Real estate law

Buying property at auction in Italy: government property auction

Judicial real estate auction in Italy: government property auction

When it comes to buying a house at auction in Italy, some people perceive the opportunity of making a good deal. But on the other side, the lack of information about the procedures and the timings discourages the most.

We have conceived this page to help people get in touch with the whole process. Reading this page you’ll get the answer to some of the most frequently asked questions regarding buying property at auction in Italy. Such as: as a non-resident, can I ​​participate in a judicial auction in Italy? Is it possible to get a loan to buy a house at auction? What are the house auction rules?

In short, our Law Firm regularly helps clients from all over the world to win property in auctions. We are here to ensure you follow all necessary laws and regulations during the procedure. Many properties are available at auction in Italy and often this means saving money on the purchase price.

Judicial auction in Italy: the rules in the current real estate market

Are you considering participating in a judicial auction in Italy? The real estate market here offers unique investment opportunities for 2023-2024.

Let’s take a look at the following regarding buying a house at auction:

  • What is the auction procedure
  • Key factors to consider when buying at auction with a mortgage
  • Understanding the auction guide price meaning.

First and foremost, it is essential to be well-informed about the entire process. What is involved in an Italian government property auction and are Italian home auctions commonplace? Can ILF help win houses in an Italy home auction? Are Italy auction homes much cheaper than purchasing a property another way in Italy? How can I make sure I am following all home auction rules and what are the pros and cons of buying property in Italy? The government website is not always able to provide all the information, but you can visit the Portale delle Vendite Pubbliche, the official website for the Public Sales to have an overview of the properties that are currently listed, their auction calendar, and other critical details.

One of the most attractive aspects of purchasing a property in a judicial auction is the possibility of buying at auction with a mortgage. In Italy, several banks offer mortgage loans specifically designed for auction buyers. These loans can cover up to 40-50% of the property value, making it easier for investors to secure financing for their desired properties. Our law firm can help you find the best mortgage for your needs.

Understanding the auction guide price meaning is crucial when participating in a judicial auction in Italy. The guide price is an estimate of the property’s value, calculated based on factors like location, condition, and market trends. It serves as a starting point for the bidding process, and it is essential to keep in mind that the final sale price may be higher or lower than the guide price.

When a house or an industrial building is put up for auction

A real estate property is put up for auction when the owner falls into default on a loan and the bank or creditor forecloses on the property. The creditor can ask a judge to demand payment from the debtor. If the debtor is unable to pay the debt, the decree becomes enforceable and the creditor can use the property to satisfy their claim and put the property up for judicial auction. To guarantee the creditor’s interests, it is required that the auction comply with the principle of publicity and is offered to an unlimited number of people. Therefore, the offer is included on the Ministry of Justice’s website to fulfill this requirement.

Now, let’s go ahead with some geographical data.

Property auctions in Italy: a growing market

There were 113,056 property auctions in Italy in 2022. This means that 309 properties (houses, stores, funds, warehouses, garages, etc) have been sold on auction daily (source: Nplsre). The distribution of properties sold at auction is focused in the north-central region.

Geographic distribution of real estate auctions in Italy in 2022

Region%age of auctions
Northern Italy37.89%
Central Italy24.68%
Southern Italy22.17%
Islands15.26%

Types of properties at auction

What are the most common types of properties sold all’asta? Only 57.45% of these units are in the Residential category. The other 42.55% is represented by Commercial category, including:

Permitted UsePercentage sold at auction
Residential properties57.45%
Basements, garages, boxes10.62%
Shops, offices and commercial premises12.28%
Industrial, commercial or laboratories3.3%
Warehouses3.05%
Rural buildings and agricultural land11.42%

Let’s deepen the data from 2022. 68% of the units at auction can be attributed to residential properties (studios, apartments and villas, accounting for 57.45%) and their accessories (basements and garages, with 10.62%). Growing at 12.28% is the category of stores, offices and premises used for commercial purposes to which 3.3% were warehouses. An important share of 11.42% is then covered by land, agricultural and building land, while 0.49% can be attributed to construction sites under construction, finished, semi-finished, abandoned or partially built, a further 0.47% to hotels and other hotel facilities, and finally the remaining 0.87%, referred to as “other” to trulli, theaters, cemetery chapels, barracks and oil mills.

