A Guide to Buying a Property in Italy

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A Guide to Buying a Property in Italy Powered By Docstoc
					by: Les Calvert

Overview

An increasing number of foreign nationals have taken to purchasing real estate in Italy over the
course of the past fifteen years. The increase in real estate purchases in Italy by foreign nationals
really took off following the integration of Europe into the EU. With the advent of the European
Union, more and more foreign nationals began purchasing different types of real estate within
Italy. This included commercial, residential and speculative investment purchases by foreign
nationals.

The vast majority of foreign nationals who have taken to purchasing and owning real estate in
Italy are from within one or another of the European Union nations. With that said, British
investors have been particularly active in buying and investing in real estate in Italy during the
past five to ten years.

The prime real estate purchases in Italy by foreign nationals in recent years have been
concentrated fairly heavily in rural regions of the country

Investment Real Estate

As with the other nations that are members of the European Union, Italy has seen a growth in the
number of foreign nationals making real estate purchases within that country since the inception
of the EU. The common marketplace that was formed with the development of the EU is deemed
to be the primary reason as to why there is so much activity in the arena of real estate buying and
selling in EU nations such as Italy. A significant amount of the movement in regard to real estate
in Italy involves the buying and selling of property for investment purposes.

A significant amount of activity when it comes to investment real estate has involved two
primary types of property: commercial or industrial property as well multi-family properties that
are used for residential and vacation purposes.

There are no real restrictions on foreign nationals purchasing real estate in Italy beyond a bit
higher purchase registration tax that will be discussed later. This holds true for investment real
estate as well as other types of real property in Italy.

Residential Real Estate - Single Family Dwellings

The biggest rush of selling when it comes to residential property has occurred outside some of
the major cities in Rome. Many foreign nationals have involved themselves in this particular
buying spree. Indeed, particularly people from the EU have actively made the purchase of homes
and villas in rural areas of Italy to be used as second homes. These people maintain that they are
attracted to the easy going and relaxing lifestyle of life in rural Italy. (There have been some
motion pictures in recent years set in such environments that many real estate experts in Italy
maintain have further spurred the sales of rural residences in the Italian countryside.)
Residential Real Estate - Apartments

When it comes to finding private residences in the larger cities in Italy, apartments remain one of
the most popular types of residential property bought and sold in the 21st century. Take for
example the city of Rome. Apartments remain one of the most often conveyed forms of real
property within the Italian capital city. (Of course, the limited amount of living space and the
ever growing population of Rome have combined to make apartments invaluable residential
assets in that city.)

Many foreign nationals have invested in apartments in the more major Roman cities over the
course of the past decade for two primary reasons. First, these apartments are allowing these
foreign nationals a second and oftentimes more affordable residence in one or another of the
Roman major cities for their own purposes. Second, many people from other nations are making
the purchase of these apartments in the larger cities in Italy to then be let or rented to other
individuals.

Generally speaking, these investors who are purchasing apartments in Italy are renting to people
who will be in Italy for an extended period of time on business. In the alternative, they are
renting these apartments to individuals and families who have elected to spend an extended
period of time in Italy, in one of the major Italian cities, on holiday.

Vacation Real Estate

Vacation real estate remains a proverbial hot property in Italy at the present time. The demand
for real estate in the major resort communities in Italy have sent the costs of real estate in those
communities through the roof. With that said, many of the more healed foreign nationals
continue to attempt to make the purchase of nicely situated real estate in the resort communities
in Italy.

One of the other areas in which vacation real estate is selling at a brisk pace is in some of the
more rural spots in Italy. As mentioned previously, many foreign nationals are taking to
purchasing real estate and graceful homes in rural parts of Italy to be used for their second
homes. Likewise, many foreign nationals are purchasing real estate in more remote and rural
areas of Italy for use on family or other types of vacations and holidays.

In addition to using these properties for their own personal holiday or vacation purposes, many
of these same foreign nationals are leasing these properties to other foreign nationals during
those times of the year in which these owners are not occupying the properties themselves. As a
consequence, many of these foreign nationals have been able to make their vacation properties
pay for themselves. Indeed, there are some foreign nationals who have gone so far as to purchase
more than one residential property in different locations in Italy. These individuals will use one
or another of these residences at different times during the year and let them out to others the
remainder of the time. These individuals have found this type of investment to be profitable.

Successfully Purchasing Real Estate in Italy:
Specific Steps to Buying Real Property in Italy.

The real estate sales and purchasing process in Italy is fairly streamlined and not particularly
complex. For the most part, a foreign national stands in the same shoes as does an Italian citizen,
with one exception. When it comes to the purchase of real property in Italy, a foreign national
must pay a 11% purchase registration tax after the sale itself is consummated. An Italian citizen
must only pay a 4% purchase registration tax.

In Italy, the first step towards the purchase of real estate is the initial agreement between the
parties. Once the initial agreement is signed and executed, there are some primary tasks that must
be completed by the parties. For example, the buyer must obtain appropriate and sufficient
financing. The seller must work to make certain that title to the property is free and clear of any
and all encumbrances so that it can be conveyed to the buyer.

When this initial agreement is signed, the seller will post a deposit in the amount of at least 10%
of the total purchase price of the real estate being sold. It is not uncommon in Italy for deposits to
run as high as 50% of the overall purchase price of the property. Deposits in Italy tend to be
higher than what is seen in many other countries around the world.

Generally speaking, the deposit is not refundable if the buyer simply decides that he or she does
not want to buy the property. Indeed, the only real circumstances in which a buyer can obtain a
refund of the deposit -- even a hefty deposit of upwards to 50% of the purchase price -- is when
the buyer backs out of the deal or in circumstances when clear title to the real estate cannot be
obtained within the time set forth in the initial agreement between the parties.

The real estate purchase process is overseen by a notary in Italy. The notary actually has more
duties than is normally associated with a notary involved in real estate transactions in other
countries the world over. For example, the notary in Italy is responsible for carrying out title
searches to work to make certain that the title to the property is free and clear of any obvious
defects or liens.

Many real estate experts in Italy recommend that a purchaser take the time to hire what is known
as a geometra. The geometra will survey the physical boundaries of the property for sale to make
sure that it actually does comport with what is listed on the legal description that is subject to a
contract for sale. (These experts maintain that this particularly is important when it comes to
older properties in Italy.)

The real estate purchasing process can take upwards to six months to complete in Italy. For this
reason, unlike in many other countries around the world, it is a commonplace occurrence for a
purchaser to move into residential property after the initial agreement is signed. In most
countries around the world, the purchaser does not take possession of the property until the final
agreement is executed and the deed to the property is transferred from the seller to the buyer.

This article was posted on October 17, 2006