Real Estate Legal Assistance in Milan
Milan, as the capital of Lombardy, is a dynamic and vibrant city renowned for its rich history and invaluable cultural heritage. With a population exceeding 1.3 million inhabitants, Milan serves as a global center and a prominent hub for key sectors such as fashion, design, finance, and commerce. Moreover, its strategic location, easy accessibility, and strong connections to other major European cities make it an attractive destination for both residents and investors.
- 1 Real Estate Legal Assistance in Milan
- 2 Milan is the key city in Italy for the real estate market
- 3 Investing in Italy: Milan's Real Estate
- 4 Discovering the luxury real estate market in Milan, Italy
- 5 Commercial real estate in Milan: the importance of services sector
- 6 Our comprehensive real estate services in Milan
- 7 General guidelines for real estate transactions in Italy
Milan is the key city in Italy for the real estate market
The Milanese real estate market, divided into numerous neighborhoods and suburbs, is currently thriving. Real estate properties are experiencing a significant increase in economic value, steadily rising year after year due to the continuous demand for both sale and rental apartments. According to collected data, the average price for purchasing a property in Milan is 5,340 €/m², indicating a clear increase of 68.7% compared to the data collected in July 2015, when the average price was 3,671 €/m². These significant data points reflect the excellent health of Milan’s real estate market. In fact, within the OMI areas (areas generally homogeneous in terms of property values), the average asking prices have risen by approximately 39.1% from 2015 to the present day. Areas such as the Center, Arco della Pace, Arena, Pagano, Porta Genova, and Ticinese have higher-than-average property costs per square meter. Taking a closer look, specific areas like the North Semicenter have experienced a notable increase of +49.86% in asking prices and a +25.28% increment in transaction prices.
The city’s real estate market also serves as a driving force for investment, accounting for 42% of all investments made within the city limits, totaling 5.2 billion euros in 2022 alone. Among these investments, 75% are directed towards the rental of spaces designated for offices and coworking.
Real estate in Milan: a solid market
Despite inflation, the energy crisis, and global conflicts, Milan’s real estate market continues to grow unabated. It has always been in a state of flux, starting from the construction of new homes in the post-World War II era until the 1970s (with nearly 60% of homes built during this period). The market has since continued with contemporary, innovative and environmentally conscious constructions that enhance the quality of life. Even during the COVID-19 pandemic, the market only experienced a slight dip in average prices for purchase before resuming its upward trajectory. Milan is a city poised for the future, promoting a high quality of life and serving as a reference point for investors and residents alike.
Investing in Italy: Milan's Real Estate
We find ourselves in a period of strong uncertainty, where the global real estate market is still grappling to regain its usual momentum. Influences such as rising interest rates, conflicts, and inflation are hindrances to its recovery. In this unfavorable climate, most investors prefer to focus on liquid and well-established markets. One of those markets is the real estate in Milan.
Although Milan is currently experiencing a natural slowdown, it continues to display significant growth, fueled by a resilient economy and increasing demand. The city offers a diverse range of opportunities, from historic properties in the city center to modern buildings in the surrounding areas. For investors seeking lucrative prospects, Milan's real estate market provides stable rental yields and the potential for capital appreciation. In fact, Milan ranks among the top 10 European cities for real estate investment. However, this steady growth is not solely attributed to its strong economy and influence in the fashion and finance fields.
Various key factors contribute to the thriving real estate market in Milan. Notably, an excellent transportation infrastructure, internationally renowned educational institutions, cultural attractions, vibrant nightlife and a remarkable culinary scene all play a role. These factors, among others, attract foreigners who wish to reside and invest in the city. Moreover, Milan's focus on the service sector is noteworthy, with a higher share (53.3%) compared to the national average (36.3%). Additionally, the city boasts an employment rate that covers almost 60% of its working population, a significant 11% higher than the national average.
