Oh, hello there. Welcome to Travelin’ Fools. My name is Kelsey Kay Love, and I’m here to give you a warm benvenuto to the Love Shack—name pending—our precious Italian condo by the sea!
If you were wise enough to watch our last video, you’d know that we just bought our very first property of life in the southern Italian town of Scalea, and I promised you I’d be back to chat about all the somewhat dull yet necessary aspects of property ownership, including the start-to-finish steps and timeline of buying a home in Italy as an American foreigner and nonresident. At the end, I’ll also do a full cost breakdown of our own property, including one-time fees and taxes, but also ongoing costs, to help you better understand how much you can expect to spend on top of just the property cost itself.
If sipping chilled Pinot Grigio on your own Italian terrace is the sexy part, this is the middle seat between 2 hairy crypto bros on the 14-hour flight to get here. If eating carbonara while overlooking a sea cave is the end goal, this is gutting the pig to turn it into guanciale to then put in the carbonara. Let’s begin…
Step #1 Get your Codice Fiscale
Starting with the assumption that you’re at least semi-curious about buying a property in Italy, the first step I’d recommend is getting your Codice Fiscale.
This is the Italian equivalent of a tax number, and is absolutely required to buy a property. One note: While I originally got mine last year in Puglia, for whatever reason, they did not include my middle name on the paperwork. So to avoid any potential legal issues, our real estate agent required me to have it amended here in Calabria before we were able to finalize the purchase.
Step #2 Select your Property
The second step—and arguably the most important one—is to find the right property. I’ve talked about the property search process a bit already, but there are two red flags I want to note here.
Red flag #1, assume the layout and floor plan will stay largely the same as they are now.
In Italy, even changes that seem small, like adding a bathroom or a closet, turning your empty rooftop into a terrace, adding a covered BBQ area to your own back patio, turning your attic into a loft, or even knocking down walls to create an open floor plan, require building permits and have to be legally approved by the local municipality, and also usually have to be removed or rectified if you ever want to sell the property without expensive fines and time-consuming legal complications later on. So unless you have many months slash years, not to mention infinite patience and money, do yourself a favor and pick a property with a layout you’ll be happy living in as it is now. And ideally one without a combined kitchen slash bathroom.
Red flag #2, unless you intend on buying multiple properties, do not plan on making multiple offers.
Choose a single property; make a single offer. Since we’ve never purchased property in the U.S., or any country before, we underestimated just how binding the act of making an offer on a specific property is, at least here in Italy. Which brings me to step #3…
Step #3 Make an Offer
When you’ve found your dream property—or your future nightmare, because it’s really too early to tell at this point—the third step is to make an offer in the form of a purchase proposal contract called a Proposta Irrevocabile Di Acquisto.
If it sounds like I’m pronouncing that wrong, it’s probably because I am. And there’s a lot more where that came from…
Now, just so you don’t almost have a heart attack and/or poop your pantaloni—as I did whilst scarfing down a cornetto at the Scalea train station at 9:07am—this is a formal offer, and also a legally binding one.
This is absolutely one of those scenarios where in my mind, we were casually dropping by the real estate agent’s office to say ‘You know that adorable pink property you showed us this morning? We love it! And we’re willing to buy it for €65,000.’ And he’d say ‘Certo, perfetto!’ and call the owners and have a very casual legal conversation about the exchange of both money and property, and then come back and say ‘Va bene, guys, they said sì! Now let’s start the legal process.’
And if you can’t see where this is going, let me just jump in here and ruin the surprise: this did not happen. Instead, we did indeed pop in to his office and make an offer for €65,000, and did indeed pop back out 27 minutes later having just signed our names on a binding contract with the word IRREVOCABLE at the top in all caps, that we did not fully understand was binding until the following morning on our way out of the country. Oopsie.
Semi-luckily for us, the owners rejected our initial offer and came back with a counter-offer of €70,000, which voided our first contract proposal altogether and gave us a little more time to get our lives, googling skills, and finances in order. If the owners had accepted our first proposal, and if we had then decided we wanted to back out without a valid legal reason, we could have been legally required to pay a nonrefundable deposit of 10% of the total purchase price. Ouch.
My advice: when you’re ready to make an offer, make sure there’s a clause in the contract—which may or may not require assistance from a lawyer—that the offer is conditional on a report by a local engineer or geometra, which is similar to a surveyor mixed with an architect, that confirms the title history, structural conformity, and cadastral conformity presented by the seller is correct. We got a quote from an engineer in Scalea for this service, and the cost was about €600. In Italy, notaries and real estate agents are not obligated to directly assess the property’s compliance with the paperwork, although our real estate agent assured us that the notary would not sell the property if there was any discrepancy. So… take that how you will.
I’d also advise you to think about hiring an electrician and plumber at this stage to do an inspection and ensure you’re not offering to buy a very large, very broken piece of shit. This is the time to ask about things like insulation, mold, whether there are water shortages in summer, the structure of the walls, condition of the pipes, etc.
Once you’ve signed the Proposta Irrevocabile Di Acquisto and officially made an offer, the seller then has 3 days to confirm they have received the purchase proposal, and 7 working days after that to accept or reject it.
