Navigate the article:
- 1. Underestimating urban planning and cadastral due diligence
- 2. Signing the preliminary contract without protective clauses
- 3. Ignoring tax planning before the notarial deed
- 4. Underestimating real costs of the transaction
- 5. Choosing the wrong advisor (or having none at all)
- How Raro Realty guides the international buyer through every phase
The Italian real estate market is among the most coveted in the world. It is also among the most complex to navigate for those arriving from abroad without an in-depth knowledge of Italy’s legal, fiscal and bureaucratic system.
The good news is that almost every mistake foreign buyers make is predictable and preventable. The condition is knowing in advance where the risks are hiding.
1. Underestimating urban planning and cadastral due diligence
This is the most serious mistake and, unfortunately, also the most frequent. Most foreign buyers assume that if a property is for sale, it is automatically compliant with regulations. In Italy, this assumption is dangerous.
According to consolidated estimates, over sixty per cent of Italy’s residential building stock presents discrepancies of some kind from the original building permits, ranging from minor unauthorised internal modifications to full-scale illegal extensions.
The critical point that many overlook is this: the notary is not responsible for verifying the concrete building compliance of the property. The law requires only that the notary verifies the formal presence of building permits and conformity declarations in the deed, without carrying out technical inspections on site. Translated into practical terms: the notarial deed can be signed and the property legally transferred even in the presence of substantial building irregularities, as long as the formal declarations are present in the act.
The direct consequence for the buyer is significant: if the property is sold with undisclosed irregularities, the buyer inherits the demolition obligation and faces criminal liability if the unlawful activity continues. A problem that becomes particularly relevant for those purchasing masserie, trulli and rural farmhouses in Puglia: historic properties that have often undergone modifications over the decades, not always documented or authorised.
How to prevent it: before signing the preliminary contract (not after), a qualified surveyor must carry out an urban planning due diligence (comparison between the actual state and the building permits filed with the municipality) and a cadastral due diligence (verification of the correspondence between the filed floor plan and the actual state of the property). The two checks are distinct and independent: a property can be urban-planning compliant but cadastrally non-conforming, with entirely different legal consequences. Both must be completed before committing any funds.
2. Signing the preliminary contract without protective clauses
The preliminary contract (also called the compromesso) is the moment when the negotiation transforms into a legally binding commitment. The confirming deposit paid at this stage has immediate and concrete effects: if the buyer withdraws, they lose the deposit; if the seller withdraws, they must return double the amount. Many foreign buyers underestimate the weight of this step, signing “light” preliminary contracts or ones lacking the necessary protective clauses.
The most frequent mistakes at this stage fall into three categories.
The first: signing a purchase proposal without inserting a suspensive clause linked to the granting of a mortgage, exposing the buyer to the risk of losing the deposit if financing is not approved.
The second: not inserting a suspensive condition linked to the outcome of due diligence. If the technical verification reveals problems after the preliminary contract has been signed, the buyer who lacks this clause finds themselves in a very weak negotiating position.
The third: not transcribing the preliminary contract in the property registers. Transcription is not mandatory, but for significant amounts (such as those typical in the luxury real estate segment) it protects the buyer from any mortgages, seizures or transfers to third parties that the seller might carry out in the period between the preliminary contract and the notarial deed.
How to prevent it: the preliminary contract must be drafted by a bilingual lawyer who knows both Italian law and the expectations of the international buyer. It is essential to request the insertion of suspensive conditions protecting the investment (mortgage, due diligence outcome) and to evaluate the transcription of the preliminary for maximum protection.
You may also be interested in: Selling a Luxury Property Without Exposing It: How a Qualified Advisor Turns Discretion into Value
3. Ignoring tax planning before the notarial deed
Italy’s property purchase taxation is more articulated than it appears, and the opportunities for tax savings are real but require activation before the deed, not after.
The first knot concerns purchase taxes. Depending on the type of property and the possibility of benefiting from the tax advantages for the primary residence, additional costs can range from 7 to 15 per cent of the purchase price. The difference depends on factors the buyer must know in advance: whether they are purchasing as a primary or secondary home, whether they intend to transfer their residency, whether the property is being purchased from a private individual (registration tax) or from a company (VAT).
The second knot concerns the tax regime for new residents. Italy has offered since 2017 an optional flat tax regime for HNWIs (High Net Worth Individuals) who transfer their fiscal residency to Italy: a substitute flat-rate tax of 100,000 euros per year on all foreign income, regardless of its amount. For municipalities under 20,000 inhabitants, there is also an advantageous variant at 7% on foreign income, particularly relevant for those purchasing in rural areas of Puglia or Sicily. These regimes must be planned with a tax consultant specialised in international taxation before the purchase, not after the notarial deed.
