Rent to Buy in Sicily: A Guide for Foreign Buyers

Are you yearning to own a home in Italy yet face financial constraints? Are you searching for an innovative solution to make your dream a reality? We have a promising answer for you, especially in the current challenging economic climate with high mortgage rates and inflation. Introducing the rent-to-buy option in Italy, a beacon of hope for those seeking an alternative to conventional renting and buying, offering a pathway to property ownership despite immediate financial limitations.

Rent-to-buy, or “affitto con riscatto” in Italian, empowers tenants to rent a property for a set period and then allows them to purchase the property at the end of the rental term. This arrangement, gaining popularity in Italy, offers a flexible and practical solution for those who aspire to own a home without immediate financial capacity, putting them in control of their property ownership journey.

Rent-to-Buy Contract

Rent to buy is an innovative contract introduced by the Italian Decreto Sblocca Italia (D.L. 133/2014 converted into Law 164/2014). This agreement allows the owner to immediately hand over the property to the tenant/future buyer, who pays the rent. After a period specified in the contract, the tenant can decide whether to purchase the property, with a portion of the paid rent being deducted from the final purchase price.

This process involves two main phases (one of which is optional):

• Use of the Property: The initial phase where the tenant uses the property
• Transfer of Ownership: This is the potential second phase in which property ownership is transferred from the owner to the tenant. Notably, the law does not mandate that both parties complete the sale or stipulate that the transfer happens automatically at the end of the rental period. Instead, the tenant retains the right to purchase the property.

The Rent

The contract must delineate the two components of the rent:

• Payment for the use of the property.
• The portion that will count towards the purchase price should the tenant decide to buy.

Applicable Properties

A rent-to-buy contract can be applied to any property type: residential, commercial, industrial, office spaces, and even land.

The Importance of Registration

Registering a rent-to-buy contract has two significant effects under the law:

• It makes the tenant’s right to use the property enforceable against third parties.
• It serves as a preliminary notice similar to a pre-purchase contract, obligating the owner to transfer the property if the tenant exercises their right to buy.

This ensures complete protection for the tenant, allowing them to acquire the property in the same legal state as when the rent-to-buy contract was signed and preventing any adverse registrations or liens that might occur after the contract’s registration. Additionally, it protects the tenant if the owner fails to comply.

Substitution in the Tenant’s Position

The rent-to-buy contract can be structured so that the tenant can nominate another person to assume the rights and obligations under the contract.

Tenant Default

If the tenant fails to meet their obligations (including paying rent), the owner has several options:

• Initiate enforcement procedures to recover the owed amounts (Art. 2910 c.c.).
• Request specific performance if the tenant’s default involves an obligation to perform particular actions, such as property maintenance (Art. 2931 c.c.).
• Seek contract termination, provided the breach is significant (Art. 1453 and following c.c.).

If the Tenant Chooses Not to Purchase

Should the tenant decide not to buy the property, the contract will expire at the end of the agreed term. The owner will then be entitled to:

• Regain possession of the property.
• Retain the rent paid for using the property while refunding the portion intended for the purchase price as specified in the contract.

Returning the Property

In the event of tenant default or if the purchase right is not exercised, the owner has the right to repossess the property immediately.

Taxes During the Rental Period

Like a standard lease, the owner is responsible for property taxes (like IMU) during the rental period. However, according to local regulations, TASI is shared between the owner and the tenant. The tenant is responsible for TARI (waste tax), as they benefit from waste collection services.

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Are you considering purchasing a property in Sicily? We specialize in helping international buyers navigate the complexities of the Italian real estate market. Contact us today to learn more about rent-to-buy opportunities and how we can assist you in making your dream of owning a Sicilian property a reality.