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Buy a House in Italy - Step 2
By admin | June 9, 2008
The Contratto Preliminare
Once your mind is made up and the price agreed you will be required to sign a Contratto Preliminare (preliminary private contract) and pay the statutory deposit. This agreement between buyer and seller states the price, the date for completion, what is being bought and sold, and also includes various guarantees from the vendor that he owns what he is selling and that the property can be sold to you as described.
For example, if he states that there are no rights of way across the property then he must be able to transfer the property without any rights of way; if he cannot do so then he is in breach of the agreement and, if you are unwilling to accept the right of way, he must return double your deposit. However, for this penalty to be applicable it is essential that the deposit is described as ‘caparra confirmatoria‘.
With the passing of Law 296/2006 (Finanziaria 2007) certain modifications to the purchase procedure came into force as of 1st January 2007. Briefly these are:
The parties (buyer and seller) are legally obliged to register the Preliminary Contract (correctly called ‘Contratto Preliminare di Compravendita’ - referred to by some as the ‘compromesso’) at the Agenzie delle Entrate (tax office) within twenty days of the date of signing. The official Italian estate agency is equally held responsible (responsabile in solido) for the registration and the payment of the appropriate fees and tax.
What does this mean? Firstly, the preliminary contract must be drawn up in four original copies and signed by buyer and seller; one copy each for the parties and the other two for the registration. Within twenty days of this date there is a two-part registration to carry out. The estate agent may accept the task of doing this, receiving payment for expenses, and for clarity will undersign the four copies of the contract. The registration involves a visit to any bank and to any office of the Agenzia delle Entrate.
An amount is payable at the bank comprising a fixed, non-refundable, one-off sum of Euro 168 as registration fee (Imposta di Registro) and a variable amount equal to 0.50% of the deposit (caparra confirmatoria) or 3% of any other type of deposit paid before the completion (Atto notarile). This 3% also applies to any interim payments made between the preliminary contract and the completion - such as stage payments to a building company. However, the variable fee paid at this stage is deducted from the final tax bill at the completion. F23 is the official form (modulo) to be used for this part of the registration.
The original F23 stamped by the bank is to be taken to the Agenzia delle Entrate together with an original preliminary contract. Official stamps (bolli) with a value of Euro 14.62 each, are to be affixed applying the following rules: one stamp per four sides of the contract and an additional stamp for every one hundred lines over and above an original hundred. The bollo must be applied if the contract is less than four sides and an additional bollo if the lines exceed one hundred even if there are fewer than four sides. Each attachment must also carry a bollo. You may want to read this a few times! The Agenzie delle Entrate will issue a receipt which is to be presented to the notary.
It is very, very unusual for a deal to fall through after the preliminare has been signed because the deposit is relatively hefty, for a normal house 30% of the purchase price is fairly standard. With the requirement for the 0.5% advanced tax payment this habit may change. This means that the purchaser does not go into the contract stage lightly, nor does the vendor. If the purchaser withdraws through no fault of the vendor, the deposit is forfeit and, as shown above, if the vendor cannot meet the terms of the preliminare contract - or simply withdraws - then double the deposit must be returned to the purchaser.
Topics: Essential reading, The buying process |
December 8th, 2008 at 8:53 pm
Can you advise if this part of the process you have on your website is importnt or just a guide
>>’What does this mean? Firstly, the preliminary contract must be drawn up in four original copies and signed by buyer and seller; one copy each for the parties and the other two for the registration. Within twenty days of this date there is a two-part registration to carry out. The estate agent may accept the task of doing this, receiving payment for expenses, and for clarity will undersign the four copies of the contract. The registration involves a visit to any bank and to any office of the Agenzia delle Entrate.’<<
We have a contract with only 3 copies and I doubt if it went through the registratin process exactly as you describe therefore.
Is it a deal breaker in other words?
Very grateful for clarification of your guidance on this website
Many thanks
December 9th, 2008 at 3:11 pm
The ‘four’ copies won’t make or break the deal but it’s unsatisfactory as it means one of the parties has no copy! However, if the contract has not been registered it is an illegal transaction. There are still some agents (real and pretend) who don’t understand what’s needed in addition to some who just blatantly ignore the rules.