dondodi

hello! has anybody bought a property here in Italy from a British seller (who has moved back to the UK already) and payed for it in Sterling?

Beside the obvious, the exchange rate and fees to transfer the money is there an advantage in doing so? Sounds like bureaucracy hell to me and I am worried I would have to pay two sets of legals. I also know this property has a UK mortgage on it...

I am interested in a property and the British seller has suggested to pay for it in Sterling, could be appealing as my money is in the UK, I will not need a mortgage on it (I hope )

thanks!

dido2

Sorry, Don't know the legalities but I would be extremely careful of this, make all the checks and when in doubt leave it alone. Try the Italian embassy they may help. goodluck. didi2

dondodi

Thank you for your reply Dido2.
As an update, I have spoken at length with a trusted commercialista and it is doable as long as the money passes hands via an official body.
Will need to ensure with a Notaio first, but I am now wondering whether my Bank in the UK will let me have a Bankers Draft which will be handed to the vendors in front of the Notaio at the time of Rogito. We will do the Compromesso and Rogito on the same date. I guess the 'caparra' of commitment can be done in euros or a cheque as it is a small amount and I will see if it is enough to have it done with the 'seal' of the two acting geometras...
Not entirely kosher, but I expect with some many returning expats there will be more of these type of transactions taking place, funnily enough almost all the houses we have viewed have belonged to British expats returned to the UK. Sad in some sort of way

modicasa

Technically there is no reason why you cant do so. You can pay for a property in any way you like as long as there is common consent. What it must to however, is pass in front of a notaio, otherwise the sale is simply not legal and according to the law has never happened.

Advantages - none. Disadvantages - probably higher costs for the notaio to get his head round what you want to do and why.

Questions: There is a mortgage on the property - do you want to take on teh mortgage or will it be extinguished by the seller? Why are you doing the compromesso ont eh same day as the rogito - complete waste of time and money and has no logic.

As far as tax liability - if the hosue is sold is ITaly and is paid for in euros, there is no capital gain (unless the house was not a prima casa and is being sold within 5 years of purchase) - adn the money in euros is tax free. Do it in UK or Malta and I would think your income is taxable.

dondodi

Thank you Modicasa.

I believe the house has a UK mortgage on it, vendors say they have to pay capital gains on its sale so they probably moved residency back to the UK already if ever they resided here at all that is. They were not at the property for 5 years in fact I think maybe a couple all together.

The advantage of the rogito and compromesso at once was asked by the vendors to save on having to both fly back to Italy and also because they are in a rash to sell as the property has been empty for some therefore costing them.

In truth it is not how I would have wished to do it.

modicasa

Are you planning on taking on the mortgage?
Your problem is the extinction of the mortgage - as usually - in an Italian sale - the mortgage is extinguished on payment of the caparra, or ont eh day of the act whenyou all troop off to the bank and pay in a cheque to cover the outstnading mortgage payment. With a foreign mortgage this is much more difficult. You will be handing over a cheque which the owners must pay into the bank and pay off the mortgage. If they don't you have bought a mortgaged property....
As the buyer you can stipulate much more. There is no need at all to sign a compromesso and then a few hours later sign the act - unless they are hoping that the deposit paid at compromesso will extinguish the mortgage and they will have the say so from the UK bank by the time you sign the act in the afternoon.
If they have capital gain they should pay it at the moment of the act - or they can defer it to their DR which if they are moving back to the UK they are probably hoping will never catch up with them...
It all sounds a bit of a mess - you need to know exactly what their intentions are with teh mortgage, and the payments methods.

dondodi

Great help there Modicasa, thank you so very much.
I have no details on the UK mortgage and when discussed with the Italian commercialista we both reckoned it being a British Mortgage was more attached to the person then the house itself and they would have been liable to answer for... Clearly not correct. We will have to look into it more carefully as it may well prove that it may pass on to me. And to answer your question, nope, I have no intention to take over the mortgage repayments...

I have a feeling this mortgage is actually an equity taken against an existing mortgage they have back in the UK, I know others that have purchased a second property abroad in such a way in the early 2000-2006 years when there was plenty will by lenders to do so make cash available against the equity of mortgaged properties....