The Preliminary Contract

In Italy, ownership (proprietà) of a property passes directly to the buyer (acquirente) upon signing the notarised deed of sale (rogito notarile); no separate registration in the land register is required for the transfer of ownership. For this reason, it is customary in Italy to conclude a preliminary contract (compromesso / contratto preliminare) before signing the final deed.

The preliminary contract is legally binding for both parties, just like the final purchase contract, and it cannot be modified or supplemented later without the consent of both the buyer and the seller. It may be drafted by the seller, the real estate agent, a notary or a lawyer, or it may be a standardised form available in well-stocked stationery shops. The contract must always be in written form but does not necessarily need to be computer-generated; it can also be handwritten. Except in the case of properties that are still under construction or not yet completed, the presence of a notary to certify the signatures is not required. However, a notarised preliminary contract may be entered into the land register.

Registration in the land register is especially recommended if a considerable amount of time is expected to pass between the preliminary and the final contract, or if there are doubts about the seller’s financial stability. Registration ensures that the property cannot be sold or otherwise disposed of by the seller before the final deed is signed, with the exception of mortgages used for construction financing.

The preliminary contract must include all essential purchase conditions (condizioni d’acquisto), such as full details of the property including any furniture, identification of both buyer and seller, the purchase price (prezzo d’acquisto), payment terms (modalità di pagamento), and any special clauses (cause di scioglimento del contratto). 

It must also set a time frame within which the final deed of sale is to be signed, usually one to two months, though other arrangements can be made. During this period, the buyer should, ideally with the help of a professional surveyor, examine the land register and cadastral records to verify that the seller is the lawful owner, that the property is free of mortgages, and that its physical condition matches the official records.

The Deposit

Italian law does not require the payment of a deposit (caparra), leaving it up to the parties to decide whether to include such a payment as part of the preliminary contract. In practice, however, regardless of whether the property is purchased through an agent, a developer or directly from the owner, a certain percentage of the purchase price is usually agreed upon as a deposit. This step reinforces the binding nature of the preliminary contract and demonstrates the parties’ serious intent to complete the transaction.

There are two types of deposit: the confirmatory deposit (caparra confirmatoria) and the penalty deposit (caparra penitenziale).

The confirmatory deposit typically amounts to between 10% and 30% of the purchase price and carries the same binding effect as the final contract. This means that if the buyer withdraws after signing the preliminary agreement, they forfeit the full deposit. If, however, the seller withdraws, they must return the deposit in double.

The penalty deposit, on the other hand, is usually smaller (about 2% to 4% of the purchase price) and is used when there is still some uncertainty about whether the transaction will go ahead. In this case, a withdrawal clause (diritto di recesso) must be included in the contract. If either party withdraws, the buyer forfeits the deposit, or the seller must return it in double.

It is important to note that if the contract merely refers to a “caparra” without further specification, it is automatically interpreted as a confirmatory deposit. The deposit should also not be confused with a simple advance payment. Advance payments are refundable if the contract is not concluded, while deposits are usually forfeited if the transaction fails due to the buyer’s fault. Because the preliminary contract is legally binding, either party can demand the fulfilment of the agreement—namely, the completion of the sale—regardless of whether a deposit was paid.

Conditional Clauses

Conditional clauses (clausola condizionale / clausola risolutiva) can be included in the preliminary contract. These clauses must all be fulfilled by the time the final notarised contract is signed in order for the sale to be legally valid.

Such conditions generally concern matters outside the parties’ direct control—for example, a satisfactory survey report (perizia) without major defects, the approval of a mortgage (see also The Mortgage), or the granting of a building permit (concessione edilizia) for extensions, alterations, or the construction of a swimming pool. Any type of condition may be included in the preliminary contract as long as both parties agree to it.

If one or more of these conditions are not met by the time of signing the final contract, the preliminary agreement can be declared invalid (contratto invalido) without penalties for either party.

Contract Registration

The preliminary contract must be registered at the local tax office within 20 days of signing. In addition to fixed costs of €200 and the required stamp duties, a registration tax is payable. This tax amounts to 0.5% of the deposit in the case of a confirmatory deposit, or 3% in the case of a penalty deposit or a simple advance payment.

Further Important Information

Before signing the preliminary contract, the seller must provide the buyer or the buyer’s legal representative with copies of all essential property documents and disclose any facts that could influence the buyer’s decision to purchase (see also Property Purchase Checklist).

For foreign buyers, it is essential to obtain an Italian tax number (codice fiscale) before signing the final contract, as it is a legal requirement. Buyers should also ensure that they have fully understood the contents of the preliminary contract. It is strongly recommended to hire a sworn translator if needed, rather than risk misunderstanding important details. By signing, the buyer enters a legally binding agreement and is obligated to complete the purchase.

Buyers should not rely blindly on translations provided by real estate agents, as there is no guarantee that these are entirely accurate.

Once the preliminary contract has been signed, a date for the final notarial deed is arranged. Read more under Notarial Contract.