- Some 250,000 households have used spray foam insulation in recent years
- If not installed correctly or sprayed in an unsuitable space it can lead to rot
- Rics today has launched a comprehensive guide for homeowners to follow
Britons planning to improve the energy efficiency of their homes are being warned to do their research before using spray foam insulation.
The popular form of insulation has been widely used by homeowners for several decades – but if it is improperly installed it can cause problems when they come to sell or get a new mortgage.
A total of 250,000 households are estimated to have used spray foam insulation in recent years, and some are now facing dire consequences as a result.
Incorrect installation can pose a structural risk to houses and cause costly repair bills. For example, the foam may not provide the right ventilation, which could cause roof timbers to rot.
Issues like these are picked up on building surveys, and reported to potential buyers – potentially putting them off purchasing the home.
Lenders can also be reluctant to provide new mortgages. In November, Britain’s biggest building society, Nationwide, warned it could reject mortgage applications on homes where spray foam insulation had been installed badly.
HOW THIS IS MONEY CAN HELP
With the average household’s gas and electricity bill rising to £3,000 from next month, many homeowners will be looking for ways to cut costs by making their homes more energy efficient – of which spray foam insulation is one option.
In response to growing concerns over cowboy firms and bad practices within the sector, the Royal Institution of Chartered Surveyors (Rics) today launched a comprehensive guide to advise Britons about the use of spray foam insulation.
The guide explains what effects spray foam might have on a property’s roof structure, thermal performance and value, as well as outlining the do’s and don’ts when installing insulation in a home.
Sam Piplica, senior specialist in building standards at Rics, said: ‘We are pleased to present this free consumer guide on spray foam insulation to the public.
‘Rics’s remit is to serve the public, therefore, the guide’s main focus is to educate and raise public awareness of potential issues surrounding spray foam, so that people can make informed decisions based on research and due diligence.
‘Rics is also part of an industry working group on this issue to help not only our members but the wider industry improve their products and services.’
What do homeowners need to know?
Spray foam, also known as SPF, is a form of insulation material that can be applied to roof spaces, walls and floors.
It is installed by using a spray gun, which can be advantageous when working with unusual designs and tight spaces.
Although adding spray foam insulation can make a home warmer and reduce energy bills, it can also cause some unwanted side effects.
For example, sealing hot air inside can also seal in moisture and make roof repairs more difficult.
Many of the UK’s older homes – whilst being poorly insulated – were built to breathe. Badly installed insulation can inhibit this ventilation and result in damp.
Rics also advises homeowners to ensure they prioritise certain other home improvements before considering spray foam insulation.
For example, a property needs to be wind and water tight before spending money on improving its energy performance. Adding insulation to a poorly maintained roof could accelerate the decay of any untreated timber roof structures, Rics says.
Risks of spray foam insulation
1) Hidden problems
Some spray foam insulation can make it difficult to identify problems to the roof because it restricts the view from within the roof space.
This is because if the timber roof structure is covered with spray foam it cannot be fully seen or inspected.
For example, if there’s a roof leak behind some types of spray foam insulation, a homeowner may not notice it, which in turn can lead to rotting timber.
2) Damp and condensation
Poorly installed insulation can lead to damp and condensation, which can damage parts of a property.
For example, most pitched roofs on houses and bungalows are designed to be ventilated and spray foam is a change to the original design.
A draughty loft above ceiling-level insulation is generally a dry loft. Air circulation balances the moisture vapour to reduce condensation.
However, spray foam creates a warm roof void. It seals the gaps to prevent draughts and retains heat – but will also seal in moisture unless precautions are taken.
The Rics advises all homeowners to seek professional advice on how to manage any moisture risks.
3) Energy saving
There is a risk that installing spray foam insulation won’t have the desired energy-saving effect if it is not done correctly, Rics says.
Although spray foam insulation is a better thermal insulator than the equivalent standard mineral wool loft insulation of the same thickness, existing loft mineral wool insulation can be topped up if needed.
Doing this can result in a warmer home than if the typical maximum level of spray foam was installed between the roof rafters.
4) Fire safety
Homeowners should be aware of the fire risk to their property when using polyurethane spray foam as insulation.
Polyurethane spray foam is typically a flammable material, which will only resist a small flame for a few seconds.
While unused loft spaces do not require protecting from fire, if a fire does happen, having spray foam will increase the likelihood and extent of damage to the property and any adjoining homes.
What to consider before installing
1) Don’t accept ‘cold-call’ or unsolicited offers relating to spray foam installations.
2) Don’t install spray foam insulation in a listed building or other protected building or structure without obtaining listed building consent in advance.
3) Don’t carry out isolated alterations without careful due diligence and planning.
4) Do get advice from an independent, impartial professional if you are considering alterations or modifications at your property. This means someone who does not have a commercial interest in selling you their product.
5) Do keep your property in good repair, ensuring it is wind and water tight.
6) Do consider the whole property before carrying out any alterations.
7) Do consider how your property is designed to perform – and specifically, understand where ventilation is needed in your property.
8) Do consider where you spend most time in the building and consider installing more insulation next to your living spaces, for example, at ceiling level in the loft to keep the heat near the rooms you live in.
9) Do check with your mortgage provider whether its policy allows the installation of such products.
10) Do check with your insurance provider whether its policy allows the installation of such products with potential increased fire risk.
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1 Legal framework
1.1 What legislation governs real estate in your
Article 810 to 1172 of the Civil Code set out Italy’s
general law in relation to proprietary interests in real
Among other things, these 363 articles specify:
- the different types of interest in real estate;
- the limits to such interests;
- the way in which such interests can be transferred; and
- the remedies that are available in case of interference with
the interest by a third party.
The provisions of the Civil Code are so comprehensive and
detailed that they even deal with the remuneration of estate
Non-proprietary interests in land – which in Italy include
leases – are dealt with by other provisions of the Civil Code
(see question 2.2).
Of the special legislation introduced after the enactment of the
Civil Code on 16 March 1942, the following laws are notable:
- Law 756 of 15 September 1954 on leases and other kinds of
contracts relating to agricultural land;
- Law 346 of 10 May 1976 on adverse possession in relation to
small plots of agricultural land;
- Law 392 of 27 July 1978 on leases of urban dwellings; and
- Law 431 of 9 December 1998 on residential leases.
With regard to matters other than the right to own and use land,
the following key Italian statutes are notable:
- Royal Decree 499 of 28 March 1929 on the establishment of land
- Law 1150 of 17 August 1942 on general planning;
- Law 10 of 28 January 1977 on the right to build on land;
- Legislative Decree 9 of 23 January 1982 on residential
- Law 52 of 27 February 1985 introducing the mechanisation of the
- Law 47 of 28 February 1985 on urban planning and construction
- Legislative Decree 447 of 26 October 1995 enacting the
framework law on noise and sound pollution;
- Presidential Decree 380 of 6 June 2001 enacting the
consolidated general construction law;
- Legislative Decree 152 of 3 April 2006, as amended by
Legislative Decree 4 of 16 January 2008, enacting the Code of the
- Legislative Decree 222 of 25 November 2016 introducing
simplified planning permission rules.
1.2 What special regimes apply to different types of real
In Italy, the law that applies to agricultural land is different
in several respects from the law that applies to other land. Aside
from the different tax regimes, the main differences relate to:
- non-derogable statutory provisions on leases; and
- the pre-emption right afforded to neighbouring farmers (see
Italian law also draws a distinction – for tax purposes,
but also for other purposes (see question 6.6) – in relation
to residential property that is an individual or family’s main
home (so called “prima casa“) as opposed to
The default position under Italian law is that if a legal or
natural person does not own the land, the land belongs to the
Given that Italy has a very long coastline and some of its most
sought-after real estate sits on it, the shoreline belongs to the
Italian state (so-called ‘demanio marittimo‘). The
state can grant licences to use specific areas of the demanio
marittimo, such as beaches. The Capitaneria di Porto
– essentially the coastguard – must be consulted in
relation to the use of the shore for water sports and so on.
2.1 What types of ownership rights exist in your
Italian law contemplates the ‘diritto di
proprietà ‘ in relation to land and buildings. This
is an unfettered right of ownership which lasts forever, bar for
adverse possession which requires 20 years of undisturbed
possession of the property by a third party that acquired control
of the property with the acquiescence of the owner.
The diritto di proprietà is the fullest of
ownership interests and falls within a category of proprietary
interests that are referred to in Italian law as ‘diritti
reali‘ – literally ‘interests in real
property’ or ‘rights in rem‘. Incidentally,
real property also includes movable assets.
Each diritto reale:
- is absolute in nature – that is, it can be exercised by
the holder against anyone, not only against the person that the
holder acquired the right from;
- entails direct control of the property;
- is statutory in nature (it can be transferred as is, but cannot
be created by way of contract); and
- has an intrinsic economic value.
