NOTARIAL SERVICES FOR FOREIGNERS IN ITALY
When does one need a notary?
The areas covered by Italian notaries are mainly:
a) the purchase of a house or other real property;
b) the formalization of a mortgage contract with a Bank;
c) the preparation of powers of attorney so as to be represented by a third party;
d) changes to property arrangements between spouses;
e) applications to a court for authorizations regarding minor children;
f) donation of assets;
g) setting up of and changes to companies, and all relevant legal documents;
h) acceptance and use of foreign public documents.
This stark but necessary list, however, does not give much of an idea. It may be more useful to recall that an Italian notary, according to our best traditions, is an artisan of the law and not a cold applier of rules. The notary is, by definition, a professional who is close to families and businesses, an artisan of the law who works with words the way a potter works his clay, creating suitable legal solutions for avoiding future argument and bitterness. Because this is the true task of the notary: to prepare solutions that at the same time satisfy the law and the intentions of the parties, thus discouraging any future litigation.
In general terms, our law permits the purchase of real estate by foreigners in the following different ways:
1) non-resident foreigner: only if covered by an international treaty or there is a reciprocal arrangement whereby his country of origin allows an Italian to purchase a house;
2) "resident" foreigner, his family members and stateless persons resident in Italy for less than three years: with a temporary residence permit for specific reasons or a long-term residence permit;
3) citizen of the EU or EFTA or a stateless person resident for more than three years: no limit.
It is evident, then, that it is necessary - in order to know which documents are actually needed in order to acquire rights in Italy - to identify to which of these categories the foreigner belongs.
Tax relief for foreigners on the purchase of a so-called “primary residence” ("prima casa")
Italian law attempts to facilitate and encourage people to buy their own primary home (their so-called “primary residence” "prima casa") through various reductions in taxes for the purchaser. Specifically, at the time of purchase, the purchaser pays 3% (stamp duty) if he buys from a private person or 4% (VAT) if he buys from a company (except for a few odd cases), plus a fixed charge for registering the transfer and mortgage (presently a total of Euro 336.00).
A foreigner, too, may take advantage of “primary residence” tax relief if he has the requisite qualifications, which are obviously the same as for Italians. Article 40 of the Unified Text 286/98 provides for the so-called right of access to a primary residence (for more on this, see "House Purchases"). Resident foreigners registered with the official employment agency or who are employed or self-employed have a right of access, on the same terms as Italian citizens, to public housing and facilitated credit for the building, purchase or rental of their primary place of residence. Other tax benefits linked with the purchase of a “primary residence” have to do with the income tax deductibility (to a certain extent) of interest paid on mortgages taken out for the purchase of a so-called primary residence. Finally, income produced by the “primary residence” is not subject to income tax.
The Foreign Ministry's website makes clear that “in the list regarding the condition of reciprocity for the purchase of real estate, there is no mention of mortgages which, unless otherwise stipulated, need no further checks on the condition of reciprocity, such transactions being linked to the purchase operation”. Hence it is not necessary to check the existence of reciprocity regarding the stipulation of mortgages in the absence of an express indication to the contrary.
Companies, associations and other operations
A foreigner may set up a company in Italy, create an association, or undertake any other operation on the same conditions mentioned for the purchase of a house. With one caveat: reciprocity may exist only with regard to certain matters. If, for example, in a particular country an Italian may set up a company but not buy a house, a foreigner from that country (not officially resident in Italy) may set up a company in Italy but not buy a house.
Preparing a power of attorney
A person may not always be able to express his intentions directly: for example, because he is abroad or far from the place in which he is supposed to sign a particular deed or contract. In such cases, it is possible to use a power of attorney, i.e. a document giving another person the power to undertake a material or legal act in one's stead. For example, if a husband is abroad and a purchase contract for a house must be signed urgently, the husband – before he leaves or from abroad – may give his wife a power of attorney so that the wife can sign the contract for both of them. If the power of attorney comes from abroad, it will be subject to all the rules governing foreign legal documents.
Last will and testament
A foreigner may make a will, i.e. indicate in an official document to whom he intends leaving his property after his death.
A foreigner may give away assets during his lifetime, i.e. make donations.
Foreign legal documents
Foreign documents are those issued abroad by a foreign authority, even if they are in the Italian language, which in order to be used in Italy require legalization or an apostille. In this sense, a document prepared by an Italian consulate or ambassador abroad is not “foreign”, even if the parties are foreign. If it is written in a foreign language, the foreign document must also be accompanied by its “translation”. More precisely, the obligation to legalize a foreign document is currently stipulated in Article 33 of the Unified Text of 28 December 2000 no. 445 (on the subject of administrative documentation). Based on this regulation, in summary, for documents issued abroad:
- by a foreign authority: these are legalized by the Italian diplomatic or consular authorities in the country in which the document is issued;
- by our diplomatic or consular offices: these do not need to be legalized. Our consuls may accept documents: between Italians; between Italians and foreigners; or even between foreigners, if the documents are destined for use in Italy.
Exceptions are made for cases covered by international treaties that specify differently (the Hague Convention of 5 October 1961). If “foreign” documents are written in a foreign language, they must be accompanied by a certified translation done by our diplomatic or consular authorities, or an official translator (in practice, this figure does not exist; so it will be a reliable translator such as: a translator registered with the Tribunal; or a competent Public Official such as the notary public himself, as is expressly authorized in Article 68 of the Regulation of Notaries).
