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Introduction
When it comes to selling your Italian property, the main thing to consider is timing. Italy has a cyclical property market and you need to ensure that you are selling at a time when the market value of your property is high. However, if you are trading up in Italy it might make sense to sell during a downturn as the cheaper price of the larger property you're purchasing offsets the reduction in price of the house you're selling. If in doubt, you can always hold on to your property and rent it out and rent in the new location you are going to and wait for the property cycle to move in your favour.
It is advisable to remain in Italy during the sale period, at least until the signing of the preliminary contract, to ensure things progress satisfactorily. There is no longer any capital gains tax to pay in Italy
Legal requirements
The seller also has to comply with the legally stipulated notification requirements toward those having rights of pre-emption. Vendors must ensure they possess relevant property ownership documents and make sure they have paid any outstanding tax or utility bills on their property.
The process of selling property in Italy
1. Market research
Before you do anything, check out the market. Unless you're forced to sell, steer clear of slumps when prices are depressed and perhaps consider letting out long-term until the market recovers as an alternative.
2. Preparing your house for sale
It is worth doing some research through consulting with local agents to get advice on how to prepare your home to increase its attractiveness to prospective buyers. It's vital to consider what will appeal to local buyers.
3. Marketing your property
Once you have decided it's the right time to sell and are confident your property is in a condition which will appeal to prospective buyers, you are ready to go to market. The normal means of marketing a property in Italy is via an estate agent who can also value your property. If you used an agent to buy your Italian home, it could make sense to use the same one to sell it, as they will already know the property. Before you take on their services, you should check carefully what they will and will not do in terms of marketing and what they will charge as commission – make sure you shop around to get the best service!
However, it's increasingly easy these days to sell without using an agent. There are an increasing number of specialist websites and magazines advertising property for sale in Italy. The key advantage here is avoiding the high estate agents' fees. You will need to do your research to get the price right. Just looking at the adverts will not be enough. You will need to get out and see comparable properties in your area and check out their facilities. Alternatively, you could try to sell your property at auction.
4. Organising legal representation
There are several professionals you will probably deal with:
- A public notary – Unlike traditional lawyers, Italian notaries are neutral government legal representatives who act as witnesses to and registrars of property transactions. Under Italian law, only deeds of sale (rogitos) witnessed and authorized by a notary can be registered at the land registry. He or she will prepare all the appropriate paperwork and ensure this has been filled out correctly according to the wishes of both parties. The notary also has a responsibility to make sure the appropriate property taxes are paid on time.
- An Italian estate agent – In Italy it's not just solicitors who offer conveyancing services. In addition to finding buyers for sellers, many Italian estate agents also now can arrange your mortgage, help you agree a contract (compromesso) and organise the paperwork and searches ahead of the transfer of the property (rogito).
- An Italian “geometra” - The agent may appoint a geometra to carry out the searches on your behalf. The geometra's role is a fusion of the duties of a surveyor and those of an architect. Alternatively you can appoint a geometra directly.
- Lawyers – You would be well advised to appoint an Italian or Italian-speaking lawyer versed in Italian property law to act on your behalf, to ensure your interests are protected especially in terms of tax and inheritance. Although you may be able to find a reputable, independent Italian solicitor who speaks good English, this solicitor is unlikely to be versed in UK law so it can be advisable to also engage the services of a UK professional to advise on the international dimensions of the transaction. Specialist UK solicitors can be contacted via the International Property Law Centre (see www.internationalpropertylaw.co.uk for details).
5. Accepting an offer
Once you've found a buyer, the next step will usually be for them to make a written offer. This document (known as a “proposta d'acquisto irrevocabile” in Italian) sets out the price and terms of their offer (for example, that the property must be sold as seen and free of encumbrances, etc.) and is binding on the purchaser's part for a set period - normally from seven to fifteen days. Property prices in Italy are negotiable to a certain extent and so purchasers will expect to haggle.
The proposta usually comes as a standard form supplied by the estate agent that you the purchaser signs; however, it's also possible for the purchaser to set out their offer by writing a letter themselves. You will be sent two copies of the proposta by recorded mail. If you agree to the terms set out, you will sign both copies and return one to the purchaser. At this point neither party can change their mind about the price so before you sign, it's sensible to take legal advice.