The diritti reali include, alongside the diritto di
- diritto di usufrutto, entailing the right to enjoy a
property and to receive the income (‘the fruits’ –
literally in the case of a piece of land) from it as fully as the
holder of the diritto di proprietà would do,
without being able to change the economic purpose of the property.
Such residual interest is by the owner and is referred to as
‘nuda proprietà ‘ – literally,
‘naked property’. The diritto di usufrutto comes
to an end when the interest holder dies. So, from a practical
standpoint, the diritto di usufrutto is broadly the
Italian equivalent of the English interest in possession;
- diritto di uso – a limited form of diritto
di usufrutto of limited practical relevance. Unlike with the
usufrutto, the holder of the right can use freely the
property but only keep the ‘fruits’ of it insofar as they
are needed for the sustainment of his or her family;
- diritto di abitazione which confers upon the holder
the right to live in a property for free but only insofar as that
satisfies the needs of his or her family;
- diritto di enfiteusi – an interest in
agricultural land which is of little practical relevance nowadays,
whereby the owner confers upon someone the right, either in
perpetuity or for a limited period of time, to appropriate the
natural fruits of the land in exchange for the payment of a fee and
the duty to improve the land;
- diritto di servitù – a right to make
partial use of someone else’s property (eg, the right to cross
over neighbouring land) or a limitation to someone else’s
property interest (eg, the right to prevent a neighbour from
increasing the height of his or her house). A diritto di
servitù is essentially the equivalent of an easement
under English law; and
- diritto di superficie – the right to build on
existing land or on top of a building that belongs to someone else;
in practice, this is an exception to the default rule under Italian
law that buildings belong to the owner of the land they are built
on or under (see question 2.4).
Importantly, the right to exclusively occupy real estate for a
set period of time in exchange for the payment of rent –
which in Italy is created by way of a contratto di
locazione in the case of residential property and a
contratto di affitto in the case of commercial property
– is not a diritto reale and is not considered to be
akin, or even comparable to, the diritto di
This is very different from English law, under which a long
lease is considered a form of ownership.
Unlike a long lease in England and Wales, the contratto di
locazione/affitto has a relatively short term (see question
2.2); and in the case of residential leases, it cannot be
transferred at will by the leaseholder.
It follows from the above that under Italian law, there is no
concept of ‘freehold’ as opposed to ‘leasehold’ as
different types of ownership.
2.2 What ownership structures are commonly used in your
About 80% of dwellings in Italy are occupied by their owners.
The remaining stock residential properties are occupied pursuant to
a contratto di locazione – a form of medium-term
lease (Article 1573 of the Civil Code prescribes a maximum duration
of 30 years) that is not considered a form ownership (see question
The contratto di locazione must fall within one of the
following categories, for which the law establishes standard
commercial terms that cannot be derogated from by way of
- contratto di locazione a canone libero, where the
parties can freely agree the amount of the rent but the contract
has a minimum duration of four years, which is tacitly renewed for
another four years;
- contratto di locazione a canone concordato,
- the amount of the rent is fixed at a level lower than market
price by reference to tariffs agreed locally between the
associations of landlords and tenants; and
- the term cannot last less than three years and can only be
renewed for two years;
- the amount of the rent is fixed at a level lower than market
- contratto di locazione transitorio, where:
- the parties can freely agree the amount of the rent;
- the initial term is up to 18 months; and
- the lease is demonstrably linked to needs that are transitory
in nature, such as an employment contract with a probation period
equal to the initial term of the lease; and
- contratto di locazione con riscatto – a
‘rent to buy’ contract that is rarely used in
There are also leases for students and for tourists (with a
maximum term of 30 days), which are sub-categories of the
contratto di locazione transitorio.
As family ties in Italy are very strong, it is common for
individuals who own more than one property to grant a relative
– often an adult child finding his or her feet in the
country’s challenging labour market – a licence to occupy
the spare property for free, pursuant to a so-called comodato
d’ uso gratuito.
Upon the death of a spouse, widows and widowers have by law a
lifelong exclusive diritto di usufrutto (broadly
equivalent to the English interest in possession; see question 2.1)
on the property that they owned jointly with the deceased.
It is relatively rare for real estate assets to be settled into
a trust or into a ‘patrimonial fund’, which is akin to a
trust but an altogether more inflexible instrument contemplated by
the Civil Code, which was enacted in 1942 – long before
trusts had made their way into the Italian legal system.
In comparison with countries such as England, in Italy, a
relatively high proportion of smaller commercial units are owned by
individuals. Traditionally, companies that own real estate mainly
use it for their own business, although corporate landlords are
becoming increasingly common.
2.3 Are there any restrictions on real estate ownership in your
Children that are under 18 years old and adults who are legally
established as lacking mental capacity cannot acquire or dispose of
any rights, including real estate ownership.
Individuals who are not Italian nationals or nationals of an EU
member state cannot purchase a property in Italy in their name
unless this is specifically allowed by way of an agreement between
the Italian state and the nation of which the individual is a
national. Italy has agreements of this kind with most countries,
including the United States. By contrast, the United Kingdom does
In order for an individual to purchase a property, that
individual must have a codice fiscale, which is a tax ID
issued by the Italian Inland Revenue to anyone who enters into a
tax relevant transaction in Italy (but who does not necessarily pay
tax there). A foreigner must request the codice fiscale
through the Italian consulate general in his or her country.
Individuals and corporate vehicles that are included on economic
sanctions lists that apply in Italy cannot purchase a property in
As outlined in question 2.1, the diritto di
proprietà and other diritti reali are absolute
in nature. A corollary of this is that they can be freely
transferred by their holder to whomever he or she wishes.
That said, Italian statutory law contemplates specific
pre-emption rights. For example, a tenant has a statutory right of
first refusal – a so-called diritto di prelazione
– in case the owner avails of the option to terminate early
the lease on grounds that it will sell the property.
Another example of a pre-emption right is that of the owner or
leaseholder of land that borders the land being sold, where the
owner or leaseholder in question is registered as a farmer.
If a property is sold without first being offered to the person
holding the pre-emption right, that person can, within one year of
the sale, apply to the court to have it reversed and cause the
property to be transferred to him or her instead upon payment by
him or her of the purchase price.
2.4 Is ownership of land and buildings constructed thereon
Yes, it is possible to legally separate the ownership of land
and buildings built thereon or thereunder. One way to do so is for
the owner of a property to dispose of the diritto di
superficie (see question 2.1). However, the default rule set
out by Article 934 of the Civil Code is that buildings constructed
on land (including below ground level) belong to the owner of the
2.5 What security interests can attach to real estate? How are
The following security interests can attach to real estate:
The privilegio (literally ‘privilege’) is a
right conferred by law to specific categories of creditors (eg, the
state in respect of unpaid tax and duties) to satisfy their credit
with priory over other creditors on the real estate asset belonging
to the debtor. The privilegio can either:
- attach to all real estate assets of the debtor, in which case
it is referred to as being ‘generale‘; or
- attach to specific real estate assets, in which case it is
A privilegio speciale has priority over an
The privilegi exist as a matter of law (which everyone
is supposed to know) and are thus not registered with the land
register, unlike the ipoteca.
The ipoteca is a charge. It is usually translated in
English as ‘mortgage’. However, this is incorrect, because
under English law a mortgage entails the lender/mortgagee
purchasing the property in its own name, with the condition that
the conveyance of title becomes void upon payment of the debt.
By contrast, when a bank finances the acquisition of a property
in Italy and the loan is secured by way of an ipoteca, the
borrower purchases the property in his or her own name and the bank
secures the repayment of the loan by way of the
The ipoteca ‘follows’ the asset to which it
attaches. So, if a third party purchases the property from the
borrower/chargor (which, unlike in England, is possible in
principle because the borrower owns the property) the
creditor/chargee can still enforce the ipoteca and
therefore cause the property to be appropriated and sold by the
court-appointed receiver, with the proceeds applied towards
repayment of its credit.
There are three types of ipoteca:
- ipoteca volontaria, which is granted by the debtor at
the behest of the creditor;
- ipoteca giudiziale, which is granted by way of a court
- ipoteca legale, which is granted by the new owner of a
property where the previous owner/seller wishes to secure through
it the payment of deferred consideration for the sale.
Importantly, the ipoteca comes into existence when it
is registered with the land register, which is public. Hence, the
ipoteca becomes known (or at least knowable) to the world
at large, including other creditors of the homeowner.
It is possible for several ipoteche to attach to the
same real estate asset in succession with one another. The
ipoteca that is registered first – called the
ipoteca di primo grado – prevails over those that
are registered thereafter (the ipoteca di secondo grado
and so on).
3.1 What body administers the land register in your
The Italian Inland Revenue administers the Catasto
(‘Cadastre’) and the banca dati ipotecaria, which
jointly perform the function of the land register for the most part
of Italy, with the exception of those areas which were previously
part of the Austrian-Hungarian empire. These broadly coincide with
the provinces of Trento, Bolzano, Trieste and Gorizia, as well as
some towns in the provinces of Udine, Brescia, Belluno and Vicenza.
