Buying Property in Puglia | a Guide | KOP

Buying property in Puglia | A Guide

Note for buyers of property in Puglia and in Italy in general: Those who are really interested in purchasing a property in Puglia need to be aware of 2 steps involved in it.

Getting a Codice Fiscale, a card that enables citizens (EU and non) to open a bank account, purchasing a property, getting a connection to utilities (electricity, telephone, etc);

Opening a bank account on which to transfer the necessary funds for a purchase.

A guide to the buying process of real estate in Italy

The purchase process in Italy is not as complex as people might think - especially given the reputation Italy has for red tape - and may involve 1 to 3 steps. The choice for opting for 1, 2 or 3 phases will, hopefully!, become clear in the explanation that follows, trusting to provide a small but helpful contribution to all those who are starting thinking of Italy as their second or, why not, first home.

The 3 stages or phases involved in buying property are: 1) Proposta irrevocabile d’acquisto (Irrevocable purchase proposal)2) Compromesso or Preliminare di compravendita or Promessa di acquisto (Preliminary agreement)and 3) Rogito (Final/Public act/deed)

1. Proposta irrevocabile d’acquisto - Irrevocable purchase proposal

The Proposta Irrevocabile d'Acquisto (irrevocable purchase agreement) is not compulsory. In fact, it represents a commitment or the intention by the prospective purchaser to block a property he/she is interested in.

Why the Proposta irrevocabile d’acquisto? Because it does not involve the disbursement of a large amount of money (usually ranging from € 2.000 to € 10.000, mainly depending on the value of the property) and because it enables all the surveys and searches on the property (title, the presence or lack of ties, liens, mortgages outstanding on it, the nature of permissions for building or extending the construction) to be performed, the time required usually being 2 to 4 weeks.

The legal inspections are carried out by the Notaio (Notary), who is a public official and the person responsible for registering the Final Public Act. He is therefore the pivotal figure on which the sale is centered.

The surveys regarding the regular nature of the building(s), extension(s), the matching of the would-be owner(s) with what is stated at the Registry Office, the identification of the property with what is found in the Land Registry Office are all carried out by a Geometra (Land Surveyor).

The fees for a Geometra vary depending on the complexity of the search performed, but usually amount to € 250/500.

Notary’s fees will be dealt with later. Some Notaries may request an advance payment to be settled at the time of the Rogito.

It is worthwhile specifying that if inspections and searches on a property reveal problems on same, the purchase cannot be completed and the purchaser is given back his/her deposit.

Always with regard to the deposit, if the purchaser decides to step back from the purchase (in the case of a property presenting no problems), he/she will lose the deposit (In Italian it is called Caparra and is of 2 types – Caparra Confirmatoria and Caparra Penitenziale. Their description follows); if the vendor makes that decision he/she will disburse twice as much.

Caparra: this is an amount of money given as a guarantee (a deposit)

Difference between Caparra Confirmatoria and Caparra Penitenziale: in both cases if the purchaser decides to step back from the purchase, he/she will lose the deposit; if the vendor makes that decision he/she will disburse twice as much. Where does the difference lie?

In the case of Caparra Confirmatoria the party who observes the agreement can take legal action against the party who withdraws from it to enforce the terms of the contract.

In the case of Caparra Penitenziale both parties agree in establishing that any of them can withdraw from the contract just by paying a sanction (the purchaser will lose the deposit, the vendor twice as much), thus avoiding any legal action. The most widely used type of deposit in private purchases and sales is the Caparra Confirmatoria.

2.Compromesso – Preliminary agreement

The "Compromesso", or Preliminare di Vendita (preliminary agreement of sale), is a legally-binding document which states the agreed sale price, the completion date (Rogito) and any rights the property has.

Once this contract is signed and the deposit (caparra) of 10-20% of the purchase price paid, the seller may only withdraw from buying a property if he pays twice as much the caparra (deposit) amount to the buyer or should the buyer wish to withdraw, he will lose his deposit.

The 'Compromesso’ is a standard contract which describes the property as it appears in the land registry. The seller also states that the property is unencumbered by legal or financial liabilities, and would be liable should any problem arise.

3. Rogito – Final/Public act

The final act is a contract that must be signed and finalized in the presence of the Public Notary, a public officer representing the Italian government and standing as a neutral party, thus ensuring the smooth running of the signing of documents and the acknowledgement of signatures on documents.

The Rogito/Final act is then registered in the Property Registry Office (Conservatoria dei Registri Immobiliari). The original Title of the property (the document entitling ownership to the property) is received by the new owner(s) within 1 to 2 months from the signing of the Rogito.

A couple of remarks on this stage:

- if the buyer does not understand the language in which the Rogito is drawn, the presence of a certified translator/interpreter is called for; the other option being the entrusting of power of attorney with a reliable person or a close acquaintance;

- the presence of both the vendor and the purchaser (or of those who act in their stead by means of the power of attorney) is necessary;

- the balance due by the purchaser to the vendor is settled before the actual signing takes place;

- All taxes (of which we provide an explanatory list below) and the notary’s fees are calculated on the basis of the Cadastral/Legal value of the property and not on the actual price paid for it.

Purchase of a 1sthouse, meaning a house where the buyer wishes to establish residence, (not a luxury one) by a private individual
Registry tax : 3 % of the Cadastral value (not the actual price paid for the property; this value is usually lower than the purchase/market price)
Fixed Cadastral tax : 168,00 Euro
Fixed Mortgage (nothing to do with mortgages) tax:168,00 Euro

Purchase of a 2nd house, meaning a house where the buyer does not intend to establish residence, (not a luxury one) by a private individual
Registry tax : 7 % of the Cadastral value (not the actual price paid for the property; this value is usually lower than the purchase/market price)
Cadastral tax: 1 % of the Cadastral value
Mortgage (nothing to do with mortgages) tax: 2 % of the Cadastral value

Purchase of a 1st house, meaning a house where the buyer wishes to establish residence, (not a luxury one) by a company (a building or restructuring company that resells the property within 4 years*)
VAT : 4%
Registry tax: 168 Euro
Cadastral tax:168 Euro
Mortgage tax: 168 Euro

Purchase of a 2ndhouse, meaning a house where the buyer does not intend to establish residence, (not a luxury one) by a company (a building or restructuring company that resells the property within 4 years*)
VAT : 10%
Registry tax: 168 Euro
Cadastral tax:168 Euro
Mortgage tax: 168 Euro

(*) If the company resells the property after 4 years the private taxing system (the one whereby a property is purchased from a private individual) applies.

Agricultural land (including rural buildings)
Registry tax: 15 %
Cadastral tax: 1 %
Mortgage tax: 2 %

Non agricultural land
Registry tax: 11%
Cadastral tax: 1 %
Mortgage tax: 2 %

A Power of Attorney is a legal instrument is used to delegate legal authority to another individual. The person who signs (executes) a Power of Attorney is called the Principal. The power of Attorney gives legal authority to another person (called an Agent or Attorney-in-Fact) to make property, financial and other legal decisions for the Principal. A Principal can give an Agent broad legal authority, or very limited authority. The Power of Attorney is frequently used to help in the event of a Principal's illness or disability, or in legal transactions where the principal cannot be present to sign necessary legal documents.

A roundup of all the costs involved in a purchase
Notary’s fees: they depend on the actual price paid for a property;
Geometra’s (Land surveyor) fees, if requested: around € 350, but it depends on the type of work performed;
Translator’s fees: around € 350.