Translation of foreign legal documents
If a foreign document is written in a language other than Italian, it must be accompanied by a translation into Italian certified as conforming to the foreign text: done either by the competent Italian diplomatic or consular authority, or by an official translator (who may also be an Italian notary who knows the foreign language).
Lodging with a notary
The “formal” lodging of a deed with a notary, whether required by law (Article 33 of Presidential Decree 445/2000; Article 106 of the Notary Law) or requested by an individual, is intended first of all to impose a control on the legitimacy of the document lodged (i.e. a check that its contents do not contravene mandatory legal rules) and also to ensure its conservation over time. Checks on the contents of foreign documents, however, must be made with reference to so-called international public order, that is to say with the prohibition on receiving for filing foreign documents which violate principles that Italian law considers fundamental for the maintenance of its own political, economic and social structure.
Legalization is indispensable for a foreign public document to be valid in Italy. It consists only of the official certification - by the competent Italian consular or diplomatic authority abroad – of the legal status of the public official (or functionary) who has signed the document and the authenticity of his signature. If the document is issued by a foreign authority in Italy, it must be legalized by the Prefect in the district in which the foreign authority is located (except for the Aosta Valley, where this is a responsibility of the President of the Region, and the Provinces of Trento and Bolzano, where it is the responsibility of the Government Commissioner). Legalization, on the other hand, does not guarantee the validity or force of the document in its country of origin, and in this sense it is much less than a notarial certification, in that legalization (like an apostille) entails no check on or acceptance of the content of the document. Lack of legalization, then, means that the document (though valid and with legal force in its country of origin) is not legally valid in Italy and may not be used by a notary. In particular, a foreign public document is not valid as such but merely as an unauthenticated private document. If an Italian document must be used abroad, legalization – if requested by the foreign authorities – must be done by the Procurator of the Republic at the Tribunal in whose jurisdiction the notary is located who receives or authenticates the document. The signature of the Procurator of the Republic, in its turn, is legalized by the foreign Consulate responsible for that locality. This is stipulated in Articles 30-31-33 of Presidential Decree no. 445 of 28/12/2000, which came into force on 7 March 2001. Legalization is not necessary when the country from which the foreign public document was issued is a signatory to the Hague Convention of 5/10/1961 regarding apostilles, or a bi- or multi-lateral international convention that obviates the need for it. The Brussels Convention of 1987 on the exemption from apostilles in relations among countries of the European Union has not yet been ratified by all countries in the Union, and is therefore in force only among a number of them (for now only in Belgium, Denmark, France, Ireland and Italy).
This is a simplified – but absolutely rigid - form of legalization (in the sense that it must have exactly all the formal characteristics stipulated in the sample attached to the Hague Convention of 5/10/1961 which governs it). It is valid in all the countries that have signed the Hague Convention of 5 October 1961 and replaces legalization amongst those countries alone. Like legalization, an apostille may be indispensable for a foreign public document to be valid in Italy. Like legalization, an apostille consists of the certification of the legal status of the public official (or functionary) who has signed the document and the authenticity of his seal or stamp. It does not guarantee the validity or force of the document in its country of origin. Each signatory country indicates which authorities are responsible for issuing the apostille. As far as Italy is concerned: notarial and judicial documents and those attesting marital status are certified by the Procurator of the Republic at the Tribunals in whose jurisdictions the documents are created. For administrative documents (signature of the mayor etc.), instead, it is the responsibility of the Prefect of the place in which the document is issued (exceptions are the Aosta Valley, where this is a responsibility of the President of the Region, and the Provinces of Trento and Bolzano, where it is the responsibility of the Government Commissioner). An apostille is not necessary when the country of origin of the foreign public document is a signatory to a bi- or multi-lateral international convention that obviates the need for it.
Property regimes between spouses
A property regime is the set of rules that govern property and the manner of administering assets belonging to a married couple so long as the marriage lasts and when the marriage ends for any reason (death, divorce). In other words, the property regime stipulates the rights that each spouse has over assets acquired (by one or other of the spouses or by both) during the marriage, both for the duration of the marriage and in the case where the marriage ends. In Italy the “normal” regime established between married couples (unless they expressly choose differently) is “joint legal ownership” of the assets. The spouses may however choose the “separation of assets” (not to be confused with the “legal separation” of the spouses), or a joint regime but with particular rules (“joint ownership by agreement”). This choice affects both the possibility of selling or mortgaging the assets without the consent of the other spouse as well as the rules for the division of the assets in the case the marriage ends. Based on Article 30 of Law 218/95, foreign citizens resident in Italy may also choose one of the property regimes foreseen in Italian law, and this may facilitate their absorption into the Italian community. Considering the influence it may have in important contracts and in protecting the weaker spouse, the choice of property regime and/or changes to it do not always receive the attention they deserve.
Joint ownership of assets is the property regime Italian law “automatically” assigns to partners in marriage, but allows the spouses to choose otherwise (such as the separation of assets or joint ownership by agreement). In summary, legal joint ownership means that, in principle, all assets acquired by the spouses during their marriage, even if formally in the name of one only of them, in reality belong to both. That means that in order to sell them, donate them, mortgage them or otherwise dispose of them, the assent of both spouses is necessary and the value of the assets is equally shared by the spouses. Basically, the only things excluded are strictly personal or professional belongings, and the income from an individual's work.
Separation of assets
This is the property regime whereby two spouses continue to accumulate assets after marriage exactly as though they were not married. An asset acquired by one spouse remains his or hers alone, and the other spouse has no rights over it. Naturally, the spouses may jointly acquire an asset but each may then resell (or donate) his or her half without the consent of the other (as opposed to what happens under the joint ownership regime).