Buying Property in Italy: Legal Risks That Foreign Buyers Need to Know

Purchasing property in Italy is an attractive prospect for many international buyers — whether for residential use, holiday purposes or investment. The Italian real estate market offers a wide range of opportunities, but it also presents a set of legal risks that are specific to Italy and that are often underestimated by buyers who are unfamiliar with the Italian legal system.

Many of these risks only become apparent after the transaction has been completed — at which point remedying them can be extremely difficult and costly. This article focuses on the legal risks that foreign buyers most commonly encounter when purchasing property in Italy, and on the checks and protections that an Italian real estate lawyer carries out to address them before any commitment is made.

For a complete overview of the full purchase process — from the initial offer to the final deed — see our guide on buying property in Italy.

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Risk 1: Building and Planning Irregularities

One of the most significant and most common risks in Italian real estate transactions is the existence of building or planning irregularities affecting the property. Italy has a complex layered system of building regulations at national, regional and municipal level, and non-compliance is surprisingly frequent — particularly in older properties and in southern Italy.

Irregularities can take several forms:

• Unauthorised construction or modifications: extensions, additional rooms, terraces or structural changes carried out without the required building permits. In Italy, the buyer who purchases a property with unresolved unauthorised works can inherit liability for those works, including the obligation to demolish them or regularise them at their own cost
• Retrospective regularisations (condoni edilizi) not properly completed: Italy has issued several amnesties for unauthorised building works over the decades. In some cases, applications for regularisation were filed but never formally concluded, leaving the property in a legally uncertain status
• Discrepancies between permitted use and actual use: a property with planning permission as a commercial space being sold for residential use, or vice versa, raises significant legal and tax issues

Verifying the full planning and building history of a property requires reviewing the building permits, certificates of habitability (agibilità), planning authorisations and any retrospective regularisation applications filed with the municipality. This verification is typically carried out jointly by the lawyer — who checks the legal status of the documents — and a surveyor (geometra), who verifies technical compliance with applicable regulations.

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Risk 2: Cadastral Non-Compliance

The Italian cadastre (catasto) is the national registry that records the physical characteristics of properties for taxation purposes. A common problem in Italian real estate transactions is a discrepancy between the actual state of the property and the floor plans filed with the cadastre.

This matters for several reasons. Italian law requires that the cadastral plans filed with the cadastre correspond to the actual state of the property at the time of the sale. If they do not, the notary cannot legally complete the transaction without the plans being updated. Discovering a cadastral non-compliance at a late stage — after negotiations have progressed and costs have been incurred — can cause significant delays and additional expense.

A cadastral check before entering into any contractual commitment allows this issue to be identified early and addressed as a condition of the transaction.

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Risk 3: Mortgages, Liens and Other Encumbrances

Before purchasing any property in Italy, it is essential to verify that the property is free from mortgages, enforcement measures, liens, easements and other encumbrances that could affect the buyer’s title or use of the property.

This information is available through the mortgage registry extract (visura ipotecaria), which records all registered encumbrances on the property. A clean mortgage registry extract at the time of the search does not, however, guarantee that no further encumbrances will be registered before the final deed is signed — which is one of the reasons why the preliminary contract should be registered with the land registry to protect the buyer’s position in the intervening period.

The notary carries out mortgage and cadastral checks immediately before the signing of the final deed. However, relying solely on the notary’s checks — without an independent legal review by a lawyer acting exclusively for the buyer — means that problems are only identified at a stage when the buyer is already committed to the transaction and renegotiating the price or terms is far more difficult.

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Risk 4: The Purchase Offer — A Binding Commitment Before You Realise It

A risk that is frequently underestimated by foreign buyers is the legal effect of the purchase offer (proposta di acquisto) in Italy. In many countries, an initial offer is understood to be a preliminary expression of interest with no binding effect until a formal contract is signed. In Italy, the position is different.

Under Italian law, a purchase offer becomes a binding contract the moment it is accepted by the seller — even before a preliminary contract (compromesso) has been signed. The buyer who signs a purchase offer and has it accepted is legally committed to proceeding with the purchase on the terms stated in the offer. Withdrawing without a contractually recognised justification means losing the deposit paid.

