Mediterranean climate; authentic cuisine; incredible history, art, and architecture; and a slower pace of life – there are a huge number of reasons why many would want to stake a claim on a little corner of Italy. The European country has plenty to offer, from major cities like Rome and Milan to picturesque coastal towns like Rimini and Sorrento, Italy presents many options to explore. Whether you’re looking to purchase a vacation property, make a wise investment, or relocate for good, there are several important considerations and costs to take into account. This guide breaks down the main things you need to know as an American citizen looking to buy property in Italy.
Citizenship
As an American citizen, it's typically quite easy to purchase property in Italy, and contrary to common belief, it doesn’t require Italian citizenship. Reciprocal agreements between the US and Italy establish that American citizens can buy property in Italy as a non-resident (just as Italians can purchase property in the US), meaning that under a standard visa, you can typically stay in Italy for up to 90 days every 180 days. This is the ideal route if you’re planning on buying a second home or vacation property to use at certain times of the year. However, some visas entitle you to stay beyond 90 days, which may be worth investigating depending on the nature of your stay. Whichever route you choose, you’ll need to provide proof of your identity, income, and assets in your name, as well as the necessary paperwork and permits.
Mortgage
It is possible to take out a mortgage for a property you’re purchasing in Italy, but the process can be long and complex. First and foremost, mortgages can only be arranged for properties that are already habitable, so if you’re looking to purchase land or ruins to build upon, you’ll need to consider an alternative way to finance the purchase. There are several routes American citizens can explore to get an Italian mortgage. You can go through an Italian bank, although they don’t typically advertise mortgages for non-residents so it can be difficult to find out what’s on offer. Alternatively, you could consider a bank with branches in Italy; work with an independent broker or Italian mortgage specialist; or, in some cases, the vendor or developer of the property you’re purchasing may allow you to pay the value in installments over a period. Non-residents looking to secure a mortgage should be aware that they can typically only borrow 50-60% of the value of the property, requiring a 40-50% deposit. On top of this, there are arrangement fees and government tax to pay, which is usually 2% of the amount borrowed. In cases where the mortgage LTV or additional fees pose a barrier, you could consider remortgaging property you own in the US or in other countries to raise the money and secure your Italian home with a cash purchase.
Annual Living Costs
When calculating your finances for your move to Italy, there are other annual fees you should be aware of, on top of the obvious insurance, utility bills, and living costs. Non-residents are required to pay a local council tax, called the Italian Municipal Property Tax (IMU), twice a year. No paperwork is sent to request the payment or outline the amount – the onus is on the non-resident to make the payment at the post office, typically having enlisted a property manager or local accountant to help calculate the amount owed. There’s also a waste disposal tax (TARI), which is determined by the number of people living in the property and the footprint of the home. If you’re buying a property with shared areas, such as the pool, grounds, or elevators, you will typically be required to pay a condominium fee to cover the upkeep services and maintenance. This varies according to the size of the property and the shared facilities, but an average fee can be around €100 per month. Lastly, depending on where you’re planning to move to, mountain tax may also be applicable, which is usually a nominal amount towards the maintenance of the area.
Taxes
We have compiled a separate guide to property taxes in Italy, which breaks down each scenario and consideration in more detail. The taxes payable for a property purchase in Italy usually depend on your residency status; whether you’re purchasing from private owners or a company; and the ‘cadastral value’ of the property – its value according to Italian authorities. When buying from private owners, tax is typically around 9% of the cadastral value for non-residents and 2% for residents. If the property has a substantial amount of land, there is usually an additional tax payable - around 15% of its value.
Other Fees And Support To Consider
There are other services you’ll most likely need to factor into your move and costs, one of which is a notary fee, which is typically 1-2% of the property value. A notary is a qualified lawyer employed by the Italian government and is required in a house sale to register the legal transfer of the property from the vendor to the buyer. They’re responsible for preparing the deed of sales, establishing any charges or title issues on the property, and working with an architect or geometra to ensure that the property matches its official plans. This is not a structural survey and this is another cost you’ll need to factor in if you wish to have one carried out, however, this is not as common in Italy as it is in other countries. Other fees include payment to the Italian agent – typically 3-4% of the property value – and compromesso registration fees, which include nominal stamp and deposit fees as well as part payment of taxes. Unless you’re fluent in Italian and have a comprehensive understanding of the legal jargon, you’ll also need to enlist the services of a translator at the notary deed.
While there’s lots to consider in a move from the States to Italy, this should not overshadow the thrill and excitement that comes with the process. Ensuring you’re fully prepared and aware of the costs and considerations upfront makes the process smooth sailing so you can dive right in and enjoy your Italian adventure.
*This blog is for informational purposes only and should not be used as a substitute for professional legal advice.
