Notarial services for foreigners in italy

Notarial services for foreigners in italy


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.

House purchases

Buying or selling a property (a home, office, shop, studio, land etc.) is one of the most significant moments in the life of a person, whether it is an investment or, especially, if the property is intended as the family home. In order to protect citizens, whether Italian or foreign, the Italian State re quires that the contract be drawn up by an impartial public official who is a specialist in this area: the notary.
By law, the notary acts as a third party who is independent of both seller and buyer, ensuring that the conveyance of the property complies with all legal requirements, in accordance with the common interests of the parties and with particular attention to the purchaser.
The role of the notary in this case is seen in all its importance, both for the complexity of the operation and because of the need to protect the parties, from the first moment in which they reach an agreement to proceed with the deal: for this reason it is recommended that the purchaser (almost always the weaker party in the transaction) contact his own notary from the start of the negotiations, before signing a proposal to purchase or preliminary contract, since these already represent a binding commitment; in this way, every aspect of the transaction to be entered into can be considered together with the notary. So do not hesitate to consult your notary.
The choice of notary is absolutely free (the choice may not be imposed by the estate agent or the bank providing a mortgage or by the seller) and it is up to the purchaser, who is required to pay the fees, unless otherwise agreed with the seller. The choice of notary, then, should be guided by the confidence the client has in him, the amount of time he is willing to spend and the advice given to ensure a safe purchase. If one does not know a notary, one can go to the nearest one. It is extremely important to check that everything is in order before signing any binding document and advice requested of the notary, even before the conclusion of the sale, does not have an additional cost. The parties have the right to consult the notary personally and ask him for all the clarifications and explanations that may be useful for understanding the consequences and legal effects of the deed. There are numerous activities carried out by the notary for the preparation of all documentation necessary for setting up the transaction. The notary first investigates the intentions of the parties so as to identify the type of deed most suitable for achieving the purpose desired by the client, within the confines of the law. So the notary must ask the parties for all the information that will enable him to understand fully the result they want to achieve. It often happens that, in conversation with the notary, the client ends up changing what had been the initial idea because, for example, there is a more suitable or more fiscally correct solution. Let us imagine the case in which the price is not paid in full at the time of the deed and part of the payment is postponed. In this case it is important to ask the notary’s advice on forms of collateral that can be provided to the seller and the corresponding costs. There are in fact various forms of protection: from the preparation of promissory notes to the registration of a legal mortgage, to a sale with reservation of ownership, in which case the transfer of ownership of the property takes place only upon payment of the last instalment of the price. Lastly, the recent economic crisis has led to the creation of additional contractual forms such as rent-to-buy, in which the purchase is preceded by a period of fruition of the property upon payment of rent, part of which is deducted from the sale price. Once the deed to be prepared has been defined, the notary must by law carry out a series of advance checks on legality, to ensure the contract will be valid and unassailable over time.
The property may be bought by a private purchaser, by a company or by a construction company.
In any case, the notary will ensure that:
• the seller really owns the property and has the right to sell it:
The notary ascertains the identity of the parties involved in the transaction and their right to act, by verifying the matrimonial property regime applicable between spouses, any power of attorney etc. The notary’s check on the identity of the parties serves to avoid the risk of identity theft, which is widespread in jurisdictions where there is no “Latin” notary
• the property is not mortgaged
By law the notary must ascertain that there are no previous mortgages, liens or foreclosures recorded at the Territorial Offices of the taxation authorities. The notary must ensure also that the property in question is not subject to specific constraints e.g. in terms of public housing (existence of particular individual requirements on the buyer, or price constraints), or right of first refusal in favour of certain persons, or covenants regarding assets classified as of historic, artistic or archaeological value.

• the previous owner has paid all service charges:
Upon completion it will be essential to have the managing agent prepare a statement on the payment in full of service charges and levies by the seller, since the buyer is liable for the non-payment of service charges due in the previous year.
• the cadastral plan conforms to the actual state of the property:
The notary must ensure that the cadastral plan exists and must bring it to the attention of the parties; the seller must declare and guarantee correspondence between the cadastral plan and the actual state of the property.
• the necessary checks have been put in place to ensure that the property is in order in terms of building/planning permissions
• the correct fiscal regime is adopted by the parties:

The notary identifies the taxation applicable to the specific case and proposes it to the parties as well as checking, following indications from the parties, the existence of the requirements for any tax benefits (for example, benefits for the purchase of a first home, or a tax credit or exemption in the case of transfers pursuant to separation or divorce proceedings). The notary has specific training in tax matters and is able to suggest solutions resulting in legitimate tax savings. he notary is obliged to collect from the purchaser the funds needed for the payment of taxes and duties; upon registration of the deed these will be paid over to the taxation authorities.
• the rules specifically designed to protect those who buy a property under construction have been complied with (e.g. issuance of a bank surety to guarantee any advance payments)
• the energy performance of buildings is certified in accordance with national and regional rules:
For the sale of properties with heating plants it is mandatory to have and often even to annex the certificate of energy performance (EPA) prepared by a registered certifier that shows the class of the property’s energy consumption for heating.