Given these favorable conditions, it is clear why real estate funds have emerged as a driving force behind global investment plans, accounting for 42% of all investments made in the city. This share amounts to 5.2 billion euros in 2022 alone. Among these investments, 75% are directed towards the rental of office spaces and co-working facilities. Despite the challenges faced, Milan's overall appeal and growth potential continue to make it an attractive option for foreign real estate investors.
Considering Milan's booming economy and attractive rental yields, why not invest in buying a property in this dynamic city?
Milan is a city that offers numerous opportunities for investors, and there are several compelling reasons to support this claim:
- Lucrative Rental Yields
Milan's dynamic job market and renowned universities, ranking among the best in Italy and Europe, ensure high rental returns for investors.
- Thriving Real Estate Market
Unlike some saturated markets that have reached their peak, Milan's real estate market continues to grow. The outskirts of the city and lesser-explored neighborhoods are witnessing increased interest, leading to consistent upward price trends. Investing in Milan now has the potential to yield substantial rewards in the future.
- Robust Resale Market
Properties available for sale in Milan tend to spend a short time on the market due to high demand and limited supply. This indicates a strong resale market and signifies the desirability of properties in the city.
- Infrastructure Advancements
Milan is experiencing continuous growth with ongoing infrastructure developments, including regular improvements to public transportation, roads, and amenities. This enhances the city's overall appeal and convenience for residents and investors alike.
- Diverse Options
Milan offers a diverse range of real estate options catering to various investment budgets. Whether it's luxurious penthouses with breathtaking views or cozy apartments in bohemian neighborhoods, there is something for every investor's preference.
- Cultural and Touristic Significance
Milan is more than just a hub for business and finance. It is a vibrant center for fashion and culture, hosting prestigious events like Milan Fashion Week and a wide array of citywide cultural festivities.
- Economic Reference Point
Milan, known as the financial hub of Italy, is home to the Italian Stock Exchange and hosts numerous nationally recognized banks. Its vibrant and bustling economy attracts a diverse range of professionals and businessmen, leading to a consistently high demand for both residential and commercial spaces.
Discovering the luxury real estate market in Milan, Italy
The value of luxury properties in Milan has seen a remarkable 25% increase in the second half of 2023, reaching a total value of 5.8 billion euros. The demand for high-end accommodations in Milan surpasses the supply, leading to a decrease in the time it takes to sell luxury properties. Currently, these properties remain on the market for an average of two to four months, even less than the period before the pandemic.
Milan offers the perfect blend of urban conveniences and an exclusive ambiance, making it a highly sought-after residential destination in northern Italy. Its strategic location is a major advantage, with excellent connections to major European cities through international flights. Additionally, Milan is less than two hours away by car from the Mediterranean Sea and just one hour from the picturesque snow-capped Alps, making it a truly desirable city. Given its modern appeal and privileged location, Milan and its real estate market remains a top choice for luxury property acquisitions. Many foreign investors are opting to live in Milan and invest in luxury apartments, partially due to the tax incentives offered to newcomers. These incentives allow them to pay a flat tax of €100,000 ($108,570) on income earned abroad or be exempt from taxes on up to 70% of their income for at least five years.
Luxury Real Estate in Milan: which are the best zone to buy a property?
When it comes to luxury apartments in Milan, the best options can be found in the heart of the historic center, the Fashion District with its luxurious designer boutiques, and San Babila, which is adjacent to the renowned Cathedral of Milan. In terms of prices, the average value for luxury real estate stands at 12,620 €/m².There is also growing interest in the new urban district called "CityLife", located in the former exhibition center area of the city. This luxury neighborhood features high-end designer apartments equipped with cutting-edge technologies and ecological standards. The buildings are designed by renowned architects such as Daniel Libeskind, Zaha Hadid and Arata Isozaki, and include amenities like a pool, padel facilities and a shopping center. Prices in this neighborhood can also reach up to 15,000 €/m².
