Knowing what the preliminary contract for the purchase of a property ("contratto preliminare" in Italian) consists of and how it works is very important when you're planning to buy a property in Italy. In order to shed some light on this pre-sale agreement that's part of the purchase process in Italy, idealista/news has asked Giulio Biino, national advisor of the Notariat, for help.
What is the preliminary contract for the sale of a property?
"The preliminary contract is the contract by which the parties assume their mutual obligations. The seller promises to sell and the buyer promises to buy. With this contract, the parties bind themselves to come to the conclusion of the definitive deed at a later date".
What exactly does the preliminary contract consist of?
"The preliminary contract in itself can be a simple private contract. It does not therefore need to be authenticated or notarised, except in the cases provided for by law. The preliminary agreement, in all cases, must be registered. There is some confusion regarding this point, but it should be stressed that the preliminary agreement is a deed subject to registration. When a real estate agency is involved, the broker is responsible for registering the preliminary agreement".
What taxes are involved in the preliminary contract for the sale of a property?
"First of all, as a rule, the preliminary agreement provides for the payment of a deposit. This is the sum of money that the buyer pays to the seller. The deposit must be returned in double if the seller no longer intends to close the deal and is retained by the seller if the buyer no longer wishes to proceed with the purchase.
The deposit, therefore, is a sort of guarantee for both parties. A preliminary agreement which does not provide for the payment of any sum is of little guarantee for either the seller or the buyer.
The amount paid as a deposit is subject to a tax of 0.50%. If intermediate sums are paid, i.e. other payments between the time of signing the preliminary agreement and the time of the final purchasing agreement, they can be classified indifferently, at the choice of the parties, as an addition to the deposit or as a down payment".
Must the preliminary contract be signed at the notary's?
"Article 2.645 bis of the Italian Civil Code provides for the preliminary contract concluded with the intervention of the notary, either by notarised private deed or by public deed. In this case, there is no longer only the obligation to register, but also the obligation to transcribe the preliminary agreement.
The transcription adds an important protection to the benefit of the promising buyer: it prevents the seller from selling the same property twice and protects the buyer from any economic or financial setbacks."
Is it important to make the preliminary agreement?
"It may happen that two people, who know and trust each other, come to an agreement and decide, with a handshake, to sign the deed after a week or ten days, which is the time required for the notary to prepare the final deed. But these are very sporadic cases. Otherwise, it is indispensable to formalise the agreement between the parties in some way, and in Italy we formalise it with a preliminary agreement".
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