My House in Umbria – 6 Steps to Buying a House in Italy

We had a dream…to buy a house in Italy and retire there one day. Shortly after we returned to Canada after two years living in Umbria, I began scouring the Italian real estate listings for houses in the Lago Trasimeno area, a short distance from the Tuscany border. It was a way to stay connected to our time in Italy; to help me believe it was possible to go back, to live la dolce vita more permanently this time.

Every Friday night, we would spend many after-dinner hours, going through my picks that week and having fun looking at houses that were way out of price range. Those Friday nights kept the dream alive. Through stressful workdays and the drudgery of ever day city life and responsibilities, I escaped to images of sunflower fields, olive groves and medieval hill towns. We were going to buy a house in Umbria. One day…

Two years later, we returned to Italy on vacation and rented an apartment in the historical center, or centro storico of the gorgeous medieval hill town, Panicale. We knew the area well having spent two years living in the countryside nearby. Armed with tons of information from our Friday night sessions, we set out to see some of the properties that had interested us. We weren’t seriously thinking of buying the home we would retire in…yet but we were throwing around the idea of a buying a small investment rental property in the popular tourist area around Panicale. Then when we were ready, we thought we could sell it and buy the place we wanted to live in. Not a bad plan.

We had seen about half a dozen places and only one, a small one-bedroom apartment in the neighboring medieval hill town of Paciano, grabbed us. It was fully updated, had a good layout and a very cool, cave. Couldn’t do much with the cave but hey, it had a cave.  We were thinking of putting an offer on the place and with only three days left of our holiday, we knew we had to do it soon.

The next day we ventured back to picturesque Paciano for their annual Mille e Una Umbria lunch. This is THE event of the year not to miss in this amazing medieval village. The historical center is closed to traffic and all the main streets are lined top to bottom with tables. Stations are set up for antipasto, primo, secondo and contorno (side dishes) and of course dolce (dessert). On menu is food from the region and of course delicious wine from the Trasimeno area. There’s even musical entertainment from the village band made up of locals from nine to 90.

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I will share more details about this fantastic event in another post but for now, take my word for it. If you are in the area in September, be sure to check out this special day.

For us, the Mille e Una Umbria that year is one we will remember for more than a fantastic day out. During the lunch, an elderly man overheard us saying we were looking at local properties and said to Peter, “Why don’t you look at that house down the street?” Later that afternoon, we strolled by the house and saw a private Vendita or ‘For Sale’ sign attached to one of the doors. It mentioned a giardino or garden. We were intrigued. Not many homes in the historical center have gardens. We decided to call and make arrangements to see the house the next day.

A 600-Year Old Village House

Since it was a private sale, the German owner had a local Italian couple do the showings. Before we arrived, we’d asked ourselves what we were doing. This was a house, or technically a large townhouse since all the houses in the historical center are attached along the former castle walls. We were prepared to buy a one-bedroom apartment not a house. But what harm would it do to look? We were let into the main, antique double doors and let directly to the main floor on the left. Elena explained it was actually two houses that had been made into one. We walked through two empty and somewhat neglected rooms with signs of damp and peeling paint to French doors leading to the garden. We stepped out onto a stone terrace under a wisteria-covered pergola. It was difficult to see the end of garden through all the overgrown weeds.

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The giant fig tree was so out of control that several of its branched grew at least 10 feet along the ground. But onward we forged to the end of a beautiful curved stonewall.

We now stood about 25 feet above the street below. We stood and stared. Mouths dropped open at the stunning view of olive groves and forests and best of all, the gray-green waters of Lago Trasimeno. So not just any medieval village house but one with an amazing lake view.

Elena asked us in Italian if we were interested in seeing the rest of the house. Behind her, Peter turned to me and mouthed, “Wow!” and I mouthed back, “I know!!”. We knew. Right then and there. Before seeing the other two floors of the house that we would buy it. Yes, we looked at the rest of the house. We took in all the charming original features; the huge chestnut beams, the fireplace that was in the kitchen on the first floor (one floor up from the piano terra or main floor).  We also took in all the work we needed to do.

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Yet still, four hours after first walking through its doors, we signed the contract to buy a 600-year old house in Paciano. Crazy? Probably. But for us, it just felt right.

6 Steps To Buying A House in Italy

Here are the steps you need to go through to buy a house in Italy. At least they were the last time I checked:

1. Codice Fiscale. This is an identification code based on your surname, first name, birth place and date of birth. You need a codice fiscal to make any major purchase in Italy. And you definitely need it to buy a house.
2. Italian bank account. You need an Italian bank account to handle the financial transaction of the house purchase. And you’ll need it to pay the utility bills once you buy the house.
3. Proposta di Acquisto or formal offer. This is a binding agreement in writing that essentially ensures the seller holds the property for the buyer until he/she can complete the purchase by an agreed upon date.
4. Compromesso. This is a preliminary contract that outlines the agreed sale price, the amount you will put down (normally between 10% and 30% of sale price) and the completion date or Rogito.  Essentially it is a legally binding document that confirms you commit to buying the property.
5. Rogito or the ‘Deed of Purchase’. This document is the last contract before the property is finally yours. It is usually signed one to three months after the Compromesso and must be signed in front of a notary. It is also at this time that any balance owing on the property must be paid.
6. Pay the transaction costs and taxes. There are essentially three main taxes to pay when purchasing. In order to determine how much to pay, the cadastral declared value is used. This declared value is written on the Rogito (deed of sale) and is usually much less than the market value of the property since most of the latest appraisals on old homes go back many years. The three taxes are: Stamp Duty which is 2% for a prima casa (or primary home) and 9% for seconda casa (second house); the Land Registry Tax which is 50 euro fixed rate; and the Cadastal Tax which is also 50 euro fixed rate. Lastly, there is the notary fee, which can vary.

Three months after we signed the Compromesso, we were on a plane back to Paciano to close the deal and sign the Rogito. We rented a tiny apartment in a tower near Porta Fiorentina, the gate just four doors down from our new house. We could see the top of our house from the apartment window. So close yet so far.  It was early December. The smell of wood smoke hung in the crisp air. Our excitement could not be contained. The next day, we drove to the notary’s office in a nearby town. We sat across the table from the seller Barbara, a lovely German woman who loved the house but wanted to sell after the recent passing of her husband. She smiled warmly at us. Our bank manager slid a bank draft for the balance owing across the table to Barbara. She then removed a set of keys hanging around her neck and passed them to Peter. We all had tears in our eyes. The final documents were signed. Barbara came over to me and gave me a big hug. Despite the agreed upon date for us to take over the house being two days away she said it was only right that she leave the next morning. The house, she said, was now ours. 

The following morning, we rose early to brilliant sunshine muted by a soft fog. We walked down to the local bar to have a coffee and calm our nerves before heading to the house at the agreed time of 9am. The streets were empty, save for one of the village’s elders putting up a notice on one of the town’s message boards. As we passed him, he said, “Buongiorno. What smiles you have today. You look happy.” We stopped and told him the reason for our ear-to-ear-grins, that we had bought a house in the historical center and one day we were going to live here.  We spoke of our love for Paciano and our gratitude for finally being a part of it. He beamed back at us and took both our hands, “Welcome. You are now Pacianese.” I swallowed hard, my reply caught by the lump in my throat. Instead, I reached out and hugged him.

At the bar, we rushed through our coffee, constantly checking the time. Like polite Canadians, we waited until five minutes after 9am before heading back up the street to the walls of the historical center.

Peter unlocked the old front door, picked me up in his arms, carried me across the threshold and said, “Welcome home.”

A presto