The Italian Preliminary Contract for Real Estate: A Guide for Foreign Buyers

In Italian real estate transactions, the purchase of a property rarely proceeds directly from an initial offer to the final notarial deed. The standard process involves an intermediate step — the preliminary contract (contratto preliminare di compravendita), commonly known as the compromesso — which legally binds both parties to complete the transaction at an agreed price and on agreed terms, while allowing time to finalise the practical and financial arrangements before the transfer of ownership.

For foreign buyers purchasing Italian property from abroad, understanding the preliminary contract is particularly important: it is at this stage that significant sums are typically committed, and the legal protections available to the buyer — as well as the risks — are determined by how the contract is structured. This guide explains what the preliminary contract is, what it must contain, how it should be registered and transcribed, and what happens if either party fails to follow through. For an overview of the full purchase process, see our page on Italian real estate lawyer for foreign buyers.

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The Three Stages of an Italian Real Estate Purchase

A standard Italian property transaction proceeds through three distinct stages:

• Purchase proposal (proposta d’acquisto): an irrevocable offer made by the buyer containing the key terms of the proposed transaction. Once accepted by the seller, it binds the buyer to those terms for the duration of its validity
• Preliminary contract (compromesso): a formal bilateral agreement in which both the buyer (promissario acquirente) and the seller (promittente venditore) commit to completing the sale at a specified price, on specified terms and within a defined timeframe. The preliminary contract does not transfer ownership — it creates a mutual obligation to execute the final contract
• Notarial deed of sale (rogito notarile): the final contract, executed before a notary, which transfers legal ownership of the property. The notary registers the transfer with the competent state bodies and the Land Registry (Catasto)

The preliminary contract is the stage at which the buyer typically commits a deposit and the seller takes the property off the market. Getting this contract right is therefore critical.

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Legal Requirements: What the Preliminary Contract Must Contain

Italian law does not provide a detailed statutory framework specifically for the preliminary contract — its regulation is derived from the general principles of contract law and from Article 1351 of the Italian Civil Code, which requires the preliminary to have the same form as the final contract it is intended to produce. Since real estate sale contracts must be in writing under Article 1350 of the Civil Code (a public deed or private written agreement, under penalty of nullity), the preliminary contract must also be in writing.

The essential elements that a preliminary contract must contain to be legally valid are:

• Identity of the parties: full names, dates of birth, nationalities and tax identification numbers of both the buyer and the seller
• Precise identification of the property: full address, cadastral data (municipality, section, sheet, parcel and sub-parcel), type of property and any appurtenances included in the sale
• The agreed sale price and the currency and method of payment
• Written form: the contract must be in writing and signed by both parties

Beyond these minimum elements, the preliminary contract should include as much detail as possible to avoid disputes at the time of completing the final deed — including a description of the property’s current condition, any outstanding mortgages or other encumbrances, the agreed completion date, and the arrangements for handover.

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The Deposit: Caparra Confirmatoria and Caparra Penitenziale

The preliminary contract almost always includes a deposit payment by the buyer. Italian law recognises two fundamentally different types of deposit, which have very different legal consequences if the transaction does not complete.

Confirmatory Deposit (Caparra Confirmatoria — Art. 1385 Civil Code)

The confirmatory deposit is the most commonly used type in Italian real estate transactions. It serves as both a guarantee of the buyer’s commitment and a mechanism for determining compensation in the event of default.

The consequences of default are:

• If the buyer defaults: the seller may retain the entire deposit as compensation for the buyer’s failure to complete, without any further claim for damages
• If the seller defaults: the buyer may demand the return of the deposit plus an equal additional amount — that is, twice the amount paid — as compensation
• If either party prefers: instead of relying on the deposit mechanism, either party can pursue judicial action for specific performance under Article 2932 of the Civil Code or claim compensation for the actual damage suffered. However, the deposit mechanism and the right to claim further damages cannot be combined unless the contract expressly provides for both

Penitential Deposit (Caparra Penitenziale — Art. 1386 Civil Code)

A penitential deposit functions differently — it expressly reserves for each party the right to withdraw from the contract by forfeiting the deposit (for the buyer) or returning twice the deposit (for the seller). Where a penitential deposit is agreed, the payment of the deposit or its double is the only consequence of withdrawal — the withdrawing party cannot be compelled to complete the transaction and cannot be sued for additional damages.

The type of deposit agreed in the preliminary contract must be clearly identified. If the contract simply refers to a “deposit” without further specification, Italian courts will generally treat it as a confirmatory deposit under Article 1385.

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The Penalty Clause (Art. 1382 Civil Code)

As an alternative to — or in addition to — a deposit, the preliminary contract may include a penalty clause specifying a fixed sum to be paid by the party that fails to comply with its obligations. Unlike the deposit mechanism, the penalty clause does not give either party the right to withdraw — it defines the financial consequences of non-performance. If the contract includes both a penalty clause and a deposit, it must expressly state whether additional damages can be claimed beyond the penalty amount.

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The Completion Deadline

The preliminary contract should specify the date by which the final notarial deed must be signed. Under Italian law, a deadline in a contract is not automatically “essential” — meaning that if it is missed without clear indication that the parties intended the deadline to be a strict condition, neither party can automatically cancel the contract on that basis alone. A postponement can generally be agreed where there is a legitimate objective impediment.

However, where the contract language, context and circumstances make clear that the parties intended the deadline to be essential — that is, that the economic purpose of the agreement would be defeated if it were not met — expiry of that deadline without performance can justify dissolution of the contract. To avoid ambiguity, the preliminary contract should expressly state whether the completion date is essential or not.