In these areas, the Catasto is the only repository.
The Catasto collects and manages administrative data on
properties throughout the country, including information on:
- the classification of the property;
- the share of ownership;
- a lot map; and
- the rendita catastale – that is, the rateable
value of the property for tax purposes.
The Catasto is divided into two parts, one covering
urban properties and the other covering rural land.
The banca dati ipotecaria are effectively registers of
deeds containing information on property ownership, indicating who
has or had legal rights to a property, including mortgage liens and
other limitations on ownership. They are also commonly referred to
- registri immobiliari (real estate registries);
- conservatoria dei registri immobiliari (the word
‘conservatoria‘ referring to the keeper or the
physical register in each provincial capital); and
- pubblicità immobiliare (public notices of
Unless stated otherwise, the term ‘land register’ in
this Q&A refers to the banca dati ipotecaria.
The records of the Catasto only constitute proof of
ownership rights in respect of properties located in the specific
areas referred to in the first paragraph. This is because in such
specific areas, a ‘title system’ applies, whereby legal
title is only legally transferred upon registration of the
In the rest of Italy, the banca dati ipotecaria merely
stores documents that prove ownership. That is because the general
system in place in Italy is a ‘deed system’, whereby legal
title is transferred though the deed and entries into the land
register are merely proof of ownership, as between the parties and
the wider world. Importantly, however, under the deed system, if
the same property is sold (or purported to be sold) to two
different buyers, the buyer whose purchase is registered first with
the land register (so-called ‘trascrizione‘)
prevails over the other one in having good title recognised.
By contrast, registration of the ipoteca with the land
register (so-called ‘iscrizione‘) causes the
security interest to come into existence (see question 2.5).
3.2 Is registration of real estate rights, transactions and
encumbrances mandatory? What are the consequences of failure to
The registration of real estate rights, transactions and
encumbrances is mandatory in the sense that:
- in those parts of Italy where the title system applies (see
question 3.1), title/interest in real property is not acquired
– as between the transferor and transferee and
vis-à-vis another purchaser – until the
transfer of title is registered with the land register;
- in those parts of Italy where the deed system applies (see
question 3.1), title/interest in real estate is not acquired
vis-à-vis another purchaser of the same property
until the transfer of title is registered with the land register;
- the ipoteca comes into existence as it is registered
with land register.
Notaries public have a legal duty to register the conveyancing
of land within 30 days of execution of the sale deed. Notably, this
obligation must be abided by irrespective of whether the purchase
price has been paid.
3.3 What are the formal and documentary requirements for
Registration is effected through the filing with the land
register of a nota di trascrizione accompanied by the deed
3.4 What is the process for registration?
The registration is done by the notary public.
3.5 Is registered information publicly accessible?
Yes, registered information is publicly accessible, for the most
part online. In particular, anyone can request via service
- a visura ipotecaria – an excerpt from the
banca dati ipotecaria that confirms good title and the
existence of encumbrances and security interests on the property;
- a visura catastale – an excerpt from the
Catasto setting out the estremi catastali, such
- the administrative identifiers for a property;
- the types of ownership rights and the names of their
- the floor and lot plan; and
- the rateable value for tax purposes.
4 Commercial leases
4.1 What types of commercial leases exist in your
Italian law contemplates several types of commercial leases
(contratti di affitto), as follows:
- general commercial lease;
- hotel lease;
- lease with a yearly rent in excess of €250,000; and
- lease of an entire business.
The right to occupy and use a commercial property can also be
granted pursuant to a comodato d’ uso gratuito, which
is broadly equivalent to a licence to occupy a property for free.
The comodato d’ uso gratuito is often used when the
property is undergoing renovations at the expense and under the
supervision of the future leaseholder.
4.2 Are the terms of a commercial lease regulated or freely
negotiable? What do they typically cover (eg, duration; security
deposit; rent; sub-letting; termination)?
General commercial leases: Articles 1615 to
1627 of the Civil Code set out the specific provisions that apply
to commercial leases, known as contratti di affitto;
together with the general provisions of the Civil Code on
contractual obligations, they form the body of law that applies to
These statutory provisions deal with the basic obligations of
the parties, which in the case of the leaseholder include the
obligation not to change the economic purpose of the property (eg,
turning a restaurant into a dental practice). It also apportions
cost for repairs between the parties, with the landlord having to
bear the cost of repairs beyond normal wear and tear.
Such statutory provisions – particularly those that are
there to protect the tenant – cannot be derogated from by the
parties, except in specific cases such as leases with a yearly rent
of more than €250,000.
The minimum duration for non-residential leases – other
than leases of hotels – is six years. After the first
six-year term, the lease is automatically renewed for a further six
years unless the landlord terminates it for one of the following
- The landlord or a close relative intends to use the property as
his or her home;
- The landlord or a close relative intends to run his or her own
business out of the property; or
- The landlord intends to tear down the property in order to
build a new one or to do a deep renovation.
As with residential leases, it is possible to stipulate a
transitory commercial lease that lasts for less than six years. The
transitory use must be objective (eg, office space needed for an
election campaign) and must be specified in the agreement.
It is also possible to grant a seasonal lease, under the terms
of which the tenant can only use the property for a given number of
months in each of the six years of the term.
Within the term of the lease, the landlord can only terminate
for good cause (eg, rent arrears).
If the landlord wants the lease to come to an end after the
second six-year term, it must give notice to this effect to the
leaseholder 12 months in advance of the end of the lease;
otherwise, the lease will tacitly renew.
The leaseholder can, at any time during the term of the
contract, terminate it for ‘serious reasons’ by giving six
months’ notice to the landlord.
As is the case with residential leases, the leaseholder has a
right of first refusal on the sale if the landlord invokes the sale
of the property as a reason to break after the first six years.
Unlike with residential leases, the leaseholder can sub-locate
the property by merely putting the landlord on notice. The landlord
has 30 days to object to the sub-location by raising ‘serious
concerns’ (eg, the risk of insolvency) relating to the
Notably, at the end of the lease of a retail unit, the landlord
must pay the leaseholder an amount of money on account of ‘lost
goodwill’ associated with the location of the business in the
leased premises, unless the leaseholder was in arrears with the
rent or terminated the lease on its own volition.
The amount that the landlord must pay is equal to 18 months’
rent; but if another business that is the same as the business of
the outgoing leaseholder is carried out on the premises, the
landlord must pay a further 36 months’ worth of rent by way of
Commercial rent can be pegged to the Italian official inflation
rate, but only in the ratio of 75% of the official rate per
Hotel leases: The statutory provisions that
apply to the lease of hotels depart from the general rules on
commercial leases in the following respects:
- The minimum duration of the lease is nine years, with tacit
renewal for another nine years, and the landlord must give notice
18 months before the end of the term; and
- The indemnity for loss of goodwill is equal to 21 months’
Leases with a yearly rent in excess of
€250,000: The parties to a lease of a commercial
property (including hotels but excluding buildings of historical
interest) that stipulates a yearly rent in excess of €250,000
can freely negotiate all terms of the lease derogating from the
provisions of the Civil Code outlined above.
The only provisions that cannot be derogated from are those
setting out the apportionment of maintenance costs between landlord
Leases of entire business: Italian law
contemplates the affitto di azienda – that is, the
lease of an entire business branch as a going concern, including
the premises it is carried out from – as a separate form of
contract to the lease of commercial properties.
When negotiating the parts of the contract for the affitto
di azienda that deal with the premises, the parties can
derogate from the provisions of the Civil Code that apply to
4.3 What are the formal and documentary requirements for
conclusion of a commercial lease?
Unlike with a residential lease – and somewhat
counterintuitively – according to the Civil Code a commercial
lease need not be agreed in writing unless it has a term of nine
years or more.
However, it is customary to agree in writing a commercial lease
– usually by way of either a notarial deed (atto
pubblico) or a contract executed under hand with certified
signatures (scrittura privata autenticata), although a
contract executed under hand is sufficient – because a
written copy of the contract is necessary to register it with the
Italian Inland Revenue, which is compulsory for tax reasons. Also,
failure to register the lease with the Inland Revenue renders it
null and void.
In connection with the documentary requirements, an energy
performance certificate (see question 9.5) must be either attached
to the lease contract or mentioned in it.
4.4 What is the process for concluding a commercial lease?
The negotiation of a normal commercial lease – that is,
one to which the provisions of the Civil Code apply – is a
less involved process than the negotiation of a commercial lease in
England and Wales. This is because some of the most heavily
negotiated terms in an English lease, such as dilapidations, are
out of the hands of the parties, because the Civil Code sets the
terms and they cannot be derogated from.
It follows that there is no need to break down the work of the
respective legal advisers into the preparation heads of terms,
lease reports and so on.
