The buying process

Preliminary Agreement (Compromesso)

Once a suitable property has been identified, a Preliminary agreement (similar to the local Maltese convenium) is entered into by both parties. The agreement binds both parties to proceed with the sale pending satisfactory outcome of any conditions, such as subject to building permits, subject to structural survey and /or subject to mortgage. The preliminary agreement states:

• Who the buyer is, where they are from and their status.
• Who the seller is, where they are from and their status.
• The description of the property and its location.
• The agreed selling price for the property.
• When the sale is to be completed by.
• Any conditions of the sale.
• The date the seller has to agree to this agreement.

It must be reinforced that if the buyer signs this document they are legally bound to buy the property or they will forfeit their deposit. The validity of this agreement is normally three (3) months.

Deposit (Caparra)

Following the signing of the preliminary agreement, the deposit is paid. This goes directly to the seller and if they do not finalise the agreement within the time period, then they will have to return the deposit in full.

The deposit that is required at this point can vary depending on the value of the property and the seller’s wishes, but it is normally 10-30%.

If the seller agrees to this contract and later withdraws then the buyer is legally entitled to the deposit. If the buyer withdraws from the sale without good reason then they will forfeit the deposit.

Deed of Sale (Atto)

This is the formal signing over document and has to be drawn up by a notary (notaio) and signed with both buyer and seller present.

The outstanding balance on the property is expected to be paid at the deed of sale, therefore sufficient notice must be given to local Banks to ensure the funds are received prior contract. The notary should immediately notify the Land Registry (Catasto) of the sale and they will then send the deeds directly to the buyers.

Power of attorney (Procura)

If the buyer cannot or does not wish to be present for the contracts, then a representative can be appointed to sign on his behalf by power of attorney.

Notary (Notaio)

Similarly to Malta, these are effectively public officials and act neither for the buyer nor for the seller. The notary drafts the deed of sale, mortgage applications and carries out the searches on the property to ensure clear title.

The notary charges are a percentage fee on the property value or a fixed fee.  This would amount to approximately €2,000/€2,900.

Legal Costs

No stamp duty is applicable other than 10% VAT on the purchase value.

Ownership Costs

There are two taxes to be paid annually on property:

• Council Tax (Imposta Comunale Immobili): calculated from the zone the property is in and the type of property. It is normally much lower than other countries. The actual figure varies between communes (councils), it is normally between 0.4% - 0.6% of the property value. It also depends whether the property is the buyer’s only home.
• Refuse Tax (Rifiuti Solidi Urbani): calculated on the surface area of the property. This is a very small amount per year.