Trends in real estate auctions in Italy in 2023-24

If we move from analyzing the number of properties at auction to analyzing the number of procedures carried out, the figures rise, because the same property can go to auction several times.
In 2022 there were more than 192,000 auctions that took place on national soil, registering a 7% increase in the third quarter compared to the second, but an 8% decrease compared to the first, for a total value of the minimum starting bid of just over 31 billion euros.

Italian cities and regions most active in real estate auctions

Did you know that Rome, Naples and Catania in Sicily are the top 3 spots for auctions right now?

If we further explore the data on the first table above, 71% of the auctions took place between the Northwest, South and Central Italy, with the latter concentrating 26% of the lots put up for sale throughout the Peninsula, while 13% and 16% were in the Northeast and Islands, respectively. Rome with over 4800 auction attempts (2.5% of the national total) is first in Italy in the relative ranking, with numbers almost three times those of Naples (second with 1,532) and almost three and a half times those of Catania (third with 1,394).

Among provinces, however, the top spot goes to the metropolitan city of Rome (with 11,790 lots for 6% of the national total) followed by Milan (5,567 for 3%), Catania (5,471) and Perugia (5,450).

Italian house auction trend

How does the Italian Public Auction Process work?

Meanwhile, it is useful to understand that in the Italian legal system, the coercive enforcement of a claim, which has already been ascertained in or out of court, but not spontaneously enforced, is achieved through the process of enforcement, regulated by the Code of Civil Procedure in Articles 474 et seq.

Through forced expropriation, the creditor implements a set of acts aimed at forcibly taking from the debtor certain assets that are part of his property and converting them into money, with which to then satisfy (or attempt to satisfy) his claim.
This is a so-called indirect form of execution, to distinguish it from a specific form of execution, which is called direct, since it has as its object precisely the property owed.

Special Power of Attorney

Download a free template of an Special Power of Attorney to attend a public auction in Italy

Download now
Download now

Procedure to seize the property

In general, expropriation proceedings are essentially divided into three macro stages, governed by Articles 483 to 512 of the Code of Civil Procedure:

  • the seizure of the property;
  • the sale or assignment of the seized property;
  • the distribution of the purchase price among the creditors.

The phase that will be examined here is precisely the second one, namely that of the sale. Through which the proceeding creditor (or any other intervening creditor, provided he or she has an enforcement title) seeks to obtain the liquidation of the expropriated property, that is, the transformation of the property into money

How the auction process starts

Immediately after having seized the property, the creditor has two options:

  • apply for the sale of the attached property;
  • apply for their assignment in payment.

When the forced sale is ordered (which, of course, always follows the first type of petition), in general, the documents that must first be viewed in order to verify interest in participating in an auction are:

  1. the order and/or the notice of sale, which contain the details for the identification of the property to be sold, the base price and minimum bid, the amount of the deposit and the method of payment, the indication of the type of procedure and the definition of the auction mode (traditional or telematic synchronous/asynchronous/mixed) as well as some indications extracted from the appraisal;
  2. the appraisal report, which is an integral part of the notice of sale.

Italian auctions can take place online!

The spread of electronic commerce has also had a great influence on this type of procedural activity. This was possible thanks to the legislature, aware of and taking advantage of the strong surge that the system of purchases and sales concluded online has had. It’s convenient to first make telematic movable sales tendentially obligatory (see Paragraph 6 of Art. 530 of the c.p.c, novated by Article 48, Paragraph 1, Law No. 90/2014, converted into Law No. 114/2014) and subsequently real estate sales, through the rewriting of Paragraph 4 of Article 569 of the Code of Civil Procedure, which took place in 2016.

Online auction sale is nowadays the rule, while traditional way (in person and in front of the Judge) is the exception

The online bidding can be synchronous or asynchronous.

