Italian real estate attorneys: legal assistance for purchasing properties
- 1 Trust our law firm and protect yourself using our expertise of Italian property laws
- 2 The role of the real estate agent in the Italian market
- 3 The role of the Notary in the Italian system
- 4 The Italian commercial real estate market: we know how does it works
- 5 The Italian commercial real estate market for Investors
- 6 Heir property laws in Italy
- 7 ILF: an Italian tax lawyer for all your real estate affairs
Trust our law firm and protect yourself using our expertise of Italian property laws
Purchasing a property is a momentous life event and often an expensive investment. Using the property for commercial purposes and generating a profit adds to the challenge. When buying a property in Italy, it is highly advisable to contact a qualified, bilingual legal advisor proficient in Italian law and knowledgeable about the real estate market.
Your Italian real estate attorney could save you money in many ways, be it by negotiating better terms, discovering unresolved historical issues with a property, avoiding penalties due on an existing property and any nasty surprises in legal clauses, buried in contracts, just to name a few.
If you have landed on these pages you may also be wondering: where can I find my lawyer in Italy?
Italian real estate lawyers: start with a free consultation
Here at ILF we have got the best Italian legal advisors, here to assist in navigating the difficulties that foreign buyers often encounter due to the difference in legal systems and language barriers, and to inform them of any potential risk factors.Unlike other professionals involved in the real estate process, it is our role as your Italian lawyer to truly act in your best interests and at ILF we genuinely care about our clients.
Thanks to a specific power of attorney (procura speciale), the Italian real estate advisor may represent foreign buyers and execute all the purchase contracts on their behalf. Buying a property with an Italian representative is a huge benefit in terms of maximizing the costs (the buyers would not be obliged to travel to Italy every time a signature is needed). In addition, being represented with a Power of Attorney would avoid the Notary to draft the final purchase deed in two languages, pay two witnesses and pay a translator. The Power of Attorney can be signed by the non resident buyer in his country of origin in front of a local Notary. This POA will then need to be apostilled.
The attorney does all the legal work on the client’s behalf without the need of the client to be physically present. This is especially useful when the person does not speak Italian or when he/she cannot be present in front of an Italian notary for the property sale.
How can my lawyer in Italy help me?
There are many situations for which a lawyer is needed, here are a few examples:
- to understand and correctly apply the business laws in Italy – in case you are going to make your investment profitable
- to be up-to-date about property inheritance laws in Italy
- to know everything about Italian citizenship law.
- to perform a legal due diligence of the property to verify whether there are mortgages pending/any problems within the original purchase deed or to verify the financial status of the Italian seller
- to verify whether the property complies with the official Urban Plan as deposited in the local Italian Municipality and, if there are irregularities, to understand if they are fixable and the penalties to pay.
- to advise you on italian tax law and italy nationality law
Your Free Consultation for Buying a Property
There are different types of commercial properties allowed for by Italian law, including leisure real estate, industrial properties, office and commercial spaces, and retail real estate. The valuation of commercial properties is determined by the average market value of similar properties, expected generated income, the value of the property (per metro quadro – square meter), and by the property’s location and commercial size.
We are pleased to offer a free consultation service for anyone interested in buying properties in Italy. Our team of experienced professionals will guide you through the mandatory aspects of purchasing a property in Italy, ensuring that you have all the information you need to make an informed decision. We understand that buying a property in a foreign country can be daunting, and Italy has a bureaucratic system that can sometimes scare people. But with our expert support and guidance, we can help you to avoid common mistakes and expensive unexpected penalties.
Our ILF team is composed of all the professionals you will need to secure a real estate transaction in compliance with the Italian technical and legal standards including: attorneys, surveyors, accountants and notaries.
During the consultation, we will discuss the different types of properties available in Italy, the legal requirements for purchasing a property, and any potential issues that may arise during the process.
Our goal is to make all of the process as smooth and stress-free as possible.
To schedule your free consultation, simply fill out the form on our website or give us a call. We look forward to hearing from you and helping you make your Italian property ownership dreams a reality!
Download a free template of an Italian Real Estate Purchase Deed
The role of the real estate agent in the Italian market
The most effective way to find a desirable property without wasting valuable time and money is to work with an Italian real estate agent. Real estate agents and agencies are licensed, qualified, and registered with the local Chamber of Commerce. They are usually paid a commission called Provvigione, which is generally between 2.5% and 3% of the purchase price and is to be paid by both the buyer and the seller (unless the parties agree otherwise). Frequently the purchaser signs standard terms of engagement detailing the agent’s fees, the duration of the mandate, and potential exclusivity. In addition, contracts may provide for a “clientele indemnity” in case of termination of the agreement by the principal without any material default on the part of the appointed agent. All documents should be carefully evaluated before signing, particularly due to the fact that such documents are usually in Italian. Our real estate lawyers free consultation will give you the reassurance that you have someone by your side that you can trust to make sure what you are signing is in your best interests and keeps you well-protected.
