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First steps to buy property in Italy

In some cases, buyers need to provide a formal written offer to purchase a property and put a deposit in escrow to secure it. Legal counsel is highly recommended as the offer, if accepted, might become a legally binding contract.

Once an agreement is reached, the buyer’s solicitor and/or surveyor undertakes the relevant searches so the preliminary contract, or Compromesso, can be drafted. The Compromesso doesn’t transfer the title but sets out the details of the sale and gives the seller time to gather documents and vacate the property before the agreed closing date.

The buyer usually provides a deposit of 20 – 30% at Compromesso, a process dealt with by a notary who registers the transaction. The buyer will need to have an Italian tax code for this.

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Completion on an Italian property

Following Compromesso, the independent notary does a title search and prepares the final contract. Buyers can claim back twice the deposit paid if the seller has defaulted on the property’s mortgage payments, but a buyer would lose their deposit if they withdrew without a legitimate reason.

The final contract signing is witnessed by the notary. The purchaser then pays the outstanding balance and any other fees and taxes, while the notary pays stamp duty and other purchase taxes to the government on the buyer’s behalf

When looking to buy a property in Italy, it helps to have an Agreement in Principle – an agreement that sets out how much you are able to borrow from a lender. This can have a significant bearing on the acceptance of an offer and puts you in a strong position as a prospective buyer.

Some sellers won’t accept a mortgage clause within the purchase contract. In this scenario, speaking to a mortgage broker like Traverse International Finance, our chosen partner for mortgages in Italy, early on means they can include a mortgage clause within the Agreement in Principle.

In some instances, it’s possible to borrow up to 100% of the property purchase price using a combination of a mortgage and a Lombard loan. Get in touch with Traverse to discuss the financing options available to you.

Taxes and charges on property in Italy

Prospective foreign buyers should expect to spend between 10 – 12% of the purchase price when buying property in Italy. This is a combination of agent fees, property taxes, sales taxes (similar to VAT) and notary fees, as well as any potential extra costs, such as translation of documents.

Income tax is payable in Italy by all property owners on the theoretical rental income of the property during the year, although non-residents are only subject to it if the income exceeds a certain threshold.

The Imposta Municipale Unica, similar to the UK council tax, is collected by the local authority twice a year, and there are no capital gains taxes on the sale of a property if the transaction takes place more than five years after the purchase. Foreign property owners are advised to draw up an Italian will.

Understanding Italy's Visa Options for US Citizens

Your journey moving to Italy as an American starts with selecting the right visa. Assuming you are not an Italian citizen, you will not be able to stay in Italy for more than 90 days without a visa. US citizens have several pathways to attain a long-stay visa and establish legal residency in Italy from the United States, each designed for specific circumstances and lifestyles.

1. Elective Residency Visa (ERV)

• Ideal for retirees and financially independent individuals

• Requires proof of annual passive income: minimum €31,000

• No permission to work in Italy

• Valid for one year with option to renew

• Must show proof of accommodation in Italy

2. Digital Nomad Visa

• Perfect for remote workers and digital professionals

• Minimum income requirement: €28,000 per year

• Can live and work in Italy. However, must only work for non-Italian companies. You will not be able to accept job offers from Italian companies while under a digital nomad visa.

• Health insurance coverage mandatory upon arrival in Italy

• Initial duration: 1 year

3. Additional Visa Options

• Student Visa: Requires acceptance to an Italian educational institution

• Work Visa: Needs employer sponsorship and work contract

• Investor (Golden) Visa: Suitable for entrepreneurs and investors

• Family Reunification Visa: For joining immediate family members in Italy

The application process requires documentation submission through the Italian consulate in your US jurisdiction. Processing times range from 1-3 months, depending on the visa type and consulate workload. Each Italian visa category has specific requirements for bank statements, proof of accommodation, and health insurance coverage. You will need to provide evidence that you meet the requirements during the application stage.

Navigating Permesso di Soggiorno and Other Bureaucratic Processes After Moving

Your journey in Italy begins with obtaining a Permesso di Soggiorno (residence permit) within 8 days of arrival. You must obtain this essential document which validates your legal stay beyond your initial visa period.

