Real estate law in Italy

General principles of Italian real estate law

Italian real estate law is based on the Italian Civil Code (Codice civile – CC for short), the national building code and other specific regulations. These laws lay down the basic guidelines for the use of land and the development of construction projects. The main aspects of these regulations include spatial planning, urban planning, building quality and compliance with environmental standards.

In addition, other laws define the rights and obligations of owners as well as tax obligations.

How is a purchase contract legally valid under Italian law?

This is particularly important to know: In contrast to German law, Italian law does not recognize the so-called principle of abstraction in the Codice civile (CC for short). In Germany, the buyer does not acquire ownership of the purchased item through the purchase contract, but through the separate transfer of ownership. In Italian law, on the other hand, the buyer generally acquires ownership of the object of purchase through the purchase contract.

Italian law does not distinguish between a contract under the law of obligations and a legal transaction in rem that is independent of it. This means that no additional actual act is required for the transfer of ownership. The agreement on the transfer of ownership goes hand in hand with the purchase agreement, meaning that ownership is transferred when the purchase agreement is concluded.

However, there are exceptions to this principle if the purchased item does not yet exist, if it is only of a certain type (e.g. a new vehicle of a certain model) or if a reservation of title has been agreed. In the case of generic items, ownership is only transferred when the item is individualized (“your vehicle”) or in another manner determined by the parties (Art. 1378 CC). In the case of an installment purchase with retention of title, the buyer naturally only acquires ownership of the item upon payment of the last installment of the purchase price (Art. 1523 CC).

Buying a property in Italy

To purchase a property in Italy, the buyer must go through several steps:

Inspection of documents:

The potential buyer should ask to see an extract from the property register (registro immobiliare) or – in the former Austrian South Tyrol – from the land register (libro fondiario) to make sure that the intended seller is actually the owner of the property and not just its occupant.

What other documents should a buyer check before signing the purchase contract?

• Cadastral extract of the property+ (visura catastale),
• Cadastral survey of the property (planimetrie catastali),
• List of encumbrances (visura ipocatastale)

This can be used in particular to check whether the property is free of encumbrances. The seller’s details and documents relating to the property should also be checked for accuracy (e.g. size, location, boundaries and buildability of the property, etc.),

• Use permit/habitability certificate (certificato di agibilità/abitabilità)
• zoning certificate (certificazione di destinazione urbanistica)

These documents prove that the building may be used for residential purposes. It can also be used to check whether the development complies with current regulations,

• Energy efficiency certificate (certificazione energetica)
• Deviations may occur in the land register system of the former Austrian South Tyrol. For example, an extract from the land register (estratto tavolare) is required here.

Irrevocable purchase offer:

An irrevocable offer to purchase (offerta irrevocabile d’acquisto) is made in advance of the contract. The irrevocable offer is based on Art. 1329 para. 1 CC: If the applicant has undertaken to maintain the application for a certain period of time, no revocation is possible.

Thereafter, there are obligations under Art. 1337 CC, whereby this standard requires the observance of good faith in the contract negotiations. In addition, Art. 1175 CC applies, according to which conduct must be in accordance with the principles of good faith.

There is a legal obligation if the purchase offer is accepted by the seller.

Preliminary contract:

A preliminary contract (contratto preliminare) is often concluded, which includes a down payment, among other things.

According to Art. 1351 CC, the preliminary contract determines the obligation to conclude a final contract. The requirements of the final contract apply to the form: however, a public deed or certified private deed is required for entry in the property register/land register in the case of property sales (Art. 2699 ff. CC).

The legally binding preliminary contract contains:

• The anticipation of the content of the final purchase agreement (designation of the intended property, the parties and the type of down payment, the intended remaining purchase price and the method of payment for this, a handover period, the determination of any encumbrances on the property, other provisions),
• special arrangements through deadlines, conditions, requirements,
• in particular: Determination of resolutory conditions (“rights of withdrawal”).

Notarization:

As in Germany, the final purchase contract is signed before a notary.

Purchase contracts for real estate are also valid without entry in the real estate register (simple written form in accordance with Art. 1350 CC). However, the contract only takes effect vis-à-vis third parties once it has been registered.

Entry in the property register or land register:

After notarization, the acquisition must be entered in the property register (registro immobiliare) or land register (libro fondiario) in order to secure the ownership rights. The property register of the province in which the property is located is responsible. Unlike the German land register, the property register is not organized according to land parcels (parcel numbers) but according to persons (owners). In the former Austrian province of South Tyrol, the land register system is different, according to which ownership of the property is only transferred upon registration.

Taxes and duties

Various taxes are also payable on property purchases in Italy, including land transfer tax (imposta sugli acquisti immobiliari) and value added tax (IVA). There are also other taxes and duties, the amount of which generally depends on whether the property is being purchased as a primary or secondary residence.

We offer individual and comprehensive advice on tax issues from our Italian experts, who can call in other specialists if necessary.

Legal framework and market peculiarities

The real estate market in the Italian coastal regions such as the Ligurian coast (“Cinque terre”) or the Costa Amalfitana and in Sicily and Sardinia is strongly influenced by the tourism industry. The list could go on and on, as the hotspots on the northern Italian lakes or in southern Italy (Ischia, Capri, Sorrento) as well as inland areas and major cities can also be mentioned. This leads to a high demand for vacation properties and can drive up prices in areas that are attractive to tourists. Construction projects are strictly regulated and approval procedures can be complex and time-consuming.

Att. Prof. (GTU / Georgien) Dr. phil. Stephan J. Lang