By law, the landlord provides to the leaseholder a fitness for
purpose warranty. That tends to make due diligence on the fitness
of the premises less pressing for the leaseholder than in the
United Kingdom. That said, recent case law has confirmed that it is
incumbent on the leaseholder to check that the property conforms
with all planning rules. This can be a rather involved process in
Italy, given the complexity of the rules in question. Hence, the
leaseholder usually requests the landlord to provide a contractual
warranty in that respect.
In terms of checking title in the property and limits to the use
that can be made of the property in view of third-party rights, the
fact that all relevant information (eg, easements) is registered
with the Catasto and is readily available online makes the
due diligence a speedier process than in the United Kingdom.
In Italy, there is no ‘exchange of contracts’ and
‘completion’ as separate stages of concluding a lease
agreement, by reference to the payment of a deposit or otherwise.
Deposits are rare in any event, as security is usually provided in
the form of a guarantee.
The leaseholder simply gets the keys to the property on the day
the tenancy begins. If a guarantee must be given to the landlord,
the instrument is typically delivered to it before the leaseholder
can enter the premises.
4.5 What are the respective obligations and liabilities of
landlord and tenant under a commercial lease, and what are the
consequences of any breach?
See question 4.2.
4.6 How are rent variations typically effected throughout the
term of the lease?
Any rent variation is agreed by mutual consent. This happens
rarely because rents are pegged to the inflation rate and leases do
last that long, so the landlord and leaseholder can agree a new
rent upon renewal of the lease.
In terms of supervening circumstances that warrant a rent
reduction (eg, the COVID-19 pandemic), the leaseholder benefits
from the protection afforded by Article 1467 of the Civil Code,
which enables a party to seek termination of a contract if
extraordinary supervening circumstances have upset the economic
imbalance of the bargain.
4.7 What taxes are levied on rental income?
Income from rental properties generally accrues to natural and
legal persons, which must pay, respectively, income tax and
corporation tax on it.
It is possible, however, for individuals to opt into the
‘cedolare secca‘ regime for short leases whereby
the landlord pays a flat tax on the rental income (usually 21%, but
it can go down to 10%) and the income does not accrue to the
landlord’s general income.
4.8 Can a commercial lease be triple net?
In Italy, it is not customary to differentiate between base rent
and additional rent. Therefore, ‘triple net’ does not
really apply as a concept.
Also, the apportionment of maintenance costs between landlord
and tenant is set out in law and generally cannot be derogated
The landlord customarily bears the burden of property taxes and
4.9 How are landlord and tenant disputes typically
Typically, a dispute between a landlord and leaseholder is
ultimately resolved in court.
The court of the place where the property is located has
In some circumstances, mediation must be attempted in the
initial phase of the court proceedings.
Commercial leases relating to large and high-value properties
often stipulate dispute resolution mechanisms either:
- that are alternative to court litigation (ie, arbitration);
- that eventually lead to litigation if an amicable solution
cannot be reached by the parties by way of an initial dispute
resolution mechanism (eg, mini-arbitration on technical
4.10 What types of guarantees are market practice and required
by landlords to secure the tenant’s obligations
Usually, the landlord will require a fideiussione
– that is, a suretyship from a bank.
The payment of a deposit by the leaseholder is rare.
5 Real estate transactions
5.1 What form do real estate transactions typically take in
Given that questions 2 and 4 have respectively dealt with
residential and commercial leases, we address the sale and
purchases of real estate only here.
In Italy, the sale of real estate can be validly carried out
only by way of a deed that is executed before an Italian notary
public. The deed is in the form of minutes of the conveyancing
procedure carried out by the notary in the presence of the seller
and the buyer or their attorneys.
Unless a preliminary contract is entered into, the payment of
the purchase price and the transfer of title happen as part of the
conveyancing at the notary’s presence, typically by way of the
buyer handing to the seller an assegno circolare –
that is, a banker’s draft. It is also common – especially
when the property is bought using a bank loan – for the buyer
to make a real-time bank transfer before the notary.
Both the payment of the banker’s draft and the real-time
bank transfer require the buyer to have a bank account in Italy, as
only a banker’s draft issued by an Italian bank can be cashed
at the seller’s bank, usually also in Italy. As to the
real-time transfer, it is still not possible to effect a real-time
transfer from a foreign account, even when the account is
denominated in euros.
Foreign buyers that do not have a bank account in Italy can
overcome this issue by using the notary’s escrow account, to
which the money is transferred prior to the deed. The money is then
transferred instantaneously by the notary to the seller when the
deed is executed.
It often happens that the buyer and seller agree the key terms
of the sale and that time passes before the conveyancing can
actually take place. In such circumstances, the buyer and capture
their agreement in a contratto preliminare (literally,
‘preliminary contract’), also informally known as a
Typically, upon signing the contratto preliminare, the
buyer pays the seller a holding deposit (so-called ‘caparra
confirmatoria‘) of between 10% and 20% of the purchase
price. The contratto preliminare then stipulates the date
by which the deed will be executed. Usually, the date is specified
as being of the essence – meaning that if the deed is not
entered into by the set date because the buyer pulls out of the
deal without good reason, the seller can keep the deposit. If it is
the seller that pulls out without good reason, the buyer can choose
- forcing the sale upon the seller (which ultimately requires the
intervention of the court); or
- asking the seller to pay double the caparra
Article 2775-bis of the Civil Code creates a security
interest in the form of a privilegio (see question 2.5) in
favour of the buyer on the property in relation to the debt arising
in connection with the repayment of double the caparra
The contratto preliminare is registered – usually
at the buyer’s expense – both with the Italian Inland
Revenue (so-called ‘registrazione’) and with the
land register (so-called ‘trascrizione‘).
If a forced sale is pursued by the buyer as the remedy for the
seller’s breach of the contratto preliminare, the
registration of the contratto preliminare is made to count
as the registration of the actual sale that ends up being ordered
by the court. Hence, the buyer’s title is first in time and
therefore prevails over the title registered by a third party (see
question 3.1) – that is, someone the seller tried to sell the
property to while the forced sale was going through in court.
5.2 Which players are typically involved in a real estate
transaction in your jurisdiction?
Aside from the seller and the buyer, the only player that is
necessarily involved in a sale and purchase of real estate is the
Other players that may be involved in a real estate transactions
- the lending bank;
- the surveyor;
- the estate agent.
5.3 Is the seller bound by a duty to disclose? What
representations and warranties will it typically make?
The deed of sale must contain a representation and warranty from
the seller that the property conforms with the data of the
Catasto, including the floor plan and lot map (see
If the deed of sale incorrectly quotes the Catasto, the
deed can be declared null and void, although it is possible to make
rectifications to it.
It is also important that the property sold conforms with the
planning rules (so-called ‘conformità
urbanistica‘). The consequences of a building having been
built in breach of planning rules can be serious (see question
Unlike with the cadastral conformity, there is no specific
obligation on the part of the seller to make a representation and
warranty in the deed of sale in respect of the
So, in respect of the conformità urbanistica,
the buyer can solely rely on Article 1337 of the Civil Code, which
imposes a general duty of good faith upon parties that are
negotiating a contract.
If a representation and warranty is made by the seller during
the negotiation about the conformità catastale or
indeed the conformità urbanistica but then turns
out to be incorrect, with the seller having wilfully misled the
buyer, the seller will be liable towards the buyer only in respect
of the loss caused by the specific misrepresentation (eg, lower
square footage), unless the representation and warranty was of such
importance that the buyer would not have proceeded with the
purchase had it known the truth, in which case the seller may be
liable for the entire loss (eg, associated with having bought a
building that must be torn down in part because it does not comply
with planning law).
Also, where breach of the representation and warranty affects a
fundamental element of the bargain that underlies the sale and
purchase deed, the deed can be declared null and void by a court.
This is not usually the desired outcome for the buyer, as it ends
up without a property and having merely an unsecured money claim
against the seller.
It is not uncommon for buyers to make the purchase conditional
upon a surveyor issuing a certificate stating that the property
that is being sold satisfies both the conformità
catastale and the conformità urbanistica. This
is because the buyer has recourse to the surveyor if problems
emerge after the purchase.
In any event, it is important for the buyer to conduct the
necessary searches with the Catasto and the banca dati
ipotecaria in order to establish good title, the existence of
encumbrances, the absence of security interests and so on.
Unfortunately, such searches do not reveal issues around the
conformity of the property with local planning rules. That can be a
rather involved process that requires the expertise of a local
surveyor. This is why the buyer often seeks a formal certificate of
conformity from one.
5.4 What due diligence is typically conducted in a real estate
The buyer typically either obtains directly online or asks the
notary to obtain:
- the visura ipotecaria (see question 3.5); and
- the visura catastale.
It is important that the visura ipotecaria goes back at
least 20 years.
Furthermore, a careful buyer will ask a surveyor to check that
the property complies with building regulations. That is
particularly warranted when the property is a standalone building
that was built by the seller.
5.5 What are the formal and documentary requirements for
conclusion of a real estate transaction?