Here's your step-by-step guide to securing your Italian residence permit:

1. Visit a Post Office

• Request a "Permesso di Soggiorno Kit"

• Complete the yellow-striped forms

• Pay the processing fee (€100-200)

2. Required Documents

• Valid passport with visa

• 4 passport-sized photos

• Proof of accommodation

• Proof of financial means

• Health insurance documentation

The Codice Fiscale serves as your Italian tax identification number. You'll need it for:

• Opening a bank account

• Signing rental agreements

• Accessing healthcare services

• Setting up utilities

Opening an Italian Bank Account Opening a bank account in Italy requires:

• Passport

• Codice Fiscale

• Proof of Italian address

• Proof of employment/income

• Initial deposit (varies by bank)

Popular banks for expats include:

• UniCredit

• Intesa Sanpaolo

• BNL

These three banks will invariably have branches in Italy within each major town. The processing time for your Permesso di Soggiorno typically takes 30-60 days. During this period, you'll get your receipt (ricevuta) from the post office serves as temporary documentation. Schedule your appointment at the Questura (police headquarters) as soon as possible, as wait times can extend several weeks.

Healthcare in Italy

The national health service in Italy, Servizio Sanitario Nazionale (SSN), provides citizens (and some foreigners) with free or low-cost healthcare that includes access to general practitioners (GPs), treatment at public hospitals, subsidised medicines, lab services, ambulance services and certain specialist care. However, it's important to note that most visa holders, including those on the Elective Residency Visa, are not automatically eligible for this public healthcare and are usually required to arrange private insurance coverage prior to receiving their visa approval.

Expats eligible for free healthcare in Italy through the Servizio Sanitario Nazionale (SSN) include:

1. EU citizens with a European Health Insurance Card (EHIC)

2. Non-EU citizens with a regular work contract or self-employed with a VAT number

3. Family members of the above categories

4. Unemployed individuals registered with the job center

5. Asylum seekers and refugees

However, in some cases, visa holders can elect to have paid access to the SSN. This option allows them to voluntarily register with the SSN by paying an annual fee, which grants them access to the same healthcare services as Italian citizens.

Although the SSN is a socialised system, regional governments manage it on a provincial level, resulting in varying standards of treatment across the country. Public hospitals in Italy's northern and central regions are known to offer higher standards of care than those in the south.

Private Healthcare

Private healthcare in Italy boasts well-trained doctors and is on par with the finest in the world. There are several impressive specialist facilities in large urban centres, while university hospitals are also highly reputable. Private healthcare allows individuals to avoid the queues and complications of the public system. It also enables provisions for more comforts and personal choice when it comes to doctors and facilities.

Private procedures vary in cost, although the Ministry of Health sets a minimum charge for all operations in this sector, which means it can be expensive. Health insurance is essential for those not eligible for public healthcare.

Health Insurance Requirements

EU citizens can use their European Health Insurance Card (EHIC) to access state healthcare during short-term visits. UK citizens can use their Global Health Insurance Card (GHIC), which replaced the EHIC for UK citizens post-Brexit.

Non-EU visa holders, including those on the Elective Residency Visa, typically need to have comprehensive private health insurance valid for their expected time of stay. This insurance must meet specific requirements, including a minimum annual benefit of €30,000 per individual, though some sources suggest the required coverage may be as high as €60,000. The policy should cover at least one year and include prescriptions, specialist visits, ambulance services, hospitalization, and repatriation. Additionally, the geographical coverage must extend to all European Union member countries.

Securing appropriate private health insurance that meets these criteria is essential not only to satisfy visa requirements but also to ensure adequate medical coverage during your stay in Italy. As healthcare systems and requirements can be complex, it's advisable to consult with insurance providers experienced in expatriate coverage and to verify the latest requirements with the Italian consulate during your application process.

Those requiring chronic or specialist treatment should also consider comprehensive private health insurance for peace of mind, choice of treatment centres, and comfort.