According to art. 1754 Italian Civil Code Italian Real Estate Agents are entitled to receive their fees once an offer has been accepted whether or not the buyer finalizes the purchase. This means that a foreign buyer needs to be extremely careful in negotiating all the terms and conditions with the Agent before signing a purchase offer: an Italian attorney may absolutely be of help to negotiate with the real estate agent according to Italian law and customs.
Art. 1754 Italian Civil code textually says “A mediator (1) is the one who puts two or more parties in contact for the finalization of a deal(2), without being bound to any of them by relationships of collaboration, dependence or representation(3)
- The mediator must be registered in a special register in order to be able to exercise his activity and this even in the case of occasional exercise, under penalty of administrative sanctions and the obligation to return the commission;
- It should be noted that this profession represents one of the rare cases in which the Regulator chooses to dictate a subjective definition, focused on the party and not on the contract (see 1936, 2094 of the Italian Civil Code). This has opened the question of whether or not it is a contract and, consequently, whether the right to commission (1755 of the civil code) arises from the mere fact that the parties reach the stipulation thanks to his initiative or whether it is necessary that at least one of them give the assignment.
- The mediator must be impartial: even if he receives an assignment from one of the parties, he does not undertake to promote the conclusion of the contract on his behalf. This distinguishes the mediator from the agent (1742 of the civil code) and from the employee (2094 of the civil code).
Once the prospective buyer has chosen the property to purchase, the first step is to contact the seller to make an offer and enter into negotiations. This offer is not legally binding but is used to indicate the offer price, the amount of time desired to close, and to specify the terms of the transaction, including whether it would be subject to financing. The purchase proposal is binding once both parties sign. At this time, the seller must provide the following documents:
- Energy rating certificate (APE – attestato di prestazione energetica) summarizing characteristics of the energy systems in the building. This document is issued by an architect, surveyor, or engineer.
- Land registry certificate – maintained by Agenzia del Territorio – providing information on deeds of transfer of ownership, existing mortgages, and other property rights to ensure the legal compliance of the deal and realization of the full property rights.
- Certificate of habitability (Certificato di agibilità) confirming the building is fit for occupancy.
Planning permission building certificate (to be issued after 1967) testifying it was built in accordance with Italian law.
Do I need an Italian tax lawyer?
You will need to understand the taxes you pay when purchasing an Italian property as a non-resident.
Property taxation for vendite immobiliari is affected by many factors:
- as a non-resident if you are not planning to move your primary residency to Italy, you will be not able to benefit from the 2% tax deduction;
- the legal nature of the seller is also a parameter to calculate purchase taxation in Italy. Below you will find a sample of the applicable taxes:
|Seller||VAT||Purchase Tax||Stamp Duty||Land Register Tax|
|Individual||Not applicable||9%||50 euro||50 euro|
|Companies VAT Exempt||Not applicable||9%||50 euro||50 euro|
|Company with VAT||10% (If it is classified as luxury: 22%)||200 euro||200 euro||200 euro|
What happens when the offer is accepted
The prospective buyer will generally carry out due diligence investigations on the property to establish the property from both a legal and technical point of view (address, year built, ownership titles, third party rights and burdens, building permits, certificates, registry entries, and technical state of the real estate unit). Such research should be conducted with the assistance of third-party experts. When purchasing a property from a company, an analysis on the company’s solvency status should also be completed at this stage.
After an offer has been accepted, the parties enter into a preliminary contract (contratto preliminare) to negotiate the terms of the future deed of sale.
Italian Civil Code Preliminary Contract definition:
Art. 1351 says that “ a Preliminary contract (1) [art. 2932] is void [art. 1421] if it is not made in the same form that the law prescribes for the final contract (2). Notes:
- The preliminary contract is one by which the parties commit themselves to the conclusion of a subsequent, final contract, the essential content of which the former must already provide. The preliminary may be bilateral (if both parties commit themselves) or unilateral (if the commitment is made by only one). It is not to be confused with the improper preliminary, a contract that is already final but which the parties undertake to enter into in the form required by law: the distinction relates to the willingness to postpone or not to postpone the proper effects of the contract. The Italian law provides a special remedy for the case of non-performance of the preliminary, namely, the possibility of obtaining a constitutive judgment (see art 2932 Italian Civil Code), a remedy that is in addition to the traditional case of termination for non-performance.
