Dreamer Real Estate has consolidated experience in medium and long-term lettings of prestigious properties in Italy. This FAQ list arises from the need that customers have a prompt and immediate response to frequent questions (type of tenancy, duration allowed, different clauses and costs incurred); to this end, Dreamer has decided to respond briefly to these questions as to provide a clear picture of the matter.
This is the standard tenancy provided for by Law no. 431/1998. The rent may be freely negotiated and fixed between the parties, while the duration is predetermined by law in eight years (i.e. 4+4) except in the case where the Landlord may request termination of the contract at the first expiry date in the event of the cases provided for in letters a) – g) of art. 3 of the above law.
It has a maximum duration established by the law of 18 months.
For contracts of duration equal to or less than 30 days, the rent and the distribution of charges are left to the free negotiation of the parties, and it is not even necessary to mention the reason for transience.
For contracts lasting between 31 days and 18 months, if the property is located in a city with a high population density (such as Florence), the rent is “bound” (as for the 3+2 beneficial contract) and it shall respect all local regulations within Regione Toscana, otherwise the rent shall be freely negotiated between the parties.
In order to be valid, it must contain the explanation and reasons grounding the transience of the tenancy (i.e., work or study relocation).
For properties classified as A/1, A/8 and A/9, listed properties and for tourist rent accommodations only, the law (art. 1, letter a, Law 431/1998) is liberal, allowing the parties to freely establish the contractual clauses, provided they are lawful. Only the provisions of the Civil Code (articles 1571 et seq. of the Civil Code) apply to these types of contracts, and not the residential tenancies (Law 431/1998).
The rent amount and the duration are therefore freely agreeable without limits, as long as they are not contrary to imperative rules of law.
They usually have a duration of up to 30 days but can also have a longer duration based on the circumstances.
The contract must relate exclusively to leisure, recreational or cultural purposes, carried out in a place other than one's habitual residence.
The rent and the additional charges are left to the free negotiation of the parties.
There is no obligation to register the contract if the duration is less than 30 days, but if the tenant is a non-EU citizen it is necessary to make the so-called “Dichiarazione di Ospitalità” (Declaration of Hospitality) to the competent territorial police authority.
In addition to the costs of registration of the contract which is to be split into equal parts between the Landlord and the Tenant, the Tenant is also responsible for the utilities’ costs (water, electricity, gas, waste disposal costs, etc. …), unless the parties agree otherwise as the utilities remain under the Landlord’s name and the Tenant refunds each month/year.
Since 2011 the landlord may decide whether to apply a separate tax of 21% on the entire amount paid by the tenant (or 10% for tenancies with an agreed rent) to the rents coming from the rental for residential use. The “Cedolare Secca” flat tax scheme replaces any ordinary tax scheme wherein 95% of the rents must be added to all other income and taxed at progressive IRPEF rates according to the income class.
Dreamer Real Estate bases its experience in real estate sales on a deep knowledge of the stages of buying and selling processes, allowing it to assist its customer from the formulation of a purchase proposal to the transfer of ownership on the property. To this end, Dreamer, thanks to the support of its team of professionals, provides a brief description of the most relevant aspects of the buying and selling processes, ensuring the customer a clear exposure of the steps to follow and the critical issues encountered in concrete cases.
Although the Italian law does not require the appointment of the agent to be in writing, Dreamer with the formalisation of its assignment intends to convey to the customer maximum transparency on the content of each clause of the agreement and the utmost professionalism throughout the entire sale process.
“Appointment for sale to Dreamer Only”, the only entity responsible for the sale of the property, during the period of the contract. Dreamer is committed to investing a dedicated budget in the promotion of the property subject to exclusivity, using all the tools in its possession in the promotion and marketing through both national and international channels.
Contract of agency to the sale given to DREAMER, intermediary in charge of the sale of the property not exclusively; in this case, the Vendor has the right to involve other real estate agencies or third parties to find possible subjects interested in the purchase of the property.
Contract of agency to the sale given to DREAMER, intermediary in charge of the sale of the property not exclusively; in this case, the Vendor has the right to involve other real estate agencies or third parties to find possible subjects interested in the purchase of the property. Dreamer will be the only entity authorised by the Vendor to advertise the property online.
This is the unilateral deed whereby the Promisor formulates a proposal to purchase a property on the terms contained therein. It is a negotiation practice aimed at giving certainty to the Vendor about the credibility and concreteness of the purchase offer. Usually, in fact, together with the irrevocable purchase proposal, Dreamer requires the Buyer/Promisor to deliver a sum of money which the latter shall transfer to the Vendor only in case of acceptance of the proposal. Such a proposal, which may have the most varied contents according to the needs of the parties, is irrevocable according to art. 1329 cod. civ. for a determined period of time within the Vendor may decide whether to accept it or not.
The Preliminary Sale Agreement is a contract with which the parties agree to close the final sale contract (cd. Rogito Notarile) at a later time.
In practice, the use of the preliminary sale is very frequent because it allows satisfying three distinct needs:
– to guarantee to the Buyer the so-called “confirmation effect” of the sale/purchase which is implemented by the transcription of the same in the Italian public real estate registers. As a result of the transcription in the public registers, the effects of the future transcription of the final contract shall be retroactive to the moment in which the transcription of the preliminary contract took place. Let's think about the hypothesis in which the Vendor sells the same property at the same time to two parties (thus committing a tort). Which of the two buyers is really the owner of the property? The one who first transcribes the preliminary contract in the public registers.