The third knot concerns double taxation: buyers from countries with which Italy has signed tax conventions (the United States, Germany, the United Kingdom and the Netherlands, among the main ones) must verify how rental income and future capital gains will be taxed in both countries, to avoid paying twice on the same income.
How to prevent it: engage a tax consultant with expertise in international taxation before even signing the purchase proposal. The choice of optimal tax regime must be made before the notarial deed because some options are not retroactive.
4. Underestimating real costs of the transaction
The property price is only the visible part of the investment. Foreign buyers, accustomed to systems where ancillary costs are more contained and transparent, often arrive at the notarial deed with insufficient budgets or with significant surprises.
The additional costs to consider in an Italian real estate transaction in the premium segment include:
- Purchase taxes (registration tax or VAT, mortgage and cadastral taxes): from 2% to 9% of the cadastral value or the price, depending on the applicable regime
- Notary fees: variable but generally between 0.5% and 2% of the deed value, with significant minimums
- Intermediary commission: in Italy it is usually charged to both parties (buyer and seller), with percentages ranging from 2% to 4% plus VAT per party
- Technical and legal due diligence: costs of surveyor, architect, lawyer and accountant, which for high-value and complex properties can reach significant figures
- Renovation costs: many rural properties require more work than expected, particularly old farmhouses or rural buildings. Always budget a contingency of at least 15 to 20% on top of the estimated renovation cost
- Post-purchase running costs: IMU (property tax), TARI (waste tax), insurance, ordinary and extraordinary maintenance, and property management if the property generates rental income
How to prevent it: build a total transaction budget that includes all these items before formulating an offer. A good advisor accompanies the buyer in this preventive estimate, avoiding the scenario where the sum of ancillary costs transforms a rational investment into a commitment beyond one’s means.
Also read: The future of Apulian masserie: from abandoned farmhouse to seven-figure investment asset
5. Choosing the wrong advisor (or having none at all)
This is the mistake that amplifies all the others. One of the most frequent errors is acting without specialised advice for foreign buyers, relying exclusively on informal contacts or agents who are not thoroughly familiar with the regulations applicable to international purchasers.
In the Italian premium real estate market, the choice of advisor is not a secondary variable. It is the variable that determines whether the buyer accesses the right properties, receives accurate information on urban planning and cadastral compliance, is guided through pre-deed tax choices and is protected during the most delicate negotiating phases.
An advisor not qualified in the luxury segment can expose the buyer to risks they are unaware of: properties with undisclosed irregularities, prices overestimated relative to the real market, preliminary contracts lacking protective clauses, tax deadlines not met. In all these cases, the consequences manifest after the notarial deed, when it is too late to intervene without significant legal costs.
The right advisor is measured against three criteria: technical and legal knowledge of the Italian market (not only commercial knowledge), the capacity to manage international transactions (bilingual documents, coordination with foreign professionals, management of international transfers and fund traceability), and a network of complementary professionals (notary, lawyer, tax consultant, surveyor) already tested for this type of operation.
How Raro Realty guides the international buyer through every phase
Raro Realty has structured its service specifically for international buyers approaching the Italian luxury real estate market, with a process that covers every phase of the transaction and prevents at source the mistakes described in this article.
The process is structured around six concrete points:
Property selection and pre-verification: every property in the Raro portfolio is subject to a preliminary check before being proposed. Evident urban planning, cadastral or mortgage-related issues are identified and flagged before the buyer has even expressed formal interest.
Due diligence coordination: Raro Realty coordinates the technical team (surveyor, architect) and legal counsel required for comprehensive due diligence, with reporting in English for international buyers.
Bilingual legal support: every preliminary contract is drafted with the appropriate protective clauses for the foreign buyer, including suspensive conditions and assessment of the opportunity to transcribe the preliminary.
Coordinated tax planning: Raro works in synergy with tax consultants specialised in international taxation to identify the optimal fiscal regime before the notarial deed.
Closing management: from notarial coordination to the management of international transfer traceability, every aspect of the closing is supervised by the Raro team.
Post-purchase property management: through Raro Villas, Raro Realty offers a comprehensive property management service after the purchase, including income valorisation for those who intend to place the property on the luxury rental market.
The active portfolio includes masserie, trulli, luxury villas and prestigious residences in Puglia and across Italy’s main destinations, with an approach that transforms one of the most complex financial transactions of a lifetime into a guided, transparent and surprise-free process.
Buying a prestigious property in Italy is a concrete opportunity. Doing it with the wrong support can turn it into an equally concrete problem.
Contact Raro Realty for a preliminary consultation on your Italian property purchase project.