Step #4 Pay the Deposit
If it’s accepted, you’ve made it to step #4, baby: too much champagne followed by stress-induced belly rumbles.
Step #4, you, as the buyer, have 3 days to transfer a deposit of 10% of the total purchase price, so in our case, €7,000, directly to the bank account of the seller.
Side note: if the seller accepts the offer, you pay the 10% deposit, and then they decide to back out of the sale, they are legally required to refund your deposit in full and you can file a claim to get back double the amount of your deposit.
Now, we have bank accounts at 3 different banks in the U.S., plus Wise and Revolut accounts for overseas payments, and from what I’ve seen, Charles Schwab offers the best exchange rates and least complications for large international wire transfers. You do unfortunately have to call in order to get the real time exchange rate, and just note that it’s easier to make international wire transfers from your Individual Brokerage Account, not your Investor Checking Account, if you don’t want to have to fill out any extra forms. All in all, the exchange rate from USD to Euros at the time of our purchase wasn’t terrible, but we still lost a little over $4,500. Boo. If we’d waited another month, that number probably would have been more like $7,000.
This could probably go without saying, especially if you’re so loaded you haven’t checked your bank account since 2011 or if you’re just shockingly bad at math, but it’s important to get your financial situation figured out early on in the property-buying process so you’re not gifting the bank more of your own money through unnecessarily high exchange rates, or worse, accidentally voiding your own contract while you’re waiting for money to transfer between your own accounts.
Keep in mind that since we paid for our property in full, I also can’t speak to how to do any of this if you need to get a mortgage, as that is something I’ve been purposefully, and successfully, avoiding my entire existence. Like genital crabs. And Carson Daly.
Step #5 Pay the Remaining Balance
At this stage, the hard part is mostly done… if you consider the hard part ‘understanding legal jargon in another language and legally promising not to sail away into the sunset’ and not ‘transferring the majority of your money to an Italian man you’ve never met via the internet’.
Step #5 is to have your real estate agent arrange a date to sign the final deed, and wire the remaining 90% balance for your property to the notary at least 10 working days before that date. As long as the date you sign the deed is at least 2-3 months later than the date you sign the purchase proposal, there does seem to be some flexibility here.
In our case, we signed the purchase proposal at the end of November and chose 4 months later, at the end of March, as the cutoff date to sign the deed. In reality, we managed to go from signing the purchase proposal to signing the final deed in just over 3 months, but this is something you’ll need to plan for in advance if, like us, you’re only allowed to spend 90 days out of every 180 days in the Schengen Area, and in this case, Italy.
We wired the remaining 90% balance from 2 separate bank accounts, and they did not care how much came from each account so long as the entire amount was paid.
Also at this stage, you’ll want to make sure you have copies of 3 key documents related to your property.
#1, the Certificato di Agibilita, aka the Certificate of Habitability. Remember y’all, we are breezing right on past the bad pronunciation today. This document is required if you ever want to rent out your property, and essentially states that it complies with safety, health, and sanitation regulations.
#2, the Catasto Edilizio Urbano, aka the Urban Building Registry, which mainly consists of a floor plan. This document provides the total square meterage, plus what category and class your property falls within, which is used to determine how much you pay in Municipal Property Taxes each year, also known as IMU. If you need help remembering what IMU is, just think of the giant flightless bird, which sucks potentially even harder than the taxes. I’m still not positive how this information is useful to me at this stage, but if y’all insist on knowing, our condo is categorized as A/2 and consists of 3.5 rooms. Also I hate raw onions and think Elon Musk looks like a dead blowfish.
And #3, the Attestato di Prestazione Energetica—aka APE or energy performance certificate—which confirms just how badly your condo is designed to the handle both the hot and cold, and also just the future in general. While our condo got an energy class rating of G, which is pretty okay on an A to Z scale, I do think I should mention that the scale is A to G, so… we literally could not have found a property that is less efficient or has less insulation… which is none. Just like no one always says, why be so efficient, when you can be no efficient.
While the EU’s eventual goal is to get residential buildings up to at least a class E by 2030 and a D by 2033, a who-knows-how-old study from a major Italian real estate platform showed that 55% of properties currently for sale in Italy are class G, so don’t let a terrible score on this one particular thing deter you. At least in southern Italy, you’re in good company. And while we have yet to test this, it may be more cost-effective to make upgrades yourself over time—like installing double-glazed windows and solar panels, and replacing old heating and cooling systems and water heaters—than paying substantially more for one of the roughly 12% of properties in Italy with a class A rating.
Step #6 Pay the Agent & Sign the Deed
Onto step #6: pay your real estate agent or agency and sign the Rogito Notarile, also known as the notarial deed. Our real estate agent charged a pretty standard 4% commission on the total purchase price and a 22% VAT, or value-added-tax, on that 4% commission.
Some real estate agencies offer up to three free days in an apartment when you’re coming specifically to sign the deed, so be sure to ask about that in advance.
On the day of the appointment to sign the final deed, we showed up to the notary’s office in Scalea with our passports, met our real estate agent and the sellers, listened as the notary read the deed aloud to confirm all of the details of the deal, and signed a bajillion papers in very clear cursive with our first, middle, and last names.
