The Legalities of Buying A House in Italy

To move the whole process along, so we can get to construction as soon as possible, we’ve started on two paths that will converge with a preliminary written purchase agreement.

Two pathsPath 1 is the design process. It got off to a quick start and we’ve developed a plan we like within about a week from the end of our trip. Path 2 is the writing of the agreement and all the background research that needs to be done as due diligence. Path 2 depends on Path 1, because one of the key purchase contingencies is a positive “opinion” from the town planning department, saying that our design is suitable and the house and a pool can be built on the property.

One important element of this approval will be the “look and feel” of the house and property. Local and regional planning codes are designed to maintain the integrity and beauty of the landscape.

This morning, the spoke via Skype with Giovanna, a lawyer who Kevin recommended. She’s based in Civitanova Marche and does real estate law. Plus, she speaks English and Italian.

My First Conversation with Giovanna

We covered the basics, like our need for the codice fiscale, the tax ID number. But, contrary to what I have been reading online, she recommended that we wait to open a bank account. She said we didn’t need it at this stage. Wire transfers would be fine. (A topic to revisit.)

Her description of the selling process mirrored my understanding.

Taxes and fees also seemed in line with my research, but she raised an important point about becoming a resident. While we could have a VAT/IVA rate on the construction costs of 4% as a resident vs. 10% as a non-resident, we would also become responsible for income tax on all our income worldwide. Hmm. Would we be saving a little on the building tax, only to pay more later in income tax? (Later, I dashed off notes to our accountant and our financial advisor, asking them if they knew an expert on Italian taxation. A long shot, but we need advice. Stay tuned.)

Before we wrapped up, I asked if she wanted me to make a deposit to secure her services. She said she would be prefer to be paid at closing, in accordance with her previous email, which estimated her total fee as €3,500 – €4,000.

After our call, but confirmed by email our desire to use her as our legal representative on the property purchase. I think we’ll need her further, for the arrangements around the construction, but first things first.

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Our House Plans Are Ready for an “Opinion”

This has been a busy week working on the floor plans, and we’ve made a lot of progress toward having a design we like and that can be submitted to the local government for approval.

house blueprint of floorplan with pencil and rulerMonday morning we received two options for designs at our desired size of 190m2. These were based on the original concept plan at 160m2 and our general design direction. We wanted some room sizes and placements adjusted.

Wednesday morning the email brought a new set of plans. These had our desired changes and were just about what we were looking for. We had a couple of minor changes, but one big question: was a hallway between the entry and the main room wide enough at 1.00 meter (3.3 feet)? And, if not, could we widen it without making a mess of the plans?

The possible problem was that the space was constrained by structural support columns on one side and rooms that we felt were already at minimum width on the other.

Today’s version brought good news. By sliding the columns over about a third of a meter and making the stairway just a tiny bit steeper, the architect was able to give us a hallway of 1.35 meters (just shy of 4.5 feet.) Now I think we’ll have a nice wide connection from the front door into the main room.

Design for a house in Le Marche
“Approved” option

Also adding to the open feel we want will be the ceiling heights. On the ground floor, we’ll have 2.7 meters (8.9 feet.) On the top floor, they will peak at 3.5 meters (11.5 feet) and be 2.5 meters (8.2 feet) at the walls.

We also got a door from the kitchen on the front of the house — Anne and I had considered it but not mentioned it. This should make it easier to bring in groceries and supplies. It also opens up the possibility of storing firewood outside that somewhat hidden corner of the house.

exterior drawing of house in Italy

We’ve all but got the plans we’re comfortable going forward with. Just a clarification that all three openings on the view side of the house are French doors and we feel we’re set for now.

Next steps? Details and timing unknown, but from what we understand it’s a trip by Kevin to the town planning office. He’ll ask for an “opinion” whether we can build this house and a pool on the plot. The right head nod, without too many “I say you need to change this or I’m not earning my pay” kinds of comments should give us about a 90% assurance of final approval of the complete plans and blueprints. Or that’s what we’re told.

After the flurry of activity this week, I think we’re in for some waiting.

First mage source: License: CC0 Public domain. Free for commercial use. No attribution required. Other images: Copyright Our Big Italian Adventure

Progress on Our House Plans

Earlier this week we received two proposed designs for a 190 square meter (about 2000 square foot) two story house. (All these numbers are as quoted in Italy: gross size including the exterior walls.). There were elements of both designs that we liked.

home architect's toolsNote: in all of this, we were constrained by the 190 square meter limit. The amount of space we could build is based on the size of the original building, now a ruin, that is on the property. So we’re making trade offs and shaving a dimension here and there to make the plan fit.