Synchronous telematic auction

  1. The bids may be submitted exclusively via PEC (Italian certified mail). You must have it in advance – there are many services providing it even for a small annual fee.
  2. A synchronous sale means that during the course of the Asta Immobiliare, the bids will be made in real-time and with the simultaneous connection of the judge (or the contact person of the procedure) and all the bidders.
  3. In order to participate the bidder will have to issue a check or wire transfer worth 10% of the minimum bid.
  4. The bidder now will connect on the portal of the procedure at an established time, together with all the other participants and the judge. Whether in the synchronous or mixed synchronous mode sale, the bidding begins a few minutes after the counting and verification phase of the bids received.
  5. Immediately after the count, in fact, the judge will open the auction and start the countdown, defined by the professional contact person for the procedure at the start of the bidding (generally the duration of the count, specified in the same notice of sale, is 5 or 3 minutes).
  6. Each time a higher bid is received, the count-down will start again.

Asynchronous telematic auction

  1. The bidding must be carried out in a predetermined time space and without the simultaneous connection of the judge and the procedure contact person.
  2. Also in this case, bids may be submitted exclusively by telematic mode and through PEC. But, unlike the synchronous sale, the bidding will begin on the date and at the time specified in the notice of sale and may even last for several days.
  3. Also, unlike the synchronous mode, the countdown indicates the time remaining before the actual expiration of the tender.
  4. In the case of the asynchronous race, it is possible to provide for an additional extension of the race, referred to as “self-extension.” This extension phase is used only in the case of bids received in the last minutes of the auction.
  5. When the last bid is received, the new countdown is activated and the duration of the auction is extended until no more new bids are sent.
auction in Italy

Different types of Italian auctions: vendita con incanto e vendita senza incanto

Sale with auction – vendita con incanto

The sale by auction is characterized by the public competition of the bidders in the public hearing room before the execution judge. The reference to virgin candles has been replaced with the time of 3 minutes from the bid to be able to award the property. The adjudication is made to the last highest bidder. However, the same is not final, since within 10 days of the adjudication new bids may be made, 1/5 higher than the price reached in the auction (Art. 584 of the Italian Code of Civil Procedure). If this happens, a competition takes place between those who made the new bids and the first successful bidder.

The final stage of the sale is characterized by the transfer decree, issued after the price has been paid and by which the judge transfers ownership of the property.
With the same decree, the judge orders the cancellation of the transcripts of foreclosures and mortgage registrations, as well as the registrations and transcriptions of foreclosures after the transcription of the foreclosure, ordering the debtor or the custodian to release the property sold.

If the successful bidder fails to pay the price within the stipulated period, the court:

  • declares his forfeiture
  • pronounces the forfeiture of the security
  • orders a new auction.

Sale without auction – vendita senza incanto

This form is carried out by means of individual bids deposited in a sealed envelope at the chancery and without competition among competitors. A security in an amount not less than 1/10th of the price set as the basis for auction in the order ordering the sale must be deposited along with the bid.
At the hearing, having ordered the opening of the envelopes, the judge shall evaluate the bid after hearing the parties and creditors.
If the bid exceeds the fixed price by 1/4, it shall be accepted. If it does not exceed this limit, the judge may not order the sale in case of opposition by the proceeding creditor or if he considers that there are serious possibilities for a sale on better terms at auction.
In case of multiple bids, the court may order a competition among the bidders, and in the absence of adhesions to the competition shall proceed to the sale to the highest bidder or by auction.
The sale is carried out with the issuance of a decree, in which the manner and time limit for payment of the price is determined.
Having done the same, the court orders the transfer of the property by a new decree.

House auction in Italy: advantages and risks

There are many advantages to purchasing real estate in Italy through judicial auctions. All property transcriptions and registration costs are waived. Properties sold at auction normally sell below the market value. In addition, according to the principles of publicity and transparency, all real estate auctions in Italy are to be available on the Internet.
Here are the relevant real estate auction sites:

  1. The website of the Ministry of Justice is a user-friendly site containing an updated list of all properties on judicial auction. The site lists information such as property information, minimum bid price, and a .pdf file “Avviso” with information regarding the auction date, time, and place.
  2. The official page of the National Association of Judicial Auctions offers more detailed information about the properties on judicial auction with useful search engine filters (type and purpose of property, minimum and maximum price, location) and procedural data. It is not, however, in English and therefore less user-friendly to non-Italian speakers. Please let us know if you would like ILF to help navigate this and conduct searches on your behalf.
  3. Local Italian court websites also have a section called Aste, meaning auctions. The search engine then redirects you to the website of the Ministry of Justice.

