The process of purchasing real estate
Purchasing real estate in Italy by a Swiss citizen is subject to the condition of reciprocity. This means that a Swiss citizen can buy property in Italy only if an Italian citizen can do the same in Switzerland, in accordance with Swiss regulations. This condition is part of the bilateral agreement signed in 1999 between Italy and Switzerland.
As outlined below, it is essential to meet these conditions to proceed with the purchase. However, there are alternative solutions that allow overcoming these limitations, although it is crucial to evaluate these options with the assistance of expert advisors.
The Koller Law in Switzerland
In Switzerland, the ability for foreign citizens to purchase real estate is regulated by the "Koller Law" of 1983. According to this law, a foreign citizen must obtain authorization from the cantonal authorities, and the property must meet certain criteria, including a living area of less than 200 square meters and attached land of no more than 1,000 square meters. This limits the number of properties available to foreigners, driving up property prices.
The Principle of Reciprocity
Italian law does not explicitly restrict foreigners from purchasing real estate. However, Article 16 of the preliminary provisions of the Italian Civil Code imposes the condition of reciprocity, which allows foreigners to enjoy civil rights, including those related to real estate purchases, only if there is equivalent treatment for Italians in their country of origin.
The Role of the Notary in Verifying the Condition of Reciprocity
The Italian notary is responsible for verifying the condition of reciprocity when a Swiss citizen intends to purchase property in Italy. If the condition is not met, the notary cannot proceed with the deed of sale. The notary may seek assistance from the Italian Ministry of Foreign Affairs to ensure that all conditions are met, thereby guaranteeing the legality of the transaction.
Application of the Principle of Reciprocity Between Italy and Switzerland
Swiss citizens are not equated with EU citizens in Italy and are considered "foreigners." This means their right to purchase property in Italy is subject to reciprocity verification. However, Swiss citizens can purchase:
- Secondary homes or holiday homes with a net living area not exceeding 200 square meters and land not exceeding 1,000 square meters.
- Properties for exclusive commercial use.
- Properties from legitimate heirs in case of succession and from direct relatives of the seller.
Purchasing Property in Italy by Swiss Citizens Through Italian Companies
Swiss citizens can also purchase real estate in Italy through Italian companies. The condition of reciprocity is met if the purchase is made through an Italian company. For partnerships, at least one partner must be resident in Italy and have the authority to represent the company.
Purchasing Properties Larger Than Allowed
If a Swiss citizen wishes to purchase a property larger than allowed by the Koller Law, they can consider two options: transferring their tax residence to Italy or establishing a simple real estate company in Italy. Both options have significant tax implications that must be carefully evaluated with the help of legal and tax advisors.
Conclusion
The purchase of real estate in Italy by Swiss citizens is subject to specific limitations and the condition of reciprocity. However, there are solutions to overcome these limitations, such as transferring tax residence to Italy or establishing a real estate company. These options must be carefully evaluated concerning tax implications, both for Italian regulations and the Convention against Double Taxation between Italy and Switzerland.
