Buying a property in Italy and obtaining Italian residency
People cannot get a residence permit in Italy by buying a property because this country, like many other countries, does not grant a residence permit for purchasing a property. Few countries give residence to the property owners, such as Portugal or Spain. However, any foreigner can buy property in Italy, and its only condition is to have a long-term residence in this country. One can obtain this residence by studying or working in Italy. Since Italy is a member of Schengen, those interested in living in Italy can easily travel to this country by residing in other European Schengen member countries.
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Buying a property in Italy and people who are qualified to buy a property
People who have a long-term residence in Italy for more than six months and can open a bank account in this country are eligible to buy a property in Italy. This long-term residence can be a student residence or work residence in this country. Also, people who have a 5-year Italian tourist visa and are allowed to stay in Italy for 90 days each time they enter this country can buy a property in this country. Purchase of this property will not lead to a residence permit. The experts in MIE Austria have prepared this article, and any copy of it would be illegal. Most of Italy’s banks give loans to foreigners who want to buy a property in this country.
The legal process for buying a property in Italy
Buying a property is a legal process, and it is best to hire a lawyer familiar with this process in Italy. One can buy a property in Italy by following these steps:
- Step 1: Get the financial code
Receiving a FISCALE CODE or financial code is like opening a bank account, and this code is necessary in case you face any problems during the transaction. This identification code is based on the last name, first name, place of birth, and date of birth.
- Step 2: Open a bank account
The applicant requires to open a bank account to transfer money.
- Step 3: Official offer letter
When the buyer likes a property, one must announce one’s purchase request in writing. If the seller accepts the buyer’s written request, the seller grantees not to offer the property to another buyer within a specific time to complete the property purchase process.
- Step 4: Checking the ownership
Before starting the transaction, the applicant must check the ownership (CADASTRAL CHECKS) of the land registry. It is to verify the legality of the land ownership or to make sure that the owner is not indebted (loan) for the property being traded.
- Step 5: Agree on a sales offer
This agreement is a legal document in which the agreed sale price, the date of completion, any information, and property rights are specified. This process is usually completed between one and three months after the implementation of the proposed sale agreement.
The applicant will pay about ten percent of the property price when one signs the contract, and a confirmation is issued. This amount is not refundable if the buyer cancels the transaction.
There are two types of agreements; one is a public document, and the other is a private contract, which the notary can certify.
- Step 6: Demand for Purchase (Rogito)
The notary will issue the purchase request and the final contract after signing the proposed sale agreement. They are signed by both parties, then the final payment is made, and the transaction is completed. The notary public issues a copy of the sales certificate and the land is registered.
The cost of buying and renting a property in Italy
Buying a property in Italy is slightly improving despite this country’s poor economic situation. Although in the last seven years property prices in most European countries have been growing, this rate has been stable in Italy. This rate has even decreased by 30 to 35 percent compared to 2008. According to the European Central Bank (ECB), the house price index in Italy until 2018 decreased by 0.8% in the fourth quarter of 2018. According to the National Institute of Statistics, the price of new homes has increased by 1.41 percent, while the cost of old houses has decreased by 1.31 percent.
Here are the prices of new houses in some of the most important cities in Italy:
| City | Price of one square meter | Situation |
| Rome | 6،300 | 1.2% increase |
| Milan | 6،750 | 3.3% increase |
| Florence | 4،800 | 0.8% increase |
| Turin | 4،450 | 2.3% increase |
| Naples | 3،700 | 0.7% increase |
| Bologna | 3،300 | 6.6% increase |
| Genoa and Palermo | 2،900 | 0.4% increase |
Of course, besides the price of the property, there are some additional costs when buying a property in Italy. Usually, the cost of purchasing each property is about 10 to 20 percent of the property value, but this amount can be negotiable. Here are the costs:
- Sales Agent Commission
If you find a property with the help of a real estate agency, you will have to pay 3% of the property price plus the 3% VAT, which is about 22%. This amount is not divided between the seller and the buyer, but both of them must pay it. According to Article 1755 of the Civil Code, this amount must be paid after the transaction.
- Tax stamps, land registration taxes, and property taxes
These are three mandatory expenses for the buyer. If the buyer buys a commercial or residential property, these amounts can vary. The personality of the buyer and seller also affects this amount.
If the seller is a person, a real estate company, or a construction company, five years must have passed since the completion of the property construction, and it should not be included in the VAT law; the costs would be as follows:
- The tax rate for the first house is 2% and for the second house is 9% for the private buyer. If the buyer is a commercial entity, one must pay at least 1,000 Euros.
- Land registration tax is a fixed amount of 50 Euros.
- Property tax is a fixed amount of 50 euros.
If the seller is a construction company and five years have passed since the construction of the property, and it is included in the VAT law, the costs are as follows.
- VAT 4% for the first house 10% for the second house and 22% for the luxury houses
- A fixed tax rate of 200 euros
- Land fixed tax rate of 200 euros
- Property tax of 200 euros
- An additional cost of 230 euros
- Land registration fee 35 euros
- Ownership fee 55 euros
- Notary fees
It is the responsibility of the buyer, and this cost can be different in each city.
- Extra expenses
It includes the cost of hiring a lawyer, surveyor, architect to inspect, and translator.
The cost of renting a property in Italy is usually lower than in other countries, and it is mostly because of the government’s rent control and the restrictions that are imposed. In the table below, you can see the rental fees in some cities in Italy.
| City | City center (euros per month) | Around the town (euros per month) | Measurement |
| Rome | 2،584 | 2،198 | 120 square meters |
| Milan | 2،837 | 2،671 | 120 square meters |
| Venice | 2،147 | 120 square meters |
However, you can get a loan to buy a property in Italy. We discussed how you could get a loan to buy a property in Italy.
Most Italian banks offer mortgages to foreigners. The applicant must write a request letter to the desired bank. Then, the applicant’s database will be reviewed, and an inspector will be selected to review the applicant’s property and submit the relevant report to the bank. The notary issues a release to the bank stating that the seller has the ownership right and has transferred the ownership to the buyer. The bank will issue the applicant’s loan confirmation after examining the financial issues of the transaction.
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