Property purchase agreement and contracts in Italy

Once the potential buyer has selected the property he desires to purchase, the next step is to contact the seller to start negotiations or to formally draft what is known as the purchase proposal. The proposal is not legally binding, but instead is used to inform the seller of an interest in the purchase of the property and a willingness to sign a contract. It is common practice for the potential buyer to include a deposit between 5% – 10% of the asking price in a show of good faith. The seller has a specific time limit to accept the offer. If the offer is accepted, the seller is entitled to retain the deposit and subsequently signs the proposal. Once the proposal is signed it becomes legally binding. If the seller declines the offer, the deposit shall be returned.


Purchase proposals are seldomly used due to the fact that, at this stage, the potential buyer does not have sufficient information or legal documentation concerning the property or its ownership. The buyer commonly skips this step and insteads consults a lawyer to obtain legal advice on the purchase of the property.

The important key step in the process of purchasing a property in Italy is the preliminary contract (Compromesso). It is a private agreement stating the agreed sale price, the closing date, and the details of the property as specified in the land registry. It must always be signed prior to the completion of the final deed, and per Italian legislation, must be registered with the tax authorities. Registration fees are typically paid for by the buyer and the contract is registered by the real estate agent. This contract obliges both parties to sign the final deed before a notary, at which time the transfer of property ownership occurs. 

A deposit between 10% – 30% of the purchase price normally accompanies the preliminary contract. This down payment is in the form of a Caparra Penitenziale (penitential deposit), or more commonly, a Caparra Confirmatoria (confirmation deposit) and is used to safeguard both parties in case a default occurs prior to the completion of the sale. If the buyer is held in default, he will automatically lose the entirety of the deposit. If the seller defaults, he shall pay the buyer twice the amount of the received deposit. This amount may be higher if the buyer can show damages in excess of the deposit. However, in the case of a Caparra Penitenziale, the party that decides to withdraw from the agreement must only pay the amount agreed upon as a penitential deposit and cannot claim further damages. 


The last and mandatory step must take place before a notary. The notary is typically a professional chosen and paid for by the buyer. Notary fees are generally 1% of the purchase price; however, this may be higher for low-cost properties. Both parties, or a Special Power of Attorney representing the party, must be present in front of the notary at the signing of the notary deed. Italian law states that deeds must be drawn up in the Italian language. In the case that one of the parties does not speak Italian, a second notary deed may be drafted in the party’s native language. In this case, an interpreter is hired to assist in communication with the notary. The buyer may choose to also be represented by a bilingual attorney. According to Italian law, the notary must read the contract aloud in order to ascertain there are no misunderstandings and that all statements are valid and true. Once the deed is read and confirmed by both parties, the final deed is issued in three copies and signed by the two parties and the notary.

The final step is the transfer of the balance due to the seller. It is advisable that the balance is held in an escrow account by the Notary and all transfers are made from this account. This is a bonded client account allowing the notary to receive funds from the buyer for the payment of the property. Once all criteria set forth by the agreement are met, the seller receives the payment and the property is transferred to the purchaser. 



Our team is composed of the multifaceted professionals needed to facilitate your purchase of Italian real estate from beginning to end. Our real estate experts are knowledgeable of the local real estate markets and keep our clients up-to-date on current market trends and assist them in contacting an experienced and honest real estate agency in their desired region. Our team duly inspects all preliminary documents such as land register plans, energy rating certificates, and habitability certificates, provides translations, and advises our clients on the content. A summary of our findings is provided in a technical and due diligence report.  To further facilitate our clients, our legal team will draft and negotiate the preliminary contract and all conditions related to it, help negotiate a price, and draft a first offer. Finally, we will represent our client in front of a notary public to ensure their best interest is satisfied, and/or act on their behalf signing the final deed.