- The Italian jurisprudence on the subject of preliminaries was enriched by Decree Law No. 669 of December 31, 1996, converted into Law No. 30 of February 28, 1997, which introduced the obligation of transcription for preliminaries (resulting from a public deed or from a private deed with a notarized or judicially ascertained signature) having as their object the purchase of a property.
The role of the Notary in the Italian system
The final step is the signing of the deed of sale (rogito) before a notary, typically chosen by the real estate agent or attorney representing the buyer. The notary fees, commonly paid by the buyer, usually amount to 1% of the purchase price. It is mandatory that the seller and buyer, or a Power of Attorney representing the party, be present at the notary’s office for the signing of the notary deed. By law, the notary reads the contract aloud, so as to ascertain that the statements made are legitimate and that there are no misunderstandings between the parties. Once read and confirmed, the contract is signed in three copies by both parties and by the notary. The seller receives the remaining purchase amount from the buyer, generally through an established Notary’s escrow account. At this point, the property ownership is transferred.
The notary requires mandatorily several documents for the deeds of sale
- Planning permission building certificate issued after 1967
- Certificate of habitability (Certificato di agibilità)
- An energy rating certificate (APE – Attestato di prestazione energetica)
Failure to provide the above documents affects the validity of the deed of sale and prevents its completion.
The Italian commercial real estate market: we know how does it works
Due diligence for Merger and Acquisition services
When it comes to commercial real estate, purchasers may have interest in buying the property’s former managing company in addition to the property itself. It is important to emphasize that in these cases the sale is not a property sale, but a corporate one. The sale of a company includes all the assets, including non-personal contracts, even if they are not explicitly described, unless excluded by the buyer. The counterparty in each contract has the possibility to withdraw from it within 3 months of the company sale’s notification date, and in presence of a just reason for withdrawal. The law protects the right of employees to keep their jobs even with a new owner of the company.
In this type of purchase, due diligence is also necessary and may include an analysis of the company’s solvency, shareholders’ rights, assets and liabilities. The investigation is to determine the company’s ownership and ascertain the existence of any parties who might possibly hold rights over the given property. The company’s recent balance sheets and income statements should be also examined in order to provide information about the corporate capitalization, reliability and solvency index of the company. The prospective purchaser, after analyzing the financial capacity of the company, may once again evaluate the benefits of signing the deal.
The Italian commercial real estate market for Investors
The market here offers interesting opportunities not only for companies, but also for investors. Italy has a diversified economy with major business hubs in cities like Milan, Rome, Turin, Florence and Bologna. Commercial properties like office spaces, retail units, industrial warehouses and hotels have good rental yields and capital appreciation potential.
Corporate properties including:
Grade A offices in central business districts and suburban office parks are in demand. Strong interest from tech companies, co-working operators and business service firms is driving office rents up, especially in Milan and Rome. Well-located high street retail properties, especially in tourist destinations, also provide good returns. Logistics properties near airports and highways are sought after due to the growth of e-commerce.
Capital gains tax on property sales
The legal and tax framework in Italy is generally favorable for real estate investors. Commercial properties can be owned by corporations, funds and individuals. Capital gains tax on property sales is low at 10-15% if the seller is an individual. REITs, real estate and property funds allow investors to gain exposure to commercial assets with lower capital outlay. Non-EU investors can set up an Italian company to purchase commercial property.
Heir property laws in Italy
Italian inheritance laws offer some protection to family members, limiting the right of the testator (the person who makes a will and whose estate is inherited) to dispose of their own assets. Italian inheritance laws provide protection to family members and limit the testator’s ability to dispose of their assets as they please.
According to the Italian laws of succession, there are three ways for heirs to gain access to relatives’ properties:
- legal necessary.
When there is no will, the estate devolves by law to the spouse, children and relatives up to the sixth degree. The Italian succession law has very clear provisions that clearly indicate who will inherit and how much he will gain.
An individual can transfer his estate in Italy by making a will (testamento)
The estate will pass to the heirs according to the provisions of the statutory rules that provide for the deceased’s relatives in varying proportions – depending on how close the relationship to the deceased was.
ILF: an Italian tax lawyer for all your real estate affairs
In addition to an attorney experienced in wills and probate law, you will need an Italian tax lawyer.
The transfer of an Italian property through inheritance to foreign heirs may be subject to inheritance and gift taxes in Italy. To obtain the transfer of an Italian property, foreign heirs will typically need to obtain an Italian tax identification code, open an Italian bank account, and hire a lawyer to handle the Italian probate process and property transfer.
The contents of this page should not be taken as an authoritative statement of Italian law and practice. Neither the author nor the publisher are responsible for the results of actions taken on the basis of information contained in this summary, nor for any errors or omissions. This text is not intended to render legal, accounting or tax advice. Readers are encouraged to seek professional advice concerning specific matters before making any decision.