Real estate ownershipi Planning
Under Italian law, any building activity (except for certain limited building activities of minor relevance) requires, depending on the type of building works:
- the issue of a building permit by the competent municipality;
- the filing, by the person interested in carrying out the works, with the competent municipality of a self-certificated declaration (SCIA); and
- the filing, by the person interested in carrying out the works, with the competent municipality, of a certified communication of commencing of the building works.
Any building activity carried out in breach of the applicable laws and regulations and not cured by the issue of building amnesties and payment of relevant fines, may be sanctioned with administrative fines and, in the case of major breaches, with criminal sanctions and orders for demolition of the works carried out.
With respect to planning restrictions, in the course of the due diligence over the real estate property, it is useful to review the town-planning certificate, which lists the town-planning regulations applicable to the area in which the property is located, and identifies the existence of certain burdens (e.g., landscape, monumental, architectural, use). In such respect, a zoning development plan and town-planning agreement (i.e., an agreement between the owners and the local authority) may provide for limitations to use or transfer of the land or the property.ii Environment
Italian law contains the 'polluter-pays' principle. Nevertheless, as soon as an owner of land becomes aware that it is contaminated, the owner is required to report it to the competent authorities and implement the precautionary measures proscribed by applicable laws and regulations or ordered by the competent authorities.
Further, in relation to buildings, Italian law provides for a census of the buildings in which asbestos-containing materials are present. Italian laws and regulations set out obligations to manage or remove asbestos-containing materials within buildings, which also depend on the features and status of the material, or on the use of the building, or both.iii Tax
The following indirect taxes will apply to the transfer of ownership of real estate located in Italy: value added tax (VAT); registration tax; mortgage tax; cadastral tax; and minor stamp duties.
The tax regime applicable to the transfer of the ownership of a real estate depends on the characteristics of the parties (seller and purchaser), and on the features of the property being transferred.
The disposal of real estate made by a person that is subject to Italian VAT, is subject to VAT. The VAT regime applies depending on whether the real estate property qualifies as residential or non-residential (e.g., commercial), and on whether it has been built or the subject of certain renovation works in the five years prior to the sale and purchase agreement for the property.
On the other hand, the sale of real estate made by a person that is not subject to Italian VAT is outside the scope of the VAT regime.iv Finance and security
Real estate financing granted in accordance with Italian law generally provides for the following security package:
- mortgage over the property – mortgage is an in rem security granting to its holder the right to start an expropriation procedure over the property and to be privileged (with respect to other creditors) in the distribution of the amount recovered from the sale of the property;
- assignment by way of security of the receivables arising from the deed of sale and from the other agreements concerning the sale and purchase of the property;
- assignment, by way of security, of the receivables arising from the lease agreements relating to the property and relevant guarantees;
- for works to be performed on the property, assignment by way of security of the receivables arising from the relevant contracts for the works;
- assignment by way of security of the receivables arising from an interest hedging agreement;
- assignment by way of security of the receivables arising from the insurance relating to the property (i.e., 'loss payee clauses');
- pledge over the bank accounts of the borrower; and
- depending on the structure of the investment, (i.e., a share or fund unit deal), pledge over the shares or the units of the borrower.