• all regulations have been observed regarding money laundering, traceability of payments and the commissions paid to any real estate agency.
The notary’s checks end with the signing of the deed. As a rule at the time of signing of the deed of sale, the handover of the property also takes place. Nevertheless, the parties may agree otherwise, deciding for:
• early handover, it being understood that the seller remains the owner of the property and therefore responsible for it under the law;
• delayed handover to meet the needs of the seller, a clause being inserted in the contract of sale setting a time limit by which handover must be made, if necessary with provision for a penalty for any delay. To protect the public, the law provides detailed rules for the preparation of the deed, in particular: a) the notary must explain the entire contents of the document to the parties and any witnesses whose presence is required by law in certain cases (such as when one party is unable to sign or is suffering from sensory impairment), making sure that they understand the contents and legal effects. If he does not do so, he is criminally responsible for the crime of falsity in a public document
b) the document, once read and approved, must be signed by the parties and any witnesses before the notary and it is then signed by the notary;
c) what the notary certifies in the notarial deed is legally conclusive evidence for all purposes – even in the courts – unless the crime of falsity in a public document can be proved. The phases of a sale are many and often complex, and do not come completely to an end with the signing of the deed, given that the notary must undertake an important series of steps at the Public Registries, including lodgement and fiscal registration.
The Preliminary Contract (commonly called a “compromesso”) This is the first contract that the seller and the buyer must sign. Sometimes, however, the preliminary contract (“compromesso”) is preceded by a purchase proposal (“proposta d’acquisto”). With the compromesso, the party agrees to sell/buy; the total price of the property is set, as well as the terms of payment, the actual timing of the sale and the amount of the advance payment (down payment/deposit) that is paid at that moment to the vendor. This preliminary agreement (even if it is concluded privately) gives rise to com mitments that are legally enforceable. They pose constraints for both the seller and the buyer: if after payment of the deposit the buyer decides not to buy the property, the seller may retain the deposit; but if the seller decides not to sell, thebuyer is entitled to receive back an amount equal to double the deposit paid. It should also be pointed out that if the preliminary contract is made with a notarial deed, the contract can be “transcribed” into the registries: in this way the buyer is protected from any problem that may arise during the period of time between compromesso and completion of the deed, such as mortgages, foreclosures or bankruptcy of the seller. In case of insolvency of the seller, for example, registration of the preliminary contract allows for recovery of all or part of the amounts paid. This suggested approach offers the best protection for the buyer.

Activities Subsequent to Completion of the Deed
Even after the signing of the deed, the notary is required by law to perform a series of tasks, within a short time, which will ensure on the one hand that the State receives payment of its taxes, and on the other publicly advising third parties and establishing the certainty of the transaction for the benefit of all citizens. The notary is obliged to carry out, within a brief time-frame:
a) registration of the deed with the taxation authorities and payment of the relevant taxes on behalf of the client;
b) lodging of the deed – as protection for the whole community – in the Public Registers, making it known and fully effective to all (technically known as third parties). The filing of the deed with the competent authority in the land register is required by law to let everyone know who is the owner of the property and whether it is subject to mortgages or other encumbrances.
c) cadastral registration in order to update the land registry.
How much does the notary cost?
There are no obligatory or predetermined tariffs. The fee is therefore left up to free negotiation between the buyer and the notary. The notary is obliged to provide, upon request, a written estimate with the detailed description of his fees and the taxes payable. As an indication only, the fees charged for the purchase of a property valued at EUR 200,000 may not exceed 1%.

What other costs are associated with the purchase?
Where a real estate agency is involved, the buyer must pay his commission. As an indication only, the fees charged for the purchase of a property of the above-mentioned value is commonly 3%.
Buying a Home: Fiscal Aspects

A) Purchase from a builder/renovator
Puchase from a firm of builders or renovators, except in particular circumstances, attracts VAT which is payable directly to the seller.
The VAT rate to be applied on the sale price will be:
– 10% unless it is a first home purchase
– 4% if “first home” assistance applies.
The same tax treatment is applied to the allocation of houses to members of housing cooperatives.
In the case of purchases subject to VAT, the following taxes will be also paid to the notary who will then pay the Taxation Office:
• Registration Tax: Euro 200
• Mortgage Tax: Euro 200
• Land registry Tax: Euro 200
The rates apply on the sale price declared in the deed.
B) Purchase from a private party
For the transfer of property between private individuals the registration tax, mort[1]gage and land registry taxes are paid by the buyer to the notary who, in turn, will forward them to the government Taxation Office at the time of registration.

1) In the absence of incentives
• Registration Tax: 9%
• Mortgage Tax: Euro 50
• Land registry Tax: Euro 50
2) Support for the purchase of a first home
• Registration Tax: 2%
• Mortgage Tax: Euro 50
• Land registry Tax: Euro 50
In the case of transfer of residential property to physical persons the purchaser may apply for payment of the registration tax on the “cadastral value” (price-value) of the property (which is the value obtained by multiplying the cadastral income by the legal coefficient of 115.5), regardless of the actual amount of the sale price, even if it is higher than this value.
The minimum tax is still €1,000. For the transfer of property between private individuals the registration tax, mort[1]gage and land registry taxes are paid by the buyer to the notary who, in turn, will forward them to the government Taxation Office at the time of registration.
1) In the absence of incentives
• Registration Tax: 9%
• Mortgage Tax: Euro 50
• Land registry Tax: Euro 50
2) Support for the purchase of a first home
• Registration Tax: 2%
• Mortgage Tax: Euro 50
• Land registry Tax: Euro 50
In the case of transfer of residential property to physical persons the purchaser may apply for payment of the registration tax on the “cadastral value” (price-value) of the property (which is the value obtained by multiplying the cadastral income by the legal coefficient of 115.5), regardless of the actual amount of the sale price, even if it is higher than this value.
The minimum tax is still €1,000.

Mortgages

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.

Donations

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

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).

Apostille

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

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)

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Il “Blog” rappresenta uno strumento democratico per manifestare, nel rispetto della Legge e delle regole sociali, liberamente il proprio pensiero.

Non costituisce, pertanto, testata giornalistica conformemente a quanto stabilito dalla Cassazione 23230/2012.

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