Are you considering buying a property in Italy? If so, you may have heard the term “deposito prezzo” and wondered what it means. In this blog post, we’ll explore what this is and how it can protect your investment in an Italian property.

What is Deposito Prezzo?

The term “deposito prezzo” refers to a specific bonded holding account for the balance of payment related to the purchase of an Italian property. In 2017, the Italian government introduced this provision to protect buyers from the risk of legal claims or encumbrances that may arise between the signing and registration of the deed of sale at the land registry (catasto).

Why Are Post-Deed Formalities Important?

After signing the final deed of sale, two different legal steps must be completed: registration (registrazione) and transcription (trascrizione).

The first, registration, fulfils only the fiscal obligations connected to the transaction. The second, transcription in the public real-estate registers (Registri Immobiliari), is what updates the public records and creates the legal publicity of the transfer. Until transcription takes place, the deed is valid between the parties but not fully protected against third-party claims.

This gap between signing and transcription is where risks may arise, such as undisclosed debts, pending legal disputes, or missing heirs who should have been involved in the sale.

The deposito prezzo provision helps protect buyers during this period by allowing the notary to hold the balance of the purchase price in a secure dedicated account until transcription is completed and ownership is formally published in the public registers.

Buyers should always review their copy of the deed after both registration and transcription are completed to ensure all details are correct, such as names, tax codes and property identifiers. Errors left uncorrected can cause future administrative or legal complications.

How Does Deposito Prezzo Work?

Buyers face the risk of unexpected debts or legal claims arising between the signing of the deed of sale and its registration. To mitigate the risk of undisclosed mortgages or tax liens, buyers can request that the notary keep the balance of the purchase price in a separate bonded holding account until registration is complete. This is pursuant to the deposito prezzo provision. The provision allows the notary to hold the buyer’s funds in a secure account, releasing them only after finalization of registration formalities.

Without deposito prezzo, the vendor who owes a significant amount of back taxes can sell the property to a buyer, and the buyer could then become liable for these debts, even though they had no knowledge of them at the time of purchase. With deposito prezzo, the notary keeps the buyer’s funds in a secure account until the registration process is complete, and the vendor resolves any potential legal issues.

Effects of Deposito Prezzo

At least one of the parties to the transaction must request deposito prezzo. The notary must then open a holding account specifically for this purpose, which is entirely separate from their personal assets.

For example, a buyer purchasing a property in Italy can use deposito prezzo to ensure that they have protection for their funds in case the vendor faces any legal issues or has undisclosed debts. By doing so, the buyer can have peace of mind knowing that their investment is safe and secure until the registration process is complete.

Note that the notary also protects money held in the account from their own creditors, providing an additional layer of security for both parties involved in the transaction.

Optional Choice of Deposito Prezzo

The protection of deposito prezzo is optional, and when signing the deed of sale, the buyer can opt to use or waive it. However, it is advisable to communicate ahead of signing the decision to make use of deposito prezzo so that the vendor and the notary can prepare for this.

Conclusion

Deposito prezzo provides an additional layer of protection for buyers of Italian properties. It ensures that the notary keeps the balance of the purchase price in a separate bonded holding account until completion of the registration formalities. This provides assurance to both the buyer and the seller that there are no legal claims or encumbrances on the property. While deposito prezzo is optional, it is a wise choice for buyers to consider when making a property purchase in Italy.

Have you ever experienced issues between signing the deed of sale and completion of registration formalities when purchasing a property in Italy? If so, what sort of issues did you encounter and how did you resolve them? Sharing this information with other readers can be helpful in promoting a better understanding of the importance of measures like deposito prezzo for protecting buyers’ interests in Italian property transactions.