The first stage in buying a property in Italy is usually the signing of a purchase proposal this is drawn up and presented to the seller. On acceptance of the offer a preliminary contract is drawn up “Compromesso di Vendita” on the signing of this contract both parties are bound by the transaction so it is important any clauses are included at this stage.
The contract will include the closing date for completion and all conditions that must be fulfilled for completion. The timescale from signing the contract to completion is usually between 6 to 8 weeks. At the point of signing the initial contract a deposit of between 10 to 30% will be taken.
It is important for clients that the contract always has a mortgage clause which protects the deposits should a mortgage not be obtained. Independent legal advice should always be taken. Any mortgage clause should include what level of funds you will require, anticipated interest rate and lender if known. If the client has not already arranged the mortgage in principle the contract will give the specified time a client has to arrange the lending.
A soon as possible after signing the initial contract a fiscal number “Codice Fiscale” should be obtained as this will be necessary to present to the Notary at completion and will be needed for formal offer purposes by the bank.
It is possible to arrange a mortgage in principle prior to finding a property but a formal offer will not be available until after a bank valuation has taken place which will be after the signing of the initial contract. For valuation the banks will require a copy of the “Compromesso”, copy of the property plans, the fiscal number and the last sale title deeds. The property must comply with all municipal laws and have planning approval from the local authority.
Each property in Italy has a legal or declared price placed on it by the government this may differ from the purchase price and is the basis on which taxes are assessed. It is wise to ensure the declared price at Notary is alt least the local land registry price. Completion is always undertaken at the Notary.
Total costs of purchases are high in Italy and include.
- Stamp duty
- Notary fees
- Mortgage tax
- Estate agency fees
- Registry fees
These fees dependant on property can be as high as 15 to 20% of the property purchase price.
INTEREST ONLY Purchase and re-finance
80% Interest Only (Max 2 Applicants only must be financially linked)
UK, NI and Republic of Ireland CLIENTS ONLY
Maximum age |
Mortgage must be paid in full by age 80 |
Maximum LTV |
80% of valuation or purchase price whichever is the lower |
Maximum loan size |
n/a |
Maximum term |
30 (Minimum term 5 years) |
Repayment type |
Interest only for minimum of 1 year and maximum of 5 years. Followed by repayment for min 4 yrs to max 25 years. |
Compulsory products |
Buildings insurance is required and is free of charge. |
Bank arrangement fee |
€ 250 taken at 1st months payment |
Interest Rate |
3M Euribor + 1.8% (if LTV < 60% 3M Euribor + 1.5%) |
Rate review |
3 months |
Income criteria |
Current and new liability against gross income must not exceed; |
Redemption penalty |
0% |
Credit search UK |
Yes |
Mortgage title deed tax |
1% |
Notary and Registry fees |
0.25% for mortgage; 1%-2% in total |
Valuation costs |
€350 |
Buildings insurance |
Free of charge |
Monthly admin fee |
€7 |
CV2
REPAYMENT
80% Standard Repayment (Max 2 Applicants only must be financially linked)
UK, NI and Republic of Ireland only
Maximum age |
Mortgage must be paid in full by age 80 |
Maximum LTV |
80% of valuation or purchase price whichever is the lower |
Maximum loan size |
n/a |
Maximum term |
30 (Minimum term 5 years) |
Repayment type |
Capital and Interest |
Compulsory products |
Buildings insurance is required and is free of charge. |
Bank arrangement fee |
€ 250 payable after completion with first payment |
Interest Rate |
3M Euribor + 1.7% (if LTV < 60% 3M Euribor + 1.4%) |
Rate review |
3 months |
Income criteria |
Current and new liability against gross income must not exceed 38% |
Redemption penalty |
0% |
Credit search UK |
Yes |
Mortgage title deed tax |
1% |
Notary and Registry fees |
0.25% for mortgage; 1%-2% in total |
Valuation costs |
€350 |
Buildings insurance |
Free of charge |
Monthly admin fee |
€7 |
Italy products |
Maximum Percentage of purchase price subject to valuation |
Maximum Percentage of valuation |
Term |
Max Age |
Bank Fee |
Redemption penalties |
Repayment Basis |
Interest rate |
Product IT1
|
80% |
80% |
30 years |
80 |
€ 250 |
0% |
Interest only up to 5 years |
3 month Euribor plus 1.8% |
Product IT1 |
80% |
60% |
30 year |
80 |
€ 250 |
0% |
Interest Only up to 5 years |
3 months Euribor plus 1.5% |
Product IT2 |
80% |
80% |
30 year |
80 |
€ 250 |
0% |
Capital and Interest |
3 month Euribor plus 1.7% |