Foreign buyers who sign purchase offers without legal review — often because the agent presents the offer as a standard formality — can find themselves legally bound to a transaction before all the necessary legal checks have been carried out. Having the offer reviewed by an Italian real estate lawyer before signing is a straightforward precaution that avoids this risk entirely.

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Risk 5: The Preliminary Contract and the Deposit

When a preliminary contract (compromesso) is entered into, the buyer typically pays a deposit (caparra confirmatoria) to the seller. Under Italian law, if the buyer withdraws from the transaction without a contractual justification, the deposit is forfeited. If the seller defaults, the buyer is entitled to receive double the deposit paid.

The preliminary contract also governs the conditions precedent to completion — such as the granting of a mortgage or the resolution of planning issues — and the timeline for signing the final deed. Poorly drafted preliminary contracts that fail to adequately protect the buyer’s position, or that do not include appropriate conditions precedent, can leave the buyer exposed if circumstances change before completion.

For more detail on how the preliminary contract works in Italian property transactions, see our dedicated article on the preliminary contract for property purchases in Italy.

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Risk 6: Property Tax Obligations After Purchase

Purchasing property in Italy creates ongoing tax obligations that foreign buyers should be aware of before completing the transaction. These include:

• IMU (Imposta Municipale Unica): an annual municipal property tax payable on properties that are not the owner’s primary residence in Italy. For foreign buyers who do not establish Italian residency, IMU is payable on the property from the year of purchase
• Income tax on rental income: if the property is rented out, the rental income is subject to Italian income tax. A flat-rate regime (cedolare secca) is available for residential lettings, which simplifies the tax calculation
• TARI: the municipal waste collection tax, payable annually based on the size of the property

Understanding these obligations before completing the purchase allows buyers to factor ongoing costs into their financial planning. For a detailed overview of the taxes payable at the time of purchase, see our article on taxes and property duties in Italy.

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The Role of the Lawyer vs the Notary: A Critical Distinction

A fundamental point that foreign buyers must understand is that the notary who drafts and signs the final deed does not represent the buyer’s interests. The notary is a neutral public official whose function is to ensure the formal legality of the transaction and to handle its registration. The notary performs checks — but those checks are carried out immediately before the signing of the deed, at a stage when the buyer is already contractually committed.

An Italian real estate lawyer, by contrast, acts exclusively for the buyer and intervenes from the earliest stages of the transaction — before the purchase offer is signed, before the deposit is paid, and before any contractual commitment is made. The lawyer carries out legal due diligence on the property, reviews and negotiates the preliminary contract, identifies problems before they become commitments, and manages the entire process on behalf of the buyer, including by power of attorney if the buyer is not able to travel to Italy.

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Frequently Asked Questions

What is the most common legal problem encountered when buying property in Italy?

Building and planning irregularities are the most frequently encountered issue, particularly in older properties and properties that have been extended or modified over the years. These problems can range from minor administrative issues to serious unauthorised works that affect the marketability of the property or expose the buyer to liability.

Can the notary’s checks be relied upon to identify all problems with the property?

No. The notary carries out formal checks on title and mortgage registration immediately before the deed is signed, but does not conduct a full legal due diligence covering planning compliance, cadastral conformity or the history of building permits. These checks require an independent legal review by a lawyer acting for the buyer.

Is it possible to include conditions in the purchase offer to protect the buyer?

Yes, and this is one of the most important things a lawyer can do for a foreign buyer. A purchase offer or preliminary contract can include conditions precedent — such as satisfactory completion of legal due diligence, the grant of a mortgage, or the resolution of identified issues — that allow the buyer to withdraw without losing the deposit if those conditions are not met.

What happens if a building irregularity is discovered after the sale has completed?

The buyer’s options depend on the nature of the irregularity, whether it was disclosed by the seller and the terms of the contract. In serious cases, the buyer may have a claim against the seller for breach of warranty or misrepresentation. However, litigation after completion is significantly more costly and uncertain than identifying the issue beforehand through proper due diligence.

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Request an Initial Legal Assessment

If you are considering purchasing property in Italy and are based abroad, contact our Italian real estate lawyer to request an initial legal assessment before making any commitment. We will review the specific transaction and advise on the legal checks required to protect your interests under Italian law.