About Law of subrogation
One Italian law that property buyers should be aware of is the law of subrogation, according to which property debts, including mortgages, local taxes, utility bills and community charges, remain with a property and are inherited by the buyer.
This is an open invitation to dishonest sellers to make a great deal. It is possible to check whether there are any outstanding debts on a property and this must be done by your legal advisor a few days before completion.
It’s recommended to determine your finance before you start looking for a house and, if you need a mortgage, to obtain a mortgage guarantee certificate from a bank that guarantees it to you at a certain rate.
Under Italian law, you can withdraw from a contract and have your deposit returned if you’re unable to obtain a mortgage. You will need to pay a deposit when signing a contract and must pay fees and taxes of between 10 and 20 per cent of the purchase price on completion, although resident first-home buyers pay considerably less.
It’s customary in Italy for buyers to under-declare the amount paid for a property, although this practice is illegal. Remember, that if you under-declare the price, the authorities can re-value the property and demand that you pay the shortfall in tax plus interest and fines.
Seeking legal advice
It is important not to sign anything or pay any money, until you’ve sought legal advice in a language in which you’re fluent, from a lawyer who’s experienced in Italian property law.
You will find that the relatively small cost of obtaining legal advice to be excellent value. Trying to save a few euros on legal costs is not recommended when a large sum of money is at stake.
Your lawyer will carry out the necessary searches regarding ownership, debts and rights of way. He or she should also check that the notary does his job correctly, thereby providing an extra safeguard. It isn’t wise to use the vendor’s lawyer, even if this would save you money, as he’s primarily concerned with protecting the interests of the vendor and not the buyer.