The following documents must be provided to the notary in time
for the deed of sale:
- By the buyer and by the seller, if natural persons:
- a copy of their personal ID and indication if the place of
residence is different from that stated in therein;
- their codice fiscale (see question 2.3);
- any marriage certificate or certificate of unmarried
- a copy of any matrimonial regime agreement or any agreement in
relation to living together while unmarried; and
- for nationals of non-EU member states, a copy of the permanent
residence certificate and entry visa.
- a copy of their personal ID and indication if the place of
- By the buyer and by the seller, if legal persons:
- a copy of the personal ID of the directors;
- an excerpt from Companies House; and
- the board resolution authorising the purchase or sale (where
restrictions are placed on the directors’ powers, as shown by
the excerpt from Companies House).
- By the buyer, irrespective of whether a natural or legal
- a copy of the contratto preliminare (if any);
- the name and contact details of the estate agent (if any),
details of the fee agreed with him or her and evidence of any
payment already made to the agent; and
- if a loan has been applied for, the contact details of the
- By the seller, irrespective of whether a natural or legal
- a copy of the deed of purchase or, in the case of an individual
who inherited the property, the relevant probate
- a copy of the floorplans filed with the Catasto and of
other cadastral documents;
- proof of any payments already received by the buyer (eg, on
account of a holding deposit paid by the buyer);
- a copy of the contratto preliminare (if any);
- if there was an ipoteca, a copy of the document from
the bank confirming the repayment of the secured debt and evidence
from a notary that the cancellation of the ipoteca is
being taken care of by him or her;
- if the property is a flat, a copy of the apartment block’s
rules and regulations and a declaration from the building’s
manager certifying that all services charges and other expenses on
account of maintenance of communal parts of the building and so on
have been settled in full, and that there are no pending
- a copy of the building permits that were issued when the
building was built, including any variations to the original
project and any planning amnesty obtained;
- a copy of the certificate of fitness for use of the dwelling
issued by the local municipality (certificato di
agibilità ) or proof that such certificate has been
- if the property is situated on grounds of more than 5,000
square feet, the certificate of urban destination originally issued
by the local municipality;
- in the case of commercial premises, agricultural land or
apartment rented pursuant to Law 431/98, documentation regarding
possible pre-emption rights of third parties; and
- an energy performance certificate.
- a copy of the deed of purchase or, in the case of an individual
5.6 What is the process for concluding a real estate
transaction? How long does this take? What costs are incurred?
Question 4.3 explains how leases are entered into.
The sale of an Italian property and the transfer of proprietary
rights are generally concluded by way of the parties executing the
deed of sale in the presence of an Italian notary public.
The notary drafts the deed, based on the indication that the
buyer and seller give to him or her in relation to all elements of
The notary is usually chosen and paid by the buyer. This
notwithstanding, the notary acts in the best interests of both the
buyer and the seller, insofar as he or she ensures that the
conveyancing of title is valid.
The notary checks all relevant documents relating to the
transaction, such as the title deeds and the land register records.
To an extent, the buyer can rely on the notary not overseeing
anything major. Notaries are usually very professional and
The fact that the notary carries out some due diligence –
in the interests of carrying out a valid conveyance – does
not relieve the buyer from doing its own checks.
Notaries charge relatively high fees. It is normal for a notary
to charge €3,500 plus value added tax (VAT) for the
conveyancing of an average residential property worth, say,
The notary also collects from the buyer the imposta di
registro, ipotecaria and catastale and pays
it to the Italian government.
The time it takes to conclude a real estate transaction varies
significantly depending on factors such as the involvement of a
A cash buyer can complete a purchase in a matter of weeks. If
anything, searches are probably more straightforward in Italy than
in other countries because the basic information is readily
available via the Catasto and the banca dati
Another rather big cost in relation to the sale of a property is
the estate agent’s fees. Article 1755 of the Civil Code
provides that the estate agent is entitled to be paid a fee both by
the buyer and by the seller. The normal fee is 3% of the property
price that the agent is entitled to receive by the buyer and the
seller, so 6% in total. For very expensive properties, a lesser
percentage is deemed acceptable. It is noteworthy – and,
perhaps more than that, a trap for the unwary – that even if
one does not agree a fee with an Italian agent, the fee is due by
A further cost for the seller relates to the sourcing of an
energy performance certificate, unless there is one already and it
is less than 10 years old.
5.7 What are the respective obligations and liabilities of
buyer and seller, and what are the consequences of any breach?
The seller fulfils its obligation to transfer the title in the
property to the seller by:
- signing the deed (in those parts of Italy where the deed system
exists – see question 3.1); or
- signing the deed and procuring that the deed is registered with
the land register (in those parts of Italy where the title system
exists – see question 3.1).
The buyer’s obligation is to pay the purchase price. This
obligation is only contractual in nature. This means that
non-payment by the buyer of the purchase price does not prevent the
passing of title. The notary public is not there to chase payment
from the buyer if the seller agrees that the payment is deferred.
In fact, no matter what, the notary is obliged by law to register
the sale within 30 days of the deed.
In order to secure its right to receive the purchase price from
the buyer, the seller can register an ipoteca legale on
the property (see question 2.5). Alternatively, the seller will
ensure that the deed includes a provision whereby it retains title
in the property until the purchase price is paid in full.
Question 5.3 discusses the liability of the seller in respect of
a breach of representations and warranties in relation to the
characteristics of the property and other key elements of the
5.8 What taxes are payable on a real estate transaction?
The main taxes that are levied in respect of a real estate
transaction in Italy are the imposta di registro (broadly
the equivalent of stamp duty land tax in the United Kingdom) and
VAT – generally equal to 22% of the purchase price –
and imposta di registro – equal to 9% of the value
of the property calculated on the basis of the rateable value
recorded at the Catasto – are alterative to one
another. Generally speaking, only one of the two can be levied in
respect of a transaction.
The imposta di registro is levied by default. VAT is
levied instead in specific circumstances.
Although the imposta di registro and VAT are generally
alternative to one another, when a sale is subject to VAT, instead
of the imposta di registro not being levied at all, it is
levied for the fixed amount of €200 only.
In Italy, the seller and buyer are jointly and severally liable
to pay the imposta di registro. However, it is customarily
the buyer/leaseholder that pays the tax.
Sale and purchase transactions: The sale of a
building that is a ‘bene strumentale per natura‘
– that is, a building that lends itself only to a specific
business use (eg, a hotel) – is subject to VAT at the full
22% rate or at a reduced rate of 10% if the property recently
underwent major renovations and is being sold by the developer. In
this context, the ‘developer’ is the owner of the land and
whoever commissions and pays for the construction works, not
necessarily the building company that carries out the works.
The sale of a residential building is subject to VAT at 10% if
the building is sold directly by the developer and the developer
opts for VAT instead of paying the imposta di registro.
The sale of land that can be developed is subject to VAT at 22%.
The sale of land that cannot be developed (eg, agricultural land)
is exempt from VAT.
The sale of all kinds of real estate also warrants the payment
- imposta di registro;
- imposta ipotecaria; and
- imposta catastale.
Generally speaking, the imposta ipotecaria and the
imposta catastale are, respectively, equal to 3% and 1% of
the of the value of the property, calculated on the basis of the
rateable value recorded. For example, on the sale of a piece of
land that cannot be developed, they come to €50 each.
Leases: Residential and commercial leases are
not subject to VAT.
However, the landlord can opt into VAT at 10% for residential
properties and at 22% for commercial properties, thereby avoiding
the imposta di registro.
If VAT is not opted into, the imposta di registro is
levied at a rate of 2% for residential leases and 1% for commercial
leases. The duty is calculated on the total amount of the rent that
is to be paid during the term of the lease; and the parties can opt
whether to pay the tax in a single go or in staggered yearly
payments for the term of the contract.
6 Real estate finance
6.1 Who are the most common providers of real estate finance in
your jurisdiction? Do any restrictions apply in this regard?
The most common providers of real estate finance in respect of
Italian residential property are Italian banks.
There is nothing to prevent a foreign lender that complies with
the necessary regulatory requirements (in terms of both licensing
and compliance with the rules on consumer credit) from financing
the purchase of a property in Italy. However, this rarely
In respect of Italian commercial real estate operations,
operators range from Italian banks to foreign institutional
investors, such as pension funds and asset managers.
6.2 What forms of real estate finance are available in your
The forms of real estate finance that are available in Italy are
broadly the same as those that are available in other
Individuals resort to loans from banks secured by an
ipoteca (see question 2.4).
In relation to corporate transactions involving Italian property
(ie, when the target that owns the Italian asset is taken over),
Italian law imposes limits on leveraged buyouts, which are a common
way to structure deals, particularly in the United States.
A leveraged buyout involves the buyer funding a significant part
of the acquisition by way of a loan that is secured either on the
target’s assets (the Italian property) or on the target’s
shares. The loan is typically construed as deferred consideration
paid for the shares, whereby the outgoing shareholders effectively
agree to ‘lend’ to the buyer the deferred purchase price,
but want security over the asset or the shares in return. The
transaction is typically completed by merging the target with the
acquiring vehicle, which is usually a special purpose vehicle
(SPV). The merged entity ends up holding the debt.