Option A

This had a good general design on the ground floor: lots of open space; kitchen/dining room, living room, and master bedroom all on the “view” side of the house; good sized baths and laundry/utility room. The biggest change it needed was to expand the study/fourth bedroom by taking space — but not too much! — from the master bedroom. It could also be improved by rearranging the kitchen and dining space and removing an interior wall to open the space up even further.

Option B

The biggest strength to option B was the sizes of the two upstairs bedrooms. While option A had one large and one small bedroom, option B had two rooms about the same size. In addition to the main terrazza that was in both plans, B also included a small terrazza off one of the bedrooms — a nice little touch.

We discussed our options with our general contractor Kevin. We decided to work from the option A design and try to redo the top floor to include option B’s strengths. Off he went to the architect.

Floor plans for a country house in Italy
Revised plan @ 190m2 Click image to enlarge

This morning we awakened to find a new set of plans in the email. Happily, on the whole, they addressed the issues I mentioned and in a good way. The ground floor study was enlarged a bit and the main area rearranged. On the top floor the bedroom sizes had been adjusted and we even had space for a linen closet.

We had a couple of small tweaks to this plan: French doors instead of a window in the master and a smaller window in the kitchen to provide wall space for cabinets. We also identified some missing information, in particular the ceiling height and the shape of the corner fireplace. (It was drawn as a trapezoid.)

However, we noticed one measurement that gave us pause. The hall from the entryway to the main room was exactly 1.00 meter wide. This isn’t a long hallway, but that seemed to be a bit narrow — but maybe not. We measured some openings in our current house and couldn’t tell for sure. Maybe that’s standard in Italy.

So today’s plan went back to Kevin and the architect, mostly with just the question about this entry hall. We’re hoping to feel comfortable with this 1.00 width, as we have an absolute constraint of one of the structural pillars defining the space, so to widen this opening might mean a total redesign. That’s not what we want to do, but we don’t want to be disappointed later.

First mage source: License: CC0 Public domain. Free for commercial use. No attribution required. Other images: Copyright Our Big Italian Adventure

Designing the House: A First Pass

One of the things we were looking for in a house was an open floor plan on the ground floor. It’s not that easy to find. On my first exploratory trip in 2015, I looked at 39 houses, and thought 5 had some potential overall. Only one of these had an open plan.

imageI think there are three reasons it’s hard to find this feature. First, in virtually all of the older, restored farmhouses, which were made of stone, there were interior load-bearing stone walls. If those were to be removed, steel beams needed to be inserted, which would have been fairly expensive. Second, the structural restorations were done a number years ago, when open floor plans weren’t as common, especially outside of the US. Third, many were redone with the idea of renting part of the house to tourists in the summer. That meant dividing the house into apartments and having multiple kitchens.

This year, based on this goal, we saw two finished houses with this feature and two “shells” — houses that had been structurally rebuilt on the exterior but were open inside, except for a few load-bearing columns. We also were shown a plot on which we could build from scratch a house with the open interior we want. All of these were situated to provide wonderful views across the Marche hills.

As Anne has mentioned, we chose this last option.

Home design concept in Le Marche Italy
Original option @ 160m2 Click image to enlarge

As part of this option, we were presented with plans for a 160 square meter house (about 1700 square feet) that had already been approved for this location. It had the added feature of a ground floor master suite, which would let us live on one floor when it’s just the two of us in the house, without the need to heat the top floor. (I’m avoiding mentioning that it also reduces the need for my knees to go up and down stairs.)

We had a couple of issues with this design. First, it gave us only three bedrooms, with no space for an office/study which could be used as another bedroom. Since Anne is envisioning constant guests, she wanted this extra room, ideally also on the ground floor. Further, some of the rooms seemed a little small.

Fortunately, we were told that on this plot we should be able to build up to 190m2. (The amount you can build is based on the size of any existing buildings on the land. This plot had a tumbled-down house from which we could “reuse” the space). Interestingly, we could only build within 100 meters of the original building. There are a lot of regulations designed to preserve the character of the land and environs. Overall a good thing, but it does add a whole host of constraints.

