Italian purchase process update - new registration required

June 22nd 2007

The new financial law 2007 has brought many changes in the procedures and taxation on the purchase of properties.....

PRELIMINARY CONTRACT REGISTRATION

With the property law changing in Italy, one significant change to affect buyers is the registration of contacts. The preliminary contract (the so-called “compromesso”) now needs to be registered no later than 20 days from the date of signing of the contract. (the date stated on the contract).

There are of course charges for the registration, which consist of a stamp duty for each copy (14,62 euros) and a registration fee of 168 euros. These charges are set fees and the purchase price has no impact on them. These fees are not refundable.

A further charge is due if a deposit is paid and depending on the type of deposit, different charges apply as follows:

The registration of the preliminary contract has always been compulsory, but it has always been regarded as “not strictly necessary”, especially if these were agreed between private individuals, until the new legislation introduced in July 2006 when it has been made compulsory by notaries to list any payments and method of payment of the property on the deed of sale. Estate agents are now obliged to register the preliminary contract if they do not want to incur fines.

For buyers using a purchase proposal (Proposta di acquisto), it is also important to remember that this becomes effectively a preliminary contract when formally accepted in writing by the vendor and is therefore subject to the same regulations, taxes and registration procedures.

With regards to sales subject to VAT rather than purchase taxes (this is when you purchase a property from a company as opposed from a private individual), different rules apply and it is best to ask your estate agent for advice when purchasing.

Our Italy Manager, Eliana Andolfo is a qualified and accredited estate agent who supports clients throughout the purchase process, giving advice and guidance on contracts and fees applicable to the purchase, in addition to updating clients on any relevant changes to property law, which will affect them.