Article 2358 of the Civil Code makes the direct or indirect
provision by a company of a loan or guarantee to buy own shares
subject to a special shareholders’ resolution on the back of a
report confirming, among other things, that:
- the operation is in line with the company’s long-term
- the creditworthiness of the buyer/borrower has been
Importantly, the loan or guarantee limit cannot exceed the
company’s distributable profits and available reserves set out
in the latest balance sheet approved by the shareholders. There is
an outright ban on accepting shares of the company as collateral
for the loan.
Article 2501-bis of the Civil Code makes the merger
between the Italian acquiring vehicle and the target subject to a
‘merger proposal project’ supported by a third-party expert
report setting out, among other things, the financial resources
that are available to satisfy the debt of the merged entities.
The above provisions have the effect of reducing the leverage
and requiring the SPV to be financially supported in a transparent
6.3 What formal, documentary and other requirements do lenders
typically require of borrowers?
In relation to borrowers that are natural persons, apart from
the obvious identification documents – which in Italy do not
include proof of address, because each citizen has his or her own
individual ID and codice fiscale (see question 7.1)
– the documentation requested by the lending bank is broadly
the same as everywhere else: that is, documentation that is
necessary to evidence creditworthiness and affordability of
interest repayment such as payslips for employees and tax returns
for self-employed people.
The lender will also require documentation concerning the
property – first and foremost a valuation report prepared by
a lender-approved surveyor, who is then typically also asked to
produce the visura catastale and visura
6.4 What type of security interests are typically required by
The security interest that is required by the bank that finances
a property acquisition is the ipoteca (see question
As an alternative to the ipoteca, the lending bank
typically seeks a fideiussione – that is, a
suretyship issued by another bank.
The lender may also be willing to accept a fideiussione
issued by individuals (eg, the parents of the borrower) or to
create an ipoteca over an unencumbered property that is
different from that which is being purchased.
6.5 What is the process for obtaining real estate finance? What
costs are payable?
An application is made to the bank to obtain the loan.
As part of the application, the prospective borrower must
involve the bank in all key aspects of the transaction and will
share with it all relevant documents, including the contratto
preliminare if one is entered into.
The bank will appoint a surveyor to carry out a valuation of the
property. The cost of the surveyor is usually charged to the
prospective borrower. It is in the region of €400 for an
If the survey is positive, the bank will grant the loan, subject
in principle to further due diligence.
The bank remains involved in the subsequent stages of the
conveyance – from the further due diligence on the property,
which is typically carried out by the same surveyor who did the
report, all the way to execution of the deed – as the bank
has an interest in checking that the deed mentions the loan and the
ipoteca, and that the latter is registered (see question
6.6). The notary will also liaise with the bank in connection with
the loan drawdown/payment mechanics on the day of the deed.
6.6 How is security enforced in case of any breach?
In order to start enforcement proceedings in Italy, the creditor
must obtain a titolo esecutivo (literally, an
Insofar as a loan that is secured by way of ipoteca has
been expressly mentioned in the deed of sale (see question 5.5), if
the borrower then defaults under the loan, the combination of such
documents constitutes the titolo esecutivo that the lender
can serve on the borrower alongside the atto di precetto
(last formal warning to pay) giving the borrower 10 days to repay
If the borrower does not pay in time, the lender can start
enforcement proceedings in respect of the property, known as
esecuzione immobiliare. These proceedings are overseen by
the court of the place where the asset is located. The process is
very detailed and takes a considerable amount of time to complete.
- a court-appointed receiver taking control of the property;
- the property ultimately being either appropriated by the lender
or sold under the supervision of the court; and
- the proceeds of the sale – after deduction of the costs
of the enforcement proceedings – being paid to the
We are not aware of an esecuzione immobiliare that has
taken less than two years to complete. Where the charged property
is a family home, the borrower is entitled to renegotiate the loan
with the bank before the esecuzione immobiliare can go
ahead. This extends the duration of the proceedings even further.
The average length of time of an esecuzione immobiliare is
probably in excess of four years.
7 Real estate investment
7.1 Who are the most common investors in real estate in your
jurisdiction? Do any restrictions apply in this regard?
Italian real estate has always been popular with foreign
investors, both individuals and corporates.
Individuals who are not Italian nationals or nationals of an EU
member state cannot purchase a property in Italy in their name
unless this is specifically allowed by way of an agreement between
the Italian state and the nation of which the individual is a
national. Italy has agreements of this kind with most countries,
including the United States. By contrast, the United Kingdom does
This has created problems with English nationals who, after
Brexit, can no longer reside habitually in Italy unless they obtain
permanent residence, which is difficult.
Obviously, individuals and corporate vehicles that feature on
sanctions lists that apply in Italy cannot purchase a property
7.2 What investment vehicles are typically used in your
jurisdiction? What are the benefits and drawbacks of each?
International investors that finance the acquisition of Italian
commercial real estate use either an Italian special purpose
vehicle (SPV) – typically a società a
responsabilità limitata (broadly the Italian equivalent
of an English company limited by shares) – or a foreign
While purchase through a foreign SPV can undoubtedly bring tax
advantages, Italy has very strong ‘rules of attraction’
when it comes to taxation. The foreign SPV will be deemed to be
established in Italy and may have to pay tax there if it carries
out activities such as the contracting of building works or the
leasing out of the property.
7.3 How are these vehicles established and administered in your
Italian corporate vehicles that are set up to own real estate do
not differ in any way from corporate vehicles that engage in other
kinds of business.
Foreign corporate vehicles owning real estate in Italy may have
to create a stabile organizzazione (‘stable
organisation’) in Italy for tax purposes. The stabile
organizzazione will be issued with an Italian value added tax
number and with a separate ID number that is necessary to
participate in the exchange of electronic invoices, which is
compulsory in Italy.
8 Planning and zoning
8.1 How is land use regulated in your jurisdiction?
In Italy, the rules governing the use of land emanate from the
central state as well as from local government which has three
- regions, of which there are 20;
- provinces, of which there are 103; and
- municipalities, of which there are more than 8,000.
The power to apply the rules is largely devolved and the
municipality is the central point of contact when seeking planning
permission. That said, the province has its own powers in
connection with geological, hydrological and environmental
Each municipality has its own Piano Regolatore Generale
(planning masterplan), which divides up the territory of the
municipality into zones, each of which has separate different
functions and permitted uses that are predefined by law,
- zones of historical interest;
- built-up/residential zones;
- partially built-up/residential zones which can be developed
- agricultural zones; and
- zones for public buildings such as schools, public offices and
The planning masterplan sets out the general planning parameters
that are relevant to each zone, such as:
- allowed uses;
- land utilisation capacity;
- building height; and
- minimum distances between buildings.
The planning masterplan also sets out more detailed building
limitations within each zone. For example, it may identify areas
within a wider built-up/residential zone where it is not possible
to alter the external appearance of buildings or where only
restoration and maintenance are allowed.
If the planning masterplan goes into sufficient detail as to the
parameters that are necessary to evaluate the granting of a
building permit by the municipality, the developer need only apply
for a building permit.
Alternatively, if the planning masterplan is not sufficiently
detailed, a piano attuativo (‘implementation
plan’) must be adopted by the municipality based on the project
submitted by the developer. What follows is the entering into of a
convenzione urbanistica (‘planning agreement’)
between the municipality and the developers. The planning agreement
sets out, among other things, what public utilities and public
infrastructure the developer must build in order to ensure the best
public utilisation of the new development.
8.2 What is the process for obtaining planning permission? How
long does this take? What costs are incurred?
In Italy, a permesso a costruire (‘permission to
build’) is generally required to erect new constructions and to
undertake works on existing buildings that involve structural
changes, increased volumes or elevations combined with a change of
Something akin to the UK permitted development exists, but it is
narrower in scope as it does not include extensions. Even work that
does not require a permission to build must be brought to the
attention of the municipality’s sportello unico dell’
edilizia (‘single counter for planning’) before work
can start, unless the works are really minor (eg, the replacement
of flooring or the installation of solar panels).
Hence, instead of needing to apply for permission to build the
following, notice must be given to the municipality prior to
starting the construction works:
- a comunicazione di inizio lavori (CIL) for temporary
- a comunicazione di inizio lavori asseverata (CILA)
(where ‘asseverata‘ means ‘certified’) for
minor maintenance works that can, however, concern the
fabric/structure of the building; and
- a segnalazione certificata di inizio attività
(SCIA) for major maintenance and renovation works.
The SCIA is a form of enhanced CILA, insofar as it requires that
the name of the building contractor and other information be
specified. Both the CILA and the SCIA must be prepared by an
architect or civil engineer, who will usually also have prepared
the project inclusive of all drawings that must be submitted
alongside the CILA or SCIA.