Furthermore, the rest of the city is undergoing a comprehensive recovery program aimed at creating new high-end apartments and adding value through urban redevelopment. For example, the former disused railway hub near Porta Romana is set to be transformed into an Olympic Village in preparation for the 2026 Winter Olympic Games. Renzo Piano, the Italian architect behind the Shard in London, is also working on the new Bovisa-Goccia campus of the Polytechnic University of Milan. Additionally, the city is constructing what claims to be the densest network of cycling lanes among all European cities.
Commercial real estate in Milan: the importance of services sector
Milan's economy is primarily driven by the service sector. This sector holds significant prominence among the city's workforce, accounting for 53.3% compared to the national average of 36%. This emphasis on services makes Milan a city dedicated to work and the office lifestyle. Consequently, investments in commercial properties and office spaces have consistently exhibited continuous growth, with only minor fluctuations. In the first quarter of 2023, the non-residential real estate market contributed €300 million to the economy, solidifying its position as the top asset in terms of investment volumes. The market's overall value reached approximately €3.9 billion, marking a significant 33% increase compared to 2021. Both foreign and local investors perceive this segment of the real estate market as robust and secure, recognizing its potential value in the short, medium, and long term. Despite the temporary slowdown caused by the national pandemic situation, the demand for office spaces has resumed its upward trajectory. Many areas are fully leased, and the construction of new workplace structures is already underway.
Data and statistics about commercial real estate in Milan, Italy
Official data released by industry agencies reveals an increase in the value of commercial properties compared to 2021. The Brera area, located in the heart of the historical center, stands out as the prime location for purchasing properties used as offices, with prices reaching approximately €7,500 per square meter. These figures significantly surpass the Milanese average, which stands at around €3,300 per square meter.
Although the investment market, in terms of individual transactions, has experienced a recent slowdown, Milan continues to account for approximately 60% of the office investment volume in Italy. The semi-annual volumes have reached 1.2 billion euros. Investor confidence in the city remains strong, driven by a steady increase in absorption rates and rising rental prices.
Moreover, due to the ongoing and growing demand, exciting new projects for the construction of office spaces are already underway in Milan. These projects embrace innovative and modern concepts, incorporating technology and sustainability. As a result, all these new buildings will be ESG certified, and there will also be a greater focus on updating existing structures to meet ESG standards.
Our comprehensive real estate services in Milan
Italy Law Firm Milan offers the services of bilingual legal consultants specialized in Italian real estate law. We will provide assistance throughout the entire process of buying or selling a property, guiding you through the complexities of the Italian legal system. By engaging our services, you will have dedicated professionals working exclusively in your best interests, resulting in significant cost savings. Additionally, we will identify any potential issues and handle all legal clauses in the contracts, ensuring comprehensive management. This will minimize the need for travel and eliminate the requirement for dual-language documentation. Our legal services cover a wide range of aspects, including:
- Commercial Law
- Real Estate Inheritance Laws
- Due Diligence Law for Real Estate Transactions
- Compliance with Urban Planning
- Consultancy on Italian Tax and Nationality Laws
In the intricate realm of Italian law, securing a trustworthy lawyer is essential for a successful and cost-effective transaction. Italy Law Firm Milan presents itself as your legal representative in Milan, dedicated to serving your best interests and ensuring smooth negotiations. In any real estate transaction, there are specific aspects that buyers seek to investigate. These aspects pertain to the property's legal and technical features, including its address, year of construction, property titles, third-party rights, construction permits, certificates, registry entries and technical conditions.
Conducting these investigations can often be time-consuming and inconclusive. However, Italy Law Firm Milan provides you with the opportunity to entrust these investigations to a team of highly competent professionals who are solely dedicated to working in your best interest.
ILF helps you in the commercial real estate market in Milan
In Italy, the legal and tax framework for real estate investors is generally favorable. Various entities, including companies, funds, and individuals, can own commercial properties. When it comes to individual sellers, they typically face a relatively low capital gains tax, which falls within the range of 10% to 15%.
When it comes to commercial real estate transactions, Italy Law Firm Milan provides comprehensive guidance every step of the way. In many cases, buyers express interest in acquiring the entire existing company alongside the property. Our expertise is at your disposal throughout the process, ensuring that you understand the nature of such transactions, which essentially involve the sale of a corporation.