– to allow the parties to bind each other for the future, i.e., ensuring that none of them can escape the conclusion of the final contract, without being necessary an immediate conclusion.
– to allow taking advantage of the time between the preliminary and the final contract as to carry out several fulfillments, prodromal and functional to the sale such as mortgage application, moving, taking possession and more.
It is the act that transfers the ownership of the property. In case of prior transcription of the preliminary sale, the effects of the final deed are retroactive to the moment of the transcription of the preliminary itself. With the Notarial Deed, the Buyer can actually take possession of the property.
Italy means art and history. Since many of its properties have a particular historical/artistic prestige, they are subject to the constraint of cultural heritage ex L. 1089/1939 (as amended by D. Lgs. 42/2004, and subsequently repealed by D. L. 200/2008) and ss.mm.ii. For listed properties there is the right of first refusal to purchase by the Ministry of Cultural Heritage and Activities; therefore the Italian State, which must be informed of the sale of the property, may decide to purchase it, thus replacing the actual Buyer.
Therefore, the final deed of transfer of ownership of the Property will be subject to the exercise of the right of pre-emption by the Italian State.
equal to 9% (or 2% in case of first home) of the cadastral value of the property. The cadastral value is obtained by multiplying the cadastral income by the fixed coefficient of 115.5 (which becomes 126 in case of a second home). This tax is fixed at 200.00 euros if you buy from a developer.
exempt if you buy from a private individual. If you buy from a construction company, it varies from 9% to 22% (4% of the total price of the property, for the first house; 10% of the total price of the property, for the second house; 22% of the total price of the property, for a luxury house that is included in the cadastral classes A/1-A/8 and A/9).
If the company is not a builder the problem does not arise, with great satisfaction and savings for the buyer: no VAT, only registration tax calculated on the cadastral value.
Notary fees: The notary fees for the sale of a property are the sole responsibility of the Buyer. They vary from sale to sale depending on the area where the property is located, the total price of the property indicated in the deeds, the conclusion of the preliminary contract of sale, the possible conclusion of a mortgage.
Whoever buys a property in Italy as a “first home” can enjoy some tax benefits provided that he does not resell the property in the following 5 years. If he resells in the first 5 years and does not buy another “first home” within 1 year, he will lose the tax benefits obtained. The Italian Revenue Agency will then ask him to pay the higher tax due for the benefits received, plus the penalty and interest.
Dreamer Real Estate has a consolidated experience with international Clients, who decide to buy prestigious properties in Italy and often consider transferring their residence. These choices have inevitable consequences in terms of immigration and tax law issues, which make necessary the involvement of experienced professionals. Due to the significant amount of requests received from foreign Clients regarding residence opportunities, immigration procedures, tax optimisation, the flat tax applicable to “new Italian residents” and other questions linked to property investment in Italy (e.g. due diligence prior to the purchase of a real property aimed at checking the urbanistic regularity, etc.), Dreamer Real Estate has considered useful to provide an initial description of the most important aspects.
Investing in Italy today is convenient for foreign citizens also due to an important fiscal advantage. In 2017 a new tax scheme was introduced, named “flat tax”. It provides an optional method of taxation of all income produced abroad, by those intending to transfer their tax residency to Italy. These incomes are taxed with an all-inclusive substitute tax of € 100,000.00 per year, with the possibility of extension to family members, who will pay a tax of € 25,000.00 per year on income produced abroad. This benefit is revocable and valid for 15 years. Dreamer, in-network with its team of specialised professionals, is able to cover every information, management, and operational need of its customers, to whom it offers the possibility of resorting to personalised tax advice, able to assess the methods of structuring each transaction, optimising its tax impacts.
The current Italian immigration law discipline provides many kinds of permits. The requirements and the conditions for each category depend essentially on the nationality of the applicant since the relevant documentation that shall be attached to the application is specified in the agreements signed by Italy with the country of origin.
There are 2 types of residency permits in Italy: temporary and permanent permits.
TEMPORARY RESIDENCY – For NON-EU citizens, a temporary residency visa must be issued when first arriving in Italy. EU citizens must only register in the city where they live in Italy through the local police department. Both EU and NON-EU citizens must live in Italy for a minimum period of 5 years before applying for a permanent residency.
PERMANENT RESIDENCY – Permanent residency is available for those who have lived in Italy for the prescribed periods under the country’s immigration.
EU citizens can apply for permanent residency if they intend to live in Italy for more than 90 days or 3 months;
NON-EU citizens have the right to apply for permanent residency after 5 years of continuously living in Italy. The permanent residency visa for NON-EU citizens is also available under the “Fast-Track Visa Scheme”.
Since immigration in Italy for most non-EU citizens is limited by strict quantitative quotas established yearly by the Government (Decreti flussi), Law no. 232 of 11 December 2016 (Budget Law 2017) has introduced several exceptions to those limits, applicable to certain foreign investors who have significant financial resources to reside in Italy for more than 3 months. New Article 26-bis of Legislative Decree no. 286 of 25 July 1998 (Immigration Consolidated Act) regulates the so-called “fast-track” visa procedure: special entry visas (i.e. investors visas) and residence permits (permessi di soggiorno) will be available for two-year terms renewable, under certain circumstances for further three year periods, to non-EU nationals – regardless of the yearly quantitative quotas – intending to carry out significant investments in Italy.