entitled to a minimum share of the deceased’s assets by law, unalterable even through a will. In contrast, the US allows testamentary freedom for property bequests.
If a disputed donation leaves the current owner unable to meet the claims of a legitimate heir, they might be forced to surrender the property without due compensation, especially if less than two decades have passed since the donation. This responsibility could extend to subsequent buyers, even without any familial ties to the original donor or the property's past. To mitigate such risks, potential property owners can opt for insurance coverage. However, if an “opposition to the donation” has been filed by legitimate heirs, triggering a warning to the donee and registering it in the Public Land Registries, the 20-year Statute of Limitations may not apply. Therefore, simply relying on the passage of 20 years might not be sufficient in such cases. Despite these challenges, awareness of available legal remedies can provide assurance when dealing with gifted properties.
What in the world is a cadastral value and how do I calculate that?
In Italy, the cadastral value (or valore catastale) is an estimate of the property’s value used for tax purposes and administrative procedures. It is determined by the Italian Cadastre (namely, Catasto Italiano), which is a public register of real estate properties. Keep in mind that the cadastral value is not necessarily an accurate reflection of the market value or sale price of a property. It is primarily used for tax assessment purposes, such as determining property taxes (IMU) and other administrative procedures. The calculation of the cadastral value in Italy is complex and involves multiple factors. It is generally based on the property’s location, size, quality, and other characteristics. The cadastral value is shown on the property certificate issued by the Italian Cadastre.
When you buy a home as an individual from another individual or in any case not subject to VAT, it is important to know the cadastral value as it is on this figure that the purchase taxes are calculated.
What are some other costs that I should anticipate? Utilities? Waste? Internet?
After you’ve become a homeowner in Italy, you’ll need to factor in mandatory expenses such as property taxes (IMU), varying based on property type, size, location and cadastral value. Additionally, waste disposal taxes are determined by property size and location. Utilities like electricity, gas, and water entail regular billing, while condominium properties require contributions toward shared amenities like building management, doorman services and common area maintenance. These expenses can be managed through the home banking service of your Italian bank account. Optional costs include internet and TV services, crucial if you have a remote alarm system and need to monitor house cameras.
About Kitchen Table Travel
For a full version of these answers, and many more, head over to kitchentabletravelco.com. Kitchen Table Travel is a small group tour company run by lifetime Italy enthusiasts Cat and Georgette Nelson. Having previously focused on food and wine experiences, the sisters are expanding their services to include real estate tours because they've realized there is a great need for clear and honest guidance from trustworthy sources. These tours for potential buyers are a customized experience for 5-8 people. The multi-day trip includes guiding guests around an area, to meet with locals and other expats, and to get expert advice at the moment of viewing a property.
To find out more about these tours, contact Cat and Georgette on firstname.lastname@example.org.