Indeed, with the purchase, the buyer must be aware that they will assume all existing contracts that remain in effect. This grants the counterparty the option to terminate the contract with just cause within three months of being notified of the company's sale. These legal safeguards are in place to uphold job security for all employees under the new ownership. During this critical phase, Italy Law Firm Milan can conduct a thorough analysis of the company's financial stability, shareholder rights, assets, and liabilities. This investigation will provide you with all the necessary information to evaluate the feasibility and potential benefits of proceeding with the transaction.
Legal Support in inheritance laws
Italy Law Firm Milan is also dedicated to assisting you with inheritance laws, ensuring protection and reliability in navigating the intricate procedures of Italian succession and facilitating property transfers. When it comes to inheriting an Italian property as a foreign heir, it is crucial not only to engage a lawyer specialized in wills and successions but also a knowledgeable professional in Italian taxation.
The process involves potential taxation on inheritances and gifts in Italy, making it necessary for foreign heirs to obtain an Italian tax code, open an Italian bank account, and rely on a competent legal representative who can facilitate the smooth transfer of property. At Italy Law Firm Milan, we understand the importance of these steps and are well-equipped to guide you through the entire process, providing the necessary expertise to ensure a seamless transfer of assets.
General guidelines for real estate transactions in Italy
Italy Law Firm Milan, along with its team of qualified lawyers, possesses extensive experience in all aspects of real estate sales. We specialize in negotiating complex real estate transactions and can provide legal support throughout the entire process leading up to the final sale of the property. Our expertise extends to multiple languages, including Italian, English, German, Russian, Spanish, and Greek.
In Italy, the process of buying or selling a property typically involves three phases:
During this initial phase, the interested buyer creates an "Irrevocable Purchase Proposal" or Offer of Sale. The objective is to temporarily remove the property from the market, and a small percentage of the proposed purchase price is attached to the offer in the form of a check. This check is held in deposit by the Real Estate Agency or delivered to the seller. It is crucial to carefully consider the potential legal implications before signing. Italy Law Firm Milan provides services that include negotiating the price and commissions of the Estate Agent, drafting an Offer of Sale, collecting signatures from both the seller and the buyer, and, if necessary, arranging a meeting with the seller.
Preliminary sale contract
This phase involves a formal purchase agreement, although it does not permanently transfer the property. Thorough legal investigations regarding the property are conducted during this stage. Italy Law Firm Milan's team of legal experts in Milan can carry out these investigations diligently and in great detail through a Due Diligence process that includes legal and technical assessments to ensure compliance with Italian regulations. Upon signing the preliminary contract, Real Estate Agencies are entitled to receive their commissions. Registration with the Italian Revenue Agency is mandatory at this stage, along with an advance payment of state taxes, which will be later deducted from the total purchase amount. Additionally, a technical report is prepared by a qualified expert.
Final Purchase Deed
In this final phase, the presence of a public notary is required in Italy to authorize and legalize the purchase deed. Representation of the two parties through a power of attorney is also permitted, granting them the right to sign the agreement. This practice is also applicable in the previous two phases. During the Preliminary Agreement and Final Purchase Deed phases, Italy Law Firm Milan in Milan serves as a consultant on the optimal legal ownership structure to minimize tax and ancillary issues. This includes obtaining a Tax code, evaluating Italian tax burdens and associated expenses, drafting necessary contracts, and resolving any documentary issues. The buyer is kept informed of any issues found in the documentation, along with recommendations for further investigation.
The ILF Milan team handles title defects, complex planning issues, and engages in prolonged negotiations if required. Our services also encompass assistance in opening an Italian bank account, arranging buildings and contents insurance, and supervising the finalization of the property purchase through the signing of the Deed of Sale ("Deed") in the presence of an Italian Public Notary. We ensure the registration of the buyer's title at the Italian Land Registry, providing comprehensive support throughout the entire acquisition process.