Subrogation & Finance

What you should know

Subrogation & Finance

One Italian law that property buyers should be aware of is the law of subrogation, whereby property debts, including mortgages, local taxes, utility bills and community charges, remain with a property and are inherited by the buyer.

This is an open invitation to dishonest sellers to ‘cut and run’. It is, of course, possible to check whether there are any outstanding debts on a property and this must be done by your legal advisor a few days before completion.


It’s recommended to have your finance in place before you start looking for a property and, if you need a mortgage, to obtain a mortgage guarantee certificate from a bank that guarantees you a mortgage at a certain rate, which is usually subject to a valuation.

Under Italian law, you can withdraw from a contract and have your deposit returned if you’re unable to obtain a mortgage. You will need to pay a deposit when signing a contract and must pay fees and taxes of between 10 and 20 per cent of the purchase price on completion, although resident first-home buyers pay considerably less.

Declared Value

It’s customary in Italy for buyers (and sellers) to under-declare the amount paid for a property, although this practice is illegal. If you under-declare the price, the authorities can re-value the property and demand that you pay the shortfall in tax plus interest and fines.

This article is an extract from Buying a Home in Italy from Survival Books.

Further reading

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