A rumour caused consternation among overseas buyers in Italy recently – especially from the UK – which said that non-residents of Italy were not allowed to buy a property there. We asked our lawyer to explain why holiday homebuyers in Italy shouldn’t be panicking!
With the end of the Brexit transition period looming, UK nationals that are hoping to buy property in Italy in the future have become concerned about how Brexit could affect their dream of buying property in 2021. Will they even be allowed to buy a holiday home in Italy next year?
UK Government’s guidance on buying property
The guidance on the UK Government’s website’s for buying property in Italy simply states the following: “You can buy property or land in Italy if you are: 1. an EU citizen 2. a national from outside the EU who is fully resident or has a valid permit of stay in Italy 3. a national from a country that Italy has a reciprocal agreement with and who is resident outside of Italy. The UK will be seeking a reciprocal agreement to make sure that UK nationals who are not resident in Italy can continue to purchase property in Italy. We will update this guidance as soon as information is available.”
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The Italian Foreign Ministry position
The Italian authority responsible for verifying the presence of reciprocity is the Italian Foreign Ministry ( Ministero degli Affari Esteri ). In correspondence to the De Tullio Law Firm they stated that “there will be no restrictions for resident and non-resident UK citizens to invest in the Italian real estate market after Brexit.” This is based on the fact that both Italy and UK are members of the World Trade Organisation and that the UK Government doesn’t intend to set any restrictions for EU investors on the UK real estate market.
The Property Lawyer
To get an Italian legal viewpoint we posed the question to Giandominico from De Tullio Law Firm. Giandominico is on the UK government list of English-speaking Italian solicitors and specialises in real estate. You may also have seen him at “Your Overseas Home” events. He was recently part of an online conference, organised by the Italian Chamber of Commerce and attended by representatives of the British Embassy in Rome. Giandominico presented the following clear explanation of the legal position regarding UK nationals buying property in Italy post-Brexit:
The Legal Position
Property investments are not governed under EU legislation. Property ownership has always been based on sovereign laws which are set by individual countries. When you buy a property in, for example, England, the applicable law is that of England. When you buy property in Italy, your purchase is governed by Italian legislation.
Property matters are regulated under Italian law according to the principle of “reciprocity”. In simple terms, you can invest in the Italian real estate market provided your home country allows Italian nationals to invest there. Reciprocity is considered to exist for EU member states without any need to verify it. This will continue for UK nationals until the Brexit transition period ends on December 31st, 2020. Now that the UK has left the EU, verifying reciprocity has again become an issue.
According to the Italian Foreign Ministry, which is responsible for clarifying such matters, even if the UK and EU do not reach an agreement, reciprocity will continue after the Brexit transition period ends because the UK, as part of its commitments within the World Trade Organisation does not set any restrictions for foreign investors (and therefore for EU and Italian nationals) to invest in its internal real estate market.
As members of the World Trade Organisation, both the UK and Italy signed up to the GATS (General Agreement on Trade in Services) in 1995. Commitments made under the GATS by both the United Kingdom and Italy allow for the purchase of real estate properties. There are no limitations regarding reciprocal market access or national treatment of foreign purchasers. The reciprocal commitments made within GATS, mean that there are no obstacles, for the foreseeable future, regarding the purchase of real estate by UK or Italian nationals in the UK or Italy.