Alexander and Pace - Purchasing Abroad

There are two words in particular that you must be familiar with, they are "Compromesso" and "Rogito". These are the two contractual stages to owning a home in Italy. The Compromesso is the preliminary contract whereby the purchase is secured with a deposit called a "caparra". The Rogito is the final contract.

If you find your dream house and a price is agreed upon between yourself and the vendor, a preliminary contract or "Compromesso" is drawn up. The Compromesso is comprised of:

description of the Vendor and Buyer
A description of the property to be sold
The Sale Price
The deposit (caparra or deposito) varies but is usually around a third of the Sale price
Date of the Final Contract (Rogito)

The Compromesso is proof of intention to buy and is binding in a court of law if the Compromesso is registered with the local Registration Tax Office. Once you and vendor have signed the Compromesso you are both committed to the transfer of the property. You may still withdraw at risk of loosing your deposit. The vendor may also withdraw from the Compromesso but will have to return the deposit and in certain instances pay a penalty of the same again. Under these terms a Compromesso contract is very rarely broken and inevitably leads to the signing of the final contract.

Assuming all goes well (and you don't want to loose your deposit), you will want to buy the house and sign the final contract (Rogito). But, before doing so you will require a tax code called a Codice Fiscale in order for you to pay tax on the building. The Codice Fiscale works in much the same way as a National Insurance number and is easy to apply for. It can also be obtained from your nearest Italian Consulate in the UK.

A few months after signing the Compromesso the Rogito or final contract is signed. The Rogito is a legally binding document and requires the presence of an official called a "Notaio". He oversees the signing of the Rogito, registers the Rogito to the Land Registry and collects the tax on the property. The Rogito will consist of :

A description of the property and Land for Sale
The date of the Sale
Name of the vendor and the new buyer, i.e. you
The declared value of the property (NOT THE PURCHASE PRICE)

NOTE: The purchase tax which is calculated by the Notary using official tables is based on a declared value of the property as opposed to the actual purchase price. The declared value is based on calculations made by the Land Registry and is official. The declared value can be as much as 50% or 60% less than the actual price you've paid.

The Notaio,the Vendor and yourself will all be present (unless you appoint a legal power of attorney to represent you). The Notaio will want to know that you have given proof of good credit to the seller and will be able to pay the sale price. Having satisfied this question, (usually a banker's guarantee) the Notaio will go on to read out the Rogito. Having read out the Rogito, the Notaio, the vendor, and yourself will all sign it. The Notaio will then register the sale with the Land Registry and you are then the legal owner of the property.

Purchase Price (minus deposit)
Purchase Tax - 10% if non Resident, 4% if Resident (of Declared Value of property)
Land Registry Fees
Bolli (stamp duty), 1% of Declared Price
Notary fee, normally between 2 - 3% of declared value. (Subject to VAT)
Estate Agency fees 3-5% of Purchase Price. For resale properties only (the vendor also pays agency fees in this case). With regards to newly built properties, the vendor only is subject to paying estate agency fees. Commission is subject to VAT.

Total costs, on average, should not exceed 12% of the purchase price and include purchase tax, stamp duty, the Notary fee, fees for the surveyor (usually included in the notary fees) and agency fees.