Italian house floor plan
Option B @ 190m2 Click image to enlarge
Italian home design in Le Marche
Option A @ 190m2 Click image to enlarge

Earlier today, we received two proposed designs for a 190m2 house. As you’d figure, we liked the ground floor of one option, the top floor from the other. Since the two designs have different exterior shapes and different stairway locations, we can’t just plop the two floors together. Also, we had a few suggestions about room placement and size.

You never know how someone who has designed a house — or even been involved in the design — will react to proposed changes. Would they think we were destroying their perfect design, thinking we were unartistic slugs, and then unenthusiastically attempt to make changes? Or would they understand that it will be our house, not theirs, so let us go ahead and change it to fit our desires? (I feel like I’m back working with creatives from an advertising agency.)

It’s probably helpful that we have an intermediary between us and the artist, our real estate agent/general contractor Kevin. I talked over our ideas with him. I got no push-back, just some “options to our options.” He’s off to talk to the architect to see what they can come up with.

First mage source: License: CC0 Public domain. Free for commercial use. No attribution required. Other images: Copyright Our Big Italian Adventure

Let’s Play Hide and Go Seek, Italian Style How Buying Real Estate in Italy is Different From the US

It’s not as easy to identify potential houses in Italy as it is here in the US. We have a “multiple listing service” or MLS, where essentially all properties for sale are in one big database. It doesn’t matter who the selling agent is. If it’s on the market, it in the MLS. And from that, on Zillow, Trulia,, etc.

This makes it easy for a buyer. You just access this data and see what you can find. It’s all there. You can also see what has sold for what price. All this leads to a pretty efficient market, in economics-speak.

Needles in Haystacks?

Not so in Italy. There is no equivalent system. It does matter who the selling agent(s) are, because it only shows up on their websites(s). And you have no history or way to compare prices.

imageNote that I’m saying it might be agents, plural, not just agent, singular. The same property can be listed by multiple agents. It all depends on the seller, and it’s generally in the seller’s interest to have multiple agents on the job. (Twice, on my original trip, I was taken to see a house that, when arriving, I realized I’d seen with another agent. The descriptions and pictures were different, so I thought it was just two houses in the same general area.)

So to identify properties you need to identify agents. As you expect, you do this by web search. You can search for “Marche real estate”, for example. You’ll find a number of agents and you’ll discover the portals, and (These sites take what I believe are paid listing from agents and kind of simulate an MLS system. But not very well.) From the properties listed, you identify agents. Then you go to the individual websites and see what they have for sale.

There is another way to find a house, but it’s not easy. You try to identify a house on your own, offered by a private seller without an agent. If you have good connections in the expat community, you might find a house another expat wants to sell. Or, if you’re fluent in Italian and lucky, you might hear about a house by asking around in local villages.

It’s Gonna Cost Ya

The total real estate commission on a sale is similar to the US, usually somewhere in the range of 4%-6%. But, instead of all being paid by the seller, as is our practice, it’s split by the buyer and seller, with what you pay based on the rate charged by your agent. In our case, our agent Kevin charges buyers 4%, with a minimum commission of €7500. (Also, on the commission you pay the IVA value-added tax of 22%.)

I’ll admit to not being fully aware that Kevin’s rate was above average when we started working with him last year, so we didn’t try to negotiate the rate. Maybe he wouldn’t have negotiated, anyway, since we would have been in a weak position: say “no” to his rate and then we’d not have access to his listings or have to work hard to identify another agent who had the properties. And of our list of 39 properties last year, Kevin represented more than any other agent, about 8 if I recall correctly. So, we might have missed out on some good choices.

What Will It Take To Put You In This House Today?

Finally, when evaluating prices and what you “should” pay, you’re in the dark without knowing what similar properties have sold for. Your data is just the houses you’ve seen and the asking prices. And asking prices seem to be all over the map. It’s not uncommon for a house to be reduced dramatically in price, by fifty, a hundred, two hundred thousand euro all at once. Is it now a good deal? Or if they were off on the price by that much before? Are they still too high?

(When I was getting a feel for the market at various price points last year, I saw a house in Tuscany listed at €750,000. I liked it, but told the agent it was at least €200,000 too high for us. She then asked, “If I can get them to sell it at €550,000, will you buy it?” I think she thought that it was a real possibility that they would take that price.)

So, with “hidden” inventory, buyer commissions, and “shot in the dark” prices, you could say the Italian free-for-all system makes it harder on a buyer all around.

Image source: License: CC0 Public domain. Free for commercial use. No attribution required.