It is normal practice at this stage for the purchaser to pay a deposit of between two and five per cent of the purchase price. The purchaser will probably insist that the proposta states that this money is being paid as an “acconto”, meaning it will be deducted from the purchase price and returned to them if the sale does not go ahead.
6. The preliminary contract
Once the purchaser has arranged their finances and all the searches have been satisfactorily completed, both parties normally sign a preliminary contract (“compromesso”), although this isn't obligatory. The compromesso is a legally binding contract which commits both parties to the transfer of ownership on the terms and conditions set out. It outlines certain obligations which both parties must fulfil and, crucially, it will commit the vendor to transfer the real estate free from encumbrances.
The compromesso can include as much information as the contracting parties wish to include and, if necessary, special terms can be inserted to deal with specific issues raised by the searches. However, there are a number of basic points the compromesso should always stipulate including:
- The property details
- The names of buyer and seller
- The purchase price and the terms of its payment
- The date of completion
- The size of the deposit payable on exchange
The compromesso is usually drawn up by the estate agent. It must be in writing although it doesn't have to be notarised. You should have the compromesso translated to make sure you understand exactly what you're signing. The document can either be signed in Italy or signed in the UK then posted or faxed (although it's not binding until received in Italy). The buyer can choose to have the preliminary contract registered at the land register to ensure the real estate cannot be sold twice.
The deposit (“caparra”) paid by the buyer on conclusion of the compromesso will range between 10 and 20% of the agreed purchase price. This will be in addition to the down payment made at the offer stage although both will be deducted from the outstanding purchase price due.
There are two different ways of agreeing a deposit:
- Caparra penitenziale: If the buyer decides not to go ahead with the sale after signing the compromessa, the seller gets to keep the deposit paid. If the vendor decides to renege on the deal, on the other hand, he/she must return the deposit to the buyer and pay the same amount again as compensation.
- Caparra confirmatoria: A caparra confirmatoria is identical to a caparra penitenziale but crucially gives both parties the right to take the other to court to force the deal to go ahead.
In a situation where a buyer's mortgage isn't approved, there is normally a clause in the compromesso which releases the purchaser from the sale without losing their deposit.
7. The notary's checks
Once the notary has received the signed compromesso, they will conduct all the necessary final checks in order to prepare the “rogito” (the final purchase deed). Notaries' searches will often duplicate those already carried out by your estate agent, geometra or lawyer and include:
- Checking exactly what is being sold, to whom, and with what authority
- Verifying the building is not in breach of any regulations
- Ensuring the property is unencumbered by debts or claims of third parties
- Two days before completion the notary will do a final check to confirm the seller has not raised any finance using the property as security
It is also possible to instruct a notary to simply witness the final contract without performing all these checks. This is a very risky strategy, however, as a notary would do so on the basis that purchaser and vendor accept full responsibility for any problems resulting from the final contract.
8. Completion
Once the notary's checks have been successfully completed, buyer and seller meet to sign the final contract at a pre-agreed time. Whilst the compromesso forms a private contract between buyer and seller, for ownership to be transferred from vendor to purchaser, the deal must be made public. This is done by the completion of a purchase deed (“atto di compravendita” or “rogito”) which must then be authorised a notary (notaio).
The rogito is drafted by the notary and then signed by both parties. If you are not fluent in Italian you must by law pay for a translator, so that you fully understand what you are entering into. If you are unable to be present in person you can appoint a representative (such as your Italian lawyer) to sign the contract on your behalf but you must have already granted power of attorney (procura).
Once both parties have signed the notarized contract, ownership of the property passes from the vendor to the buyer. The buyer must then pay the balance of the purchase price, all professional fees and transfer taxes. Once this has been done, the notary will issue a certified copy of the deed of sale and register the original document with the Land Registry.
9. Registration of title
On completion, the notary will register the sale at the local land registry (ufficio dell' agenzia del territorio) to make the purchase public. This entry will protect the buyer from claims by third parties. Copies of the deeds are also sent to the tax office.
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