If you aren’t fluent in Italian, you are required to have a translator there so the notary knows you actually understand what’s happening and aren’t simply daydreaming about buffalo mozzarella on a warm, crisp pizza. You can hire a translator for this, or if you have an Italian friend, even better. If, for whatever reason, you cannot be there to sign the deed in person, you can grant someone—usually a lawyer—power of attorney to represent you during this step. And boom, you now have keys to your property in Italy, sugar buns.
The notary has 30 days to register the property transfer with the local land registry, and will provide the original deed and digital version within roughly that same amount of time.
But dear lord, is it time for a Spritz yet? Almost, amici. Almost.
After you’ve signed the deed, your next-to-last step, lucky #7, is to pay the notary both their fee and the various required taxes. Notary fees typically range from 1 to 2.5% of the total purchase price, but vary quite a bit based on which region and town you’re buying in, the specific services you require, and if you’re purchasing property as your primary residence—which can only really happen if you get your residency in Italy within 18 months—or as a second home.
Step #7 Pay the Notary & Taxes
And in the same and final wire transfer, we were also required to include the one-time Imposta di Registro, or registration tax, that is equal to 9% of the cadastral value of the property, and the fixed cadastral tax and mortgage tax of €50 each.
It’s very important to note here that if you think you will get your Italian residency within 18 months of buying a property, the registration tax drops from 9% of the cadastral value to 2%. Plus, you won’t be required to pay the twice annual IMU, aka municipal property tax, at all. Since I somehow doubt we will have residency sorted out in the next year and a half, we did the simpler, yet more expensive thing, and bought the property as a second home even thought we don’t technically have a first home.
Also an important note, the cadastral value of your property is the monetary value that the local authorities assign each property, and is usually far less than the actual purchase price. While our property cost €70,000, the cadastral value is listed at just €16,000. There are all kinds of hideous math equations to determine this number, but by far the best equation is to simply use your words and ask your real estate agent. Math complete.
Step #8 Transfer the Utilities & Move In
The last step is to transfer the utilities through a process called voltura, if you’re buying a place that does in fact have utilities, and ideally ones that already work. We did this for the electricity and water, and took care of gas and wifi ourselves.
Now, we planned ahead to get our electricity turned on before we arrived, but ended up having to pay to rent a separate apartment in town for a week because the previous owners sent the wrong meter number to the electricity company. So just remember that as much as you can try to plan ahead, summon your innermost Lorezapam and remember that it’s Italy and things will work out, just rarely on time.
There are of course other steps, like figuring out how to pay your taxes and utility bills when you’re out of the country, taking out insurance policies, figuring out how to get mail and packages delivered, buying furniture, and poorly translating words about your toilet to 3 different guys named Antonio, but I’ll leave that for the next video topic I regret.
Total One-Time Costs Breakdown
Before I fully stop caring, which is any moment now, let’s go through the total cost breakdown for the property, commission, fees, and various taxes, but also a rough estimate of ongoing annual costs, so you can hopefully have a better understanding of exactly how broke you’ll be once it’s all said and done. Here we go.
Our 2 bed, 1 bath condo on the coast of Scalea cost €70,000. We paid our real estate agency a commission of 4% of the total purchase price + 22% tax on that 4% commission. We paid the notary a fee of 1.9% of the total purchase price, plus a €300 transfer fee for using their bank account since we can’t legally have our own in Italy as nonresidents. Finally, we paid all the one-time taxes—including registration, cadastral, and mortgage—for a grand total of €76,300. If you’re keeping score, that’s about 9% on top of the property cost in fees.
Annual Costs Breakdown
Next, let’s look at our ongoing costs. We will pay annual condo fees, which go toward I don’t know what yet. Then we’ll owe two kinds of tax every year: the trash or waste tax, aka TARI, plus our property taxes, or IMU. And because we do not have Italian bank accounts and are also not legally allowed to be in Italy for at least half of the year, we hired a local service to help us pay our utility bills and taxes while we’re gone. And lastly, we took out an insurance policy with the local Allianz office in case there is a fire, flood, or earthquake.
Or if someone figures out how to scale our gate specifically to jack Sophia, my sick ass tricycle. Or our toilet decides to spontaneously burst, covering our floors in mysterious liquids and highly unfortunate smells. Or if trying to perfectly execute the choreography for ‘Oops I Did It Again’ in the shower leads to a leak in the downstairs neighbors much less fun bathroom. We estimate ongoing costs at around €1,200 per year, although we will obviously owe utilities on top of that. Since I have zero idea what to expect in terms of electricity or water—gas and wifi are seemingly very reasonable—more on that later.
Keep in mind that we did not hire a lawyer.
We did not have the property inspected by an engineer or geometra, or an electrician or a plumber.
We did not shop around for notaries.
We have not applied for a long-term visa to live here more than 90 days at a time.
Basically we have not done our due diligence at almost any step of this process, and things have seemed to work out just fine. In my next life, maybe I’ll be more cautious, but in this one, nah.
Catch ya next time, buds. Ciao.
