Buying a House in Italy?

Last week my inbox was hopping with messages. 

Thinking of moving to Italy. How hard is it? How do I apply for Italian Citizenship?  Ya think I can find a house to buy in Italy?  Will the Italian bureaucracy make me insane? If I don’t speak Italian am I screwed?

For whatever reason, it seems folks who read this blog are getting the ex-pat fever or maybe simply looking for an alternative lifestyle. La Dolce Vita!

Before you dive into buying a home, you may want to commit to a long-term stay. Try out a town for a few months and see if the village or city is a good fit. Because everyone wants to live in Tuscany or Umbria doesn’t mean that you will adore the backpack carrying hordes of tourists who share those regions with you. Explore Campania, Basilicata, Molise, Puglia or Sardinia. Southern Italy is beautiful, costs less and I’d be able to visit. We’d love to see you in my hometown – Pontelandolfo (BN)

We love living in a small Southern Italian village.  Becoming part of the fabric of a tiny community is doable.  Prices are low, people are friendly and the fresh food…  Sigh.  Let us get back to the task at hand.

Disclaimer – I never bought a house! We rent a house twelve months a year. To aging Baby Boomers – oops Jack reminds me he is not a boomer since he was born pre boom and is just old – rental is an easy alternative. That said, I called my favorite Italian attorney, Rossella Mancini and asked her how it worked.

Steps To Buying Your Home

Step one: Codice Fiscale

Apply for a codice fiscale.  This is like an American social security number or tax code.  This number follows you.  It is used by Italian public offices to identify you.  You need to have one to enter into contracts, leases, loans etc.  The codice fiscale is assigned by birth to all Italians and upon request to the rest of us.  You can apply for your Italian codice fiscale through any Agenzia delle Entrate. (tax,office)

If you have applied for and became an Italian citizen, check your documents. I swear, I got a codice fiscale when I got the letter confirming my citizenship.  If you don’t have one, contact your nearest consulate.

Step Two: Love a House

Find a house you love.  The inexpensive ones need a lot of work.  Unless you speak Italian, I would suggest you hire an “Italian Friend” to help you search and translate discussions with owners, towns and contractors.  You may want to know about how much a renovation would cost before you commit.  Join us in Pontelandolfo and we can find a team to help you look for something cool.  

Sites to Help You Search for a House.

• FaceBook Groups – Italy Property Under 50,000 Euro, Renovating Italy and Expats in Italy
• Immobiliare.it
• Idealista.it
• Casa.it

Check them all out and then just come to Pontelandolfo.

Step Three: Contracts

Now comes the interesting part. Contracts and commitments. A Notaio – notary- handles land transfers and is allegedly impartial doing work for the buyer and seller. We are lucky to also have an attorney, Rossella, in the family to explain all this stuff to us. The seller must pay for the technical report on the state of the property and any necessary certificates.

To calculate fees and taxes at the time of sale, the price in the contract must be determined in Euros and it if possible, include the equivalent in dollars or other currency. 

If the cost of the house exceeds 2,000 euros, payment can be made according to the method agreed by the parties but cannot be made in cash. To allow for traceability, it is preferable to pay by bank transfer or wire from abroad. 

Disclaimer:  Double check all my info.  Rules Change and I could be wrong.

At the time of closing of the sale to a private person – like you – one pays between 2% to 9 % stamp duty tax calculated on the cadastral or real value of the property, with a minimum of 1,000.00 euro. I’m told it will be 2% if the house is your primary residence and 9% if it is a secondary residence.

I have heard from the breezes over the hills that some sellers and buyers have deeds that have one sale number and a handshake deal for a higher number. Contract price paid at the closing and the extra outside of the closing. A little tax scam for both sides.

Step Four: Cough up the cash.

Registry Fee: There is an imposta catastale, land registry tax.  This is a fixed fee that is €50 if you buy the house from a private person and €200 if you buy from a company. This pays for the change of ownership on the cadastral lists.

Value Added Tax: The VAT or as it is called in Italian IVA is due on every purchase and there is no exception for a house.  The percentage amount is based on whether you are buying from a private person or a company and if the house is a primary or secondary residence. It is 4% for a primary home, 10% for a secondary and 22% for a luxury model – like that villa with a tennis court, pool and putting green.

Again, I am not an attorney, Realtor or even good at math. Double check everything! This is what I understand the process to be.

Step five: Pay the Staff

You will of course have to pay for any translations, translator, notary, real estate agency (if you use one) and the person who keeps you sane. This is really no different than buying a home in the USA.

Step Six: The Beat Goes On

Live la dolce vita and pay property taxes and utilities.  There is currently an interesting law in Italy.  If this is your “first house” or primary residence you pay lower taxes.  As an expat you will have to take up residency within 18 months of the purchase.

• IMU is the municipal real estate tax payable by those who own a property. If it is your primary residence and isn’t what is classified as a luxury home, with today’s laws there is no tax due. IMU is paid to the Municipality where the house is located and depends on the cadastral value of the properties. Currently in Pontelandolfo it is equal to 0.95%.  Less than 1%!

• TARI is the annual tax on waste. TARI is always paid to the Municipality and depends on the square meters of the house and the number of family members. Pontelandolfo is expected to reduce it by 2/3 for residents abroad. The town figures you won’t be there all year.

Step Seven: Dinner?

Call me.  I will bring a bottle of prosecco to celebrate.  Then we will find a lovely little trattoria for dinner under the setting sun.

Ci vediamo!

Midge

PS – 2021 – Come Cook in the Kitchens of Pontelandolfo! New one to seven day programs for groups and individuals. Ask about our Learning Italian in the Kitchen classes!