Once the CILA or SCIA has been submitted, the building work can
commence straight away and the municipality has 30 days to inspect
the site and order the cessation of works if it finds any
Legislative Decree 222 of 25 November 2016 broadened the scope
of the SCIA (creating the so-called ‘SCIA 2’) to include
works that entail a ristrutturazione – that is, a
major renovation, possibly involving an increase in the volumes,
elevations or outside appearance of existing buildings without
changing their intended use. It is also possible to use a SCIA to
seek, within certain limits, a variation to an existing building
Notably, the SCIA 2 can also be used to erect a new building,
provided that the local planning masterplan goes into sufficient
detail as to the specifications of new buildings in that zone.
However, in this case, the works can start only once 30 days have
elapsed from submission of the SCIA.
The introduction of the SCIA 2 has drastically reduced the
situations where a fully fledged permission to build is required.
This is now essentially confined to:
- the erection of new buildings in zones where the planning
masterplan is not sufficiently detailed;
- the undertaking of major renovation works aimed at changing the
intended use of a building; and
- the undertaking of works that require a variation to an
existing permission to build in relation to the alteration of the
façade of listed buildings.
A fully fledged permission to build can be obtained through a
rather detailed and lengthy process which generally involves the
following steps, although the procedure is simplified in some
- The application and the project are submitted to the single
counter for planning of the local municipality.
- The single counter for planning has 10 days to appoint the
responsabile del procedimento (‘case officer’),
whose name will be communicated to the applicant.
- The case officer has 60 days to formulate a draft permission to
build, which may involve minor suggestions as to how the project
needs to be changed. The case officer can also indicate that the
application cannot be accepted as it is, specifying why this is the
case. The case officer can also request further
documentation/information that he or she cannot obtain from public
sources. In that case the 60-day timeframe is stayed until the
documentation/information has been submitted.
- A final decision is made by the chief planning officer within
30 days – or 40 days where the case officer has expressed his
or her dissent to the application – from submission of the
draft permission to build by the case officer.
- If the case officer does not object to the application
specifying the reasons for the objection, the permission to build
is granted by silenzio assenso (silent assent) upon the
expiry of 30 (or 40 in case of objection without reason) days of
the case officer receiving the draft permission to build.
All the above deadlines are doubled where the project is
The costs involved in obtaining a CIL, CILA, SCIA or a standard
permission to build are:
- the fees of the architect or engineer to prepare, complete and
submit the application (on top of the fees for the preparation of
the project which may need to be submitted with it);
- the processing fee payable to the municipality, which usually
does not exceed €200; and
- the duties payable to the municipality on account of
contributions for the creation of new public infrastructure
(so-called oneri di urbanizzazione) and an extra
construction duty (so-called oneri di costruzione). Such
costs are calculated in accordance with algorithms and are usually
in the lower thousands of euros for small projects, but can reach
hundreds of thousands of euros for large projects.
8.3 Can a planning decision be appealed?
An adverse planning decision can be reversed if the applicant
succeeds in bringing a case to the Tribunale Amministrativo
Regionale, which is the kind of court where one can sue a
public body in Italy. The case will typically revolve around the
case officer having unreasonably refused the original application
and having failed to propose reasonable alternative solutions.
8.4 What are the consequences of failure to obtain planning
permission or to comply with a planning condition?
Failure to obtain or comply with planning permission can result
in a fine as well as an order from the municipality to tear down
8.5 Is expropriation of land possible in your
Yes, expropriation of land is possible in Italy.
Where the state declares a piece of land to be of ‘public
utility’, the legal owner can be dispossessed of it but must be
paid an indemnity. The indemnity is equal to the market value of
the land, in case of land that can be built on. In the case of
agricultural land, the indemnity is based on the rateable value
(see question 3.1) and therefore normally the indemnity yields a
much lower amount than market value.
8.6 Is confiscation of land possible in your jurisdiction?
The permanent dispossession of land by the state without
compensation to its legal owner is not possible in Italy.
9.1 What main environmental legal provisions apply to the
development, use and occupation of real estate?
Italian law distinguishes between the protection and
conservation of the natural landscape and historical and artistic
heritage from an aesthetic standpoint on the one hand; and the
protection of the environment intended as the protection from
pollution on the other. In turn, the body of law in respect of the
latter is very heterogenous. For example, noise pollution is
governed by a law that is separate from the law that governs soil
In relation to the protection and conservation of the natural
landscape and of Italy’s historical and artistic heritage from
an aesthetic standpoint, if planned construction works will affect
a zone or a specific building of particular interest, as part of
the application to obtain a building permit, the developer will
need to obtain the approval of the relevant governmental bodies
(usually at the provincial and regional level) prior to commencing
The province will assess the geological and hydrological aspects
of a project from information that is submitted alongside the
planning permission to the municipality.
In relation to the prevention of pollution, the key laws
- Legislative Decree 447 of 26 October 1995 enacting the
framework law on noise and sound pollution;
- Legislative Decree 152 of 3 April 2006, as amended by
Legislative Decree 4 of 16 January 2008, enacting the Code of the
- the specific provisions of the Penal Code setting out criminal
offences against the environment, some of which are particularly
relevant to the construction industry, such as:
- damage to Italy’s archaeological, historical or artistic
- destruction or defacement of natural beauty;
- collapse of buildings or other disasters; and
- environmental pollution.
- damage to Italy’s archaeological, historical or artistic
Unless a new development involves the construction of major
infrastructure – such as public roads, industrial storage
facilities for chemical products or energy production facilities
– there is no need to proceed with a separate evaluation of
the environmental impact of the project as part of the planning
That said, interventions in certain coastal areas do require an
environmental impact assessment. For example, the building or
renovation of a leisure resort in a coastal area set in a natural
landscape will warrant an environmental assessment, which is a
relatively involved process.
9.2 Who can be held liable for environmental contamination and
how are clean-ups effected?
In Italy, only the party that carried out the environmental
contamination (either causing it directly or allowing it to happen)
can be held liable for it.
According to Articles 242 and 244 of the Code of the
Environment, in case of environmental contamination, the obligation
to carry out the clean-up “rests upon whoever person is
responsible for the pollution, which the public authorities have to
duty to identify or look for”.
The public authority that is responsible for identifying the
polluter for the purpose of ordering a clean-up is the province. If
the province is unable to identify the polluter, the clean-up must
be carried out at its own expense.
When the province identifies an instance of environmental
contamination, it will issue the owner and user of the land with a
formal notice that usually limits the use of the polluted land. The
province has a privilegio speciale (see question 2.5) on
the polluted land as security of the costs of the clean-up. Whoever
is in control of the land (including the owner or leaseholder) or
has an interest in the contamination being removed can proceed with
the clean-up at its own expense.
If nobody steps forward to undertake the clean-up and the public
authority must intervene and take care of this itself, the public
authority can recover the costs of the clean-up from the owner of
the land, provided that the province can demonstrate that:
- it made all reasonable efforts to identify the actual polluter;
- it found the polluter but was unable to take action against
This mechanism is as close as Italian law comes to the strict
liability of the owner of the land under English law.
The Code of the Environment has also introduced non-criminal
offences in relation to the discharge of wastewater, the disposal
of waste and atmospheric emissions, These are policed by the local
authorities, which can impose fines and/or order a clean-up.
9.3 What environmental provisions and considerations should be
factored into real estate transactions?
Anyone that is considering purchasing a property in Italy which
is located in a place of outstanding natural or manmade beauty
should be aware that conservation rules are very strict and will
effectively prevent major interventions, particularly to the
exterior of the building.
It takes time and local expertise to obtain the necessary
permits to carry out interventions, because many different local
and central government agencies are responsible for various
aspects. For example, in coastal zones the Capitaneria di
Porto – essentially the coastguard – must be
consulted in relation to the use of the coastline for water
9.4 What initiatives are in place to promote green buildings
and energy efficiency in your jurisdiction?
The main initiatives in Italy to promote energy efficiency are
the Superbonus 110 and the Ecobonus.
These are income tax/corporation tax credit schemes available to
natural persons, cooperatives and non-profit organisations, whereby
the value of certain kinds of building works – up to 110% in
the case of the Superbonus 110 and between 50% and 110% in the case
of the Ecobonus – can be deducted from future payments of
income tax. Such tax credits:
- can be directly transferred to a bank, which discounts them for
- can accrue to the benefit of the construction company which
accepts them as consideration for its work (so-called
‘sconto in fattura‘).
The following types of interventions qualify for the Superbonus
- thermal insulation of walls and roofs in apartment blocks or,
under certain conditions, single dwellings;
- installation in apartment blocks or, under certain conditions,
single dwellings of central state-of-the-art condensation boilers
or heat pumps;
- installation of solar panels, energy accumulators and charging
points for electric vehicles, if made in conjunction with the
installation of a new heating system; and
- replacement of windows, if made in conjunction with the
installation of a new heating system.