Where no deadline is specified at all, Italian case law holds that either party can demand immediate performance under Article 1183 of the Civil Code — making it advisable to always set an explicit completion date.

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Registration and Transcription

Registration for Tax Purposes

The preliminary contract must be registered with the Italian Revenue Agency (Agenzia delle Entrate) within 30 days of signing, under Presidential Decree No. 131 of 1986. Registration is a tax obligation — failure to register results in penalties, but does not affect the civil validity of the contract.

Registration costs:

• Fixed registration tax: €200
• Stamp duty: €16 for every four pages of the contract (or €155 if notarised)
• If a confirmatory deposit is provided: an additional proportional registration tax of 0.50% of the deposit amount
• If advance payments on the price are provided: 3% of the advance payment amount (where not subject to VAT; if subject to VAT, a fixed registration tax applies instead)

Transcription at the Land Registry

Transcription of the preliminary contract at the Land Registry (Conservatoria dei Registri Immobiliari) under Article 2645-bis of the Civil Code is not mandatory for a privately signed contract — but it is strongly recommended for the buyer’s protection. Once transcribed, the preliminary contract puts third parties on notice of the buyer’s interest in the property. This means that any subsequent encumbrances registered against the property — mortgages, seizures, or other constraints — cannot be enforced against the buyer who has a prior transcribed preliminary contract.

Transcription becomes mandatory when the preliminary is executed by notarial deed. It is also mandatory for off-plan and under-construction properties under Legislative Decree No. 122 of 2005, which requires the preliminary to be in notarial form and to be transcribed to protect the buyer’s advance payments.

Transcription costs: fixed tax of €200 and fixed transcription charge of €35, in addition to the notary’s fees if the contract is notarised.

Why Notarial Form Offers Better Protection

While a privately signed written preliminary is legally valid, having it executed by notarial deed offers significant additional protections — particularly for foreign buyers:

• The notary verifies the identity of the parties and the title of the seller
• The contract can be transcribed at the Land Registry immediately, protecting the buyer against subsequent encumbrances
• The notarial deed has the evidentiary value of a public document
• For off-plan properties, notarial form and transcription are legally required

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What Happens If Either Party Refuses to Complete

If the seller refuses to sign the final notarial deed despite being obliged to do so under a valid preliminary contract, the buyer has two main remedies:

• Specific performance (Art. 2932 Civil Code): the buyer can apply to the Italian court for a judgment that produces the same legal effects as the unconcluded final contract — that is, a court order that itself transfers ownership of the property to the buyer. This is the most effective remedy where the buyer wants the property rather than financial compensation
• Rescission and damages (Art. 1453 Civil Code): where the seller’s breach is sufficiently serious, the buyer can alternatively request dissolution of the contract and compensation for the damage suffered — including the return of the deposit under the caparra mechanism, plus any additional damages where the contract provides for them

If the buyer is the defaulting party, the seller’s primary remedy is to retain the confirmatory deposit and, if the contract provides, to claim additional damages beyond the deposit amount.

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Practical Considerations for Foreign Buyers

Foreign buyers purchasing Italian property from abroad should be aware of the following practical points when negotiating and signing a preliminary contract:

• Language: the preliminary contract should be in Italian (or bilingual with an Italian version) to ensure it is legally effective in Italian proceedings. A contract in English or another foreign language alone may create practical difficulties in enforcing it before Italian courts or registering it with Italian authorities
• Power of attorney: a foreign buyer who cannot travel to Italy for the signing of the preliminary contract can authorise an Italian lawyer to sign on their behalf under a notarial power of attorney. The power of attorney must be executed before a notary in the buyer’s country, apostilled and translated into Italian
• Due diligence before signing: the preliminary contract should only be signed after a legal review of the property’s title — checking for mortgages, easements, court orders, planning compliance and cadastral regularity. By the time the preliminary is signed, significant sums have been committed and it becomes much harder to withdraw without financial loss
• Tax code: the buyer must have an Italian tax identification number (codice fiscale) to register the preliminary contract and to complete the notarial deed

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Frequently Asked Questions

Is the preliminary contract the same as the final sale contract?

No. The preliminary contract creates a mutual obligation to execute a future contract — it does not itself transfer ownership of the property. Ownership transfers only when the final notarial deed of sale is signed before a notary and registered with the Land Registry. Until that point, the seller remains the legal owner.

Can I sign the preliminary contract remotely without travelling to Italy?

Yes, if you grant a notarial power of attorney to an Italian lawyer authorising them to sign on your behalf. The power of attorney must be executed before a notary in your country, apostilled and translated into Italian before it can be used in Italy. Your lawyer can then sign the preliminary contract, attend the registration and, ultimately, sign the final notarial deed on your behalf.

How much deposit is typically paid at the preliminary stage?

There is no legally fixed amount — it is a matter of negotiation. In practice, deposits in Italian real estate transactions typically range from 10% to 20% of the agreed purchase price, though lower or higher amounts can be agreed. The amount should reflect a genuine commitment by the buyer while being proportionate to the seller’s loss if the transaction does not complete.

What if the property has a mortgage that has not been disclosed?

Undisclosed encumbrances discovered after signing the preliminary contract can give the buyer grounds to refuse to complete the final deed and to claim return of the deposit plus damages. This is precisely why a thorough title search — checking the Land Registry for mortgages, seizures and other constraints — should be conducted before signing the preliminary, not after.

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Request an Initial Legal Assessment

If you are a foreign buyer considering purchasing real estate in Italy and need legal assistance with the preliminary contract or any other stage of the transaction, contact our Italian real estate lawyer to request an initial legal assessment. We will review the transaction and advise on how to protect your interests under Italian law.