These Italian online auction sites include in the information on the website the name and contact of the professional delegated by the court (lawyer, notary, or accountant) who provides the necessary property and auction information. The contact of the appointed custodian who arranges property visits free of charge is also included. The names of the professionals are shown in the notice of sale.

Taxes for real estate purchase in auction in Italy

You undoubtedly know that when you buy a house in Italy, in addition to the actual sale price you have to bear the taxes prescribed by law for the transaction of real estate property. Auction fees do not differ much from those of the classic purchase in the open market, but the complex calculation requires some clarifying examples.

Let’s look at the amounts due for a real estate auction where the seller is an individual or a VAT-exempt company and analyze all the expense items to be added to the cost of the property:

  • Cadastral tax and mortgage tax: each of the two items corresponds to a fixed amount of 50.00€, so consider 100.00€ in total;
  • Revenue stamp: 16.00€ for each copy of the document produced;
  • Registry fees: 11.54€ for each copy of the document;
  • Registration tax: unlike the other items, the registration tax is variable and corresponds to 9% of the purchase cost or value of the property, which drops to 2% when it is the first house.

Regarding the registration tax, a clarification should be made.

It used to be that the percentages were calculated exclusively on the purchase price of the house. Since 2014, however, Circular 2/2014 of the Internal Revenue Service has extended the possibility of calculating the tax percentage on the cadastral value of the property to judicial sales as well, as provided for free market transactions since 2006.

The tax calculated on the cadastral value is usually lower than that calculated on the purchase price and is, therefore, the most convenient type of taxation. To avoid surprises, however, it is advisable to quantify the exact amount first, which we can provide for you.

However, if you wish to calculate the cadastral value, add 5% to the cadastral annuity of the property indicated in the title deed and then multiply the result obtained by one of the following coefficients:

  1. property in cadastral group A or C (except for categories A/10 and C/1) not subject to first home benefits: coefficient 120
  2. property subject to first home benefits: coefficient 110

Online real estate auctions: How can I attend an Italian auction for a property?

Ask an Italian real estate attorney

Italian auction homes are often sold below market price as banks seek to recover loans from defaulted owners. This can be an opportunity to grab a bargain, especially for properties in popular locations. However, the properties are sold as-is, so buyers inherit any issues with the property. It is important to conduct due diligence before bidding.

There are pros and cons of buying property in Italy at auctions. The pros include discounted prices and the potential for capital gains. However, the cons include lack of financing, limited time to conduct inspections, unknown legal issues, and a complex auction process.
House auction rules and procedures in Italy are established by the courts. The auction process typically starts with an initial deposit of 10% of the price offered, followed by the submission of an irrevocable sealed bid on auction day.

To attend an auction in Italy you need to appoint an attorney to represent you since the application must be submitted with a PEC, (the Italian certified email address). In addition, the application to file is technical, and therefore difficult to file for a non-expert.

Contact us Now by filling out the form on this page.

OUR SERVICES
We are a multidisciplinary team offering a full spectrum of services to prospective foreign investors who are interested in participating in the Italian judicial real estate auctions. Our legal department is composed of lawyers fluent in English and experienced in real estate law, with extensive knowledge of standing legislation and rules. Our internal real estate department consists of multilingual and licenced real estate agents and a real estate management team with a vast network of contacts and a native’s take on the real estate market and the red tape involved in purchasing a property. Our professional accountants, surveyors, and architects are available to assist in your real estate purchase.
Our team of experts will:

  • assist you in familiarization with the local real estate market and the procedures for purchasing a property by means of a judicial auction;
  • help you better understand auction guide price meaning
  • inspect all preliminary documents on a listed property and provide advice pertaining to it;
  • summarize our findings in a technical and due diligence report;
  • discuss strategies for successful bidding;
  • provide representation for offer submission and complete the administrative steps related to it;
  • represent you and take the respective legal actions in the case of any burdens on the property.
  • guide you through understand the Italy government website
  • advise you on buying at auction with a mortgage

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.

Do you need further information?

Our legal team replied to all the most common questions about the topic.

Read the Real estate law FAQs

Navigator Real estate law