The following types of interventions in any kind of new or
existing residential building qualify for the Ecobonus:
- replacement of windows;
- solar shielding;
- installation of biomass boilers;
- installation of state-of-the-art condensation boilers or heat
- installation of solar panels including accumulators and
charging points for electric vehicles and so on;
- removal of architectural barriers; and
- other interventions that enhance energy efficiency, such as
connection to a district heading network.
There are no state-sponsored schemes in Italy that incentivise
the construction of new green buildings. However, it is possible to
obtain a grant from the European Union to build an eco-sustainable
wooden house to use as a first/main home.
9.5 What types of environmental certifications apply in your
In order for a building to be sold or leased, an energy
performance certificate (APE) must be prepared for that building by
an architect, a structural engineer or a surveyor. It must then be
handed to the buyer or tenant prior to entering into the contract,
or must be mentioned in the contract or attached thereto.
The APE has the same content as a British energy performance
certificate. Both reflect the format set out in Directive
10 Trends and predictions
10.1 How would you describe the current real estate market and
prevailing trends in your jurisdiction? Are any new developments
anticipated in the next 12 months, including any proposed
The Italian property market is a ‘tale of two
Residential properties have generally been decreasing in value
over the last 15 years or so. However, the top-end residential
market in big cities and art capitals has remained strong. Luxury
properties in places such as the Emerald Coast in Sardinia, the
lakes in Northern Italy and Puglia are still very much in demand,
especially by foreign buyers.
Rents for flats and small retail units have, in the main, been
stagnating and are not keeping track of inflation.
Industry and light industry have been suffering due to the
general state of the economy after the COVID-19 pandemic. However,
some markets are still very active, such as the market for
warehouses located in and around big cities.
Demand for hotels also remains very strong. Over the last few
years, there has been fierce competition – particularly among
foreign institutional investors – for luxury hotels in
The development of greenfield and brownfield sites has generally
been weak in recent years. Italian banks have not been financing
such developments and foreign investors tend to shy away from such
projects, largely due to the complexities of Italian planning law.
New residential developments that have been completed in recent
years have generally been self-financed.
In terms of future developments, possibly the most important one
is the recent approval by the Italian Parliament of the framework
law for the reform of the Catasto, which will enter into
force on 1 January 2026.
The reform seeks to address several shortcomings of the
Catasto – mainly in relation to how the rateable
value of properties, which informs the payment of the Italian
equivalent of stamp duty land tax (see question 5.8), is
Rateable values were generally much lower than market values
before the property markets started falling in 2009. Ever since, as
market values fell, they have been converging with rateable values.
However, the two are still very much out of sync and there is an
element of unfairness in the way that rateable values are set in
the first place. For example, the rateable values for retail units
are inflated because they assume a profitability that no longer
exists in an era when online shopping has taken hold and the high
streets have been decimated. Generally speaking, though, the
rateable values must be adjusted upwards.
The reform of the Catasto will hopefully address such
issues, although it is mainly perceived by Italian citizens as a
‘money grab’ by the government, which is obviously
interested in increasing tax revenues. The changes are set to be
achieved partly by empowering local government in relation to the
assessment of real estate. In remains to be seen whether
Italy’s typically under-resourced local authorities will be up
to the task.
11 Tips and traps
11.1 What are your top tips for the smooth conclusion of a real
estate transaction and what potential sticking points would you
Our top tip for foreigners looking to buy property in Italy is
to acquire a degree of familiarity with how the Italian
conveyancing system works. They should not make assumptions based
on how things work in their own country.
For example, Italian estate agents act in the knowledge that
their entitlement to fees is established by law (see question 5.6),
which means that they occasionally ‘forget’ to tell a
foreign buyer that they will charge a 3% commission. The first time
the foreign buyer finds out about the fee is usually when it is
presented by the agent with the contratto preliminare to
sign. The contratto preliminare is often presented by the
agent as a mere formality, like a booking form. In fact, the
contratto preliminare is a powerful tool in the hands of
both the buyer and the seller (see question 5.1).
Foreigners that embark upon development projects should also be
aware of the difficulties in in navigating Italian bureaucracy.
Even arranging basic things such as electricity and water supply to
the building site can be complicated and can take an inordinate
amount of time and effort. This in turn causes the developer to
become overly reliant on local ‘fixers’ – typically
the contractors who do the work – and often these people end
up taking advantage of their position of power.
Hence, engaging capable Italian lawyers at an early stage of an
acquisition or redevelopment project is key.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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A vintage Dallas streetcar has found a temporary new home: The trolley, once tucked inside the Spaghetti Warehouse in Dallas’ West End, will find a safe and secure berth at Orr Reed Architectural Co., a salvage store located a few miles south of downtown Dallas, which will provide temporary quarters while the vehicle gets renovated in preparation for its final home.
The trolley was one of the original streetcars that ran through East Dallas nearly a century ago. It surged to fame in 2019 when Spaghetti Warehouse closed after 47 years, and the company held a giant auction of its extensive collection of memorabilia.
The streetcar attracted an anonymous buyer, but that buyer bailed once they encountered the difficulties of removing the trolley from the location.
The trolley was then bequeathed to the Junius Heights Historic District, a neighborhood association representing more than 800 homes in Old East Dallas, east of Munger Place, south of Swiss Avenue and southwest of Lakewood.
The organization wanted to save the trolley because of its role in the original streetcar program that was key to the establishment of Junius Heights and East Dallas, says a spokesperson who serves on the Junius Heights’ trolley committee, and who also has a personal connection.
“The streetcar lines were built by the developer who was selling lots in East Dallas,” she says. “Workers could take it to their offices downtown. It operated until the 1950s. My grandfather was a delivery driver for a paper company in Richardson that would deliver paper to offices in downtown Dallas. He could park his truck outside downtown and get on a subway that took him underground into the bottom of the office buildings in Dallas.”
It’s one of the few streetcars from that era that still exists.
“It was of particular interest to our neighborhood since it has ‘Junius Heights’ in that little strip across the front where it shows the next stop,” she says.
The trolley has no wheels or motor parts, so it won’t be mobile. The organization’s goal is to make it an interactive museum attraction.
“We hope that it can continue the purpose it served inside Spaghetti Warehouse where people can experience sitting inside a street car — but back in our neighborhood,” she says. “We still need to determine the best location where it can be secure and have protection from the elements, but the objective is to preserve it and save it from the scrapyard.”
When they were seeking a place where it could stay during renovations, up stepped Hannah Hargrove, owner of Orr Reed, which is dedicated to finding new homes for items of value such as reclaimed hardwood, antique lumber, doors, and wrought iron fences.
“I actually wanted to buy it — it’s a piece of our city’s history,” Hargrove says. “But when I read the fine print on the auction, I knew there was no way I could get it out. It was heartbreaking. Then during the pandemic, I was approached by the Junius Heights Historic District. who had raised enough funds to move it.”
“We determined that we could probably make the room and that our gates were big enough to accommodate its entry,” she says.
The trolley is currently being disassembled in anticipation of the journey, which they’re hoping will take place this fall.
Hargrove and her team spent much of August reconfiguring their warehouse to make space. (They’ve also been hosting sales to make space, check out the vintage sky-blue Frigidaire wall oven.)
“It’s going into a corner where we usually store larger furniture items and really nice windows — nothing that was easy to move,” Hargrove says.
“But we wanted to make sure that this piece of city history was preserved,” she says. “We care about these things. Do I need the space, of course I do — but this is a piece of our history we cannot get back.”
Editor’s note: A lot happened this week, so here’s your chance to get caught up. Read on for the week’s most popular headlines. Looking for the best things to do this long holiday weekend? Find that list here.
1. Art of Banksy comes to Dallas in immersive event with signature secrecy. Street artist Banksy has always been known for his secrecy, and Dallas will get a taste of that when the new immersive art exhibition, Banksyland, comes to the city for two weekends, June 24-July 4.
2. Rare authentic sushi restaurant Tatsu Dallas debuts in Deep Ellum. A new restaurant from a critically acclaimed sushi chef has opened in Deep Ellum: Called Tatsu Dallas, it’s an edomae-style restaurant from chef Tatsuya Sekiguchi, located in the recently renovated Continental Gin Building at 3309 Elm St., and it opened on May 25.
3. 3 new developments add 456 ‘starter’ homes to booming Dallas suburb. A building boom of new homes is beginning in one fast-growing Collin County city: Meritage Homes is building a total of 456 homes across three new communities in Melissa.
4. Dream Hotel brand enters Texas with cool new boutique hotel in Frisco. Frisco is getting a new boutique hotel from a brand that’s new to Texas: Called Dream Frisco, it’s from New York-based Dream Hotel Group and will open as part of Firefly Park, a 230-acre mixed-use development that will also include offices, retail, homes, and restaurants.
5. Enchanting Dallas dinner party whisks Family Place patrons to Provence for the evening. On a picture-perfect evening May 12, 175 guests gathered in the Nasher Sculpture Center Garden for an elegant outdoor “Evening in Provence.” They were there to raise crucial funds for the Dallas-based family violence agency The Family Place.