Elective residence for real estate purchase in Italy

Once a suitable property has been identified, the foreign buyer must submit a purchase offer to the seller or the real estate agency managing the sale.

The real estate agency, which acts as an intermediary between the parties and facilitates the agreement, is compensated with a commission, typically 3% to 4%, plus 22% VAT. The buyer pays a commission, and in some cases, the seller may also be required to pay one.

By submitting a purchase offer, the foreign buyer makes an irrevocable commitment to purchase the property and provides a deposit (usually a “confirmatory deposit”)—for example, €5,000 to €10,000. If the buyer fails to complete the purchase, the deposit is retained by the seller. Conversely, if the seller defaults, they must return double the deposit to the buyer. The real estate agency is required to hand over the deposit cheque (which may be a bank cheque and not necessarily a cashier’s cheque) to the seller once the purchase offer has been formally accepted by all parties.

Once the seller accepts the offer, the transaction is considered concluded, and the next step is the preliminary sales agreement (commonly known as the “compromesso”).

The compromesso is a legally binding contract in which both parties commit to signing the final sale agreement and define its essential terms. A preliminary agreement is typically necessary because the final sale cannot yet take place due to technical reasons—for example, the buyer has not yet secured a mortgage approval, or the property’s urban planning compliance needs to be regularised. Nevertheless, the parties intend to create a stronger commitment than the initial purchase offer. At this stage, the buyer usually provides an additional deposit, either as a further down payment or as a portion of the purchase price.

If the buyer is particularly determined to acquire the property and there are no legal or planning uncertainties, it is in their best interest to provide a higher deposit to secure the seller’s commitment more firmly.

The next step, unless the buyer intends to pay the full price with personal funds, is waiting for mortgage approval. To obtain a mortgage, the buyer must approach a bank and provide financial documents demonstrating income stability and creditworthiness, along with the purchase offer, an updated property report, and any documentation proving past ownership transfers (such as inheritance records if the seller acquired the property through succession).

The mortgage can be obtained at a fixed or variable interest rate, depending on the applicant’s preference. Given the complexities of financial markets, foreign buyers in Italy should consult a financial advisor to determine the most advantageous mortgage option.

Once the mortgage is approved, an appointment is scheduled with a Notary to sign both the final sale agreement (known as the “rogito notarile”) and the mortgage contract. However, it is highly recommended to contact a trusted Notary as early as possible, rather than waiting until the final contract signing. A Notary’s early involvement can help resolve potential legal issues before they become obstacles.

With the rogito notarile, the property purchase is finalised, and the keys are handed over to the buyer. However, it is important to note that real estate transactions in Italy are legally binding upon agreement, meaning that the contract is concluded as soon as both parties consent—the key handover may occur at a later stage.

Any deposit payments made earlier are deducted from the total purchase price, which is typically settled through a cashier’s cheque. If a mortgage is involved, the remaining balance is paid directly by the lending bank.

This is the general procedure for purchasing real estate in Italy. However, between each stage, various additional processes take place, such as:

• Urban planning checks and land registry inspections, which should be completed before signing the preliminary contract.
• Applying for tax incentives (e.g., home renovation bonuses) if the property requires refurbishment, in which case a qualified accountant is essential.