The real estate market in both Italy and the United States operates within very different legal and procedural frameworks, significantly impacting real estate investment strategies.
A major difference is the role of the notary in Italy, compared to the function of the title company in the USA.
In Italy, the notary is a key figure in the property transfer process. Acting as a public official, the notary ensures the safety and legality of the entire operation. They check the regularity of documents and transactions, ensure no pre-existing liens or mortgages, and draft and officially record the deed of sale. This approach provides a high level of legal security but also involves higher costs and longer processing times.
In the United States, the real estate purchase process is facilitated by the title company, which performs multiple functions. These include ensuring that the property title is free from pre-existing legal or financial issues, managing negotiations, and closing the transaction.
During the closing, the title company coordinates the transfer of money and signing of documents, also offering a title insurance policy to protect the buyer from future disputes.
Contractually, the systems further diverge. In the USA, the process is often more direct and less formal, with standard contracts that can be tailored to the specific needs of the parties involved. In Italy, however, each transaction requires the direct involvement of a notary, ensuring that every legal aspect is meticulously adhered to according to Italian regulations, making the process more formal and rigidly structured.
These differences also extend to taxation and transaction costs. Buyers in Italy face notarial fees, registration taxes, and other duties that can significantly impact the overall cost of the investment. In the USA, although there are costs for title insurance and other closing-related fees, often tax incentives through property tax deductions are found.
Moreover, the types of properties available differ between the two countries. In the USA, the market offers a wider variety of property options, such as single-family homes, condominiums, cooperatives, and real estate trusts, each with specific legal and tax implications. In Italy, the market is less segmented, with a predominance of traditional properties and more uniform regulations.
These differences necessitate careful evaluation by investors wishing to operate across these two markets, emphasizing the importance of a deep understanding of local dynamics and regulations to maximize the success of real estate investments.
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For a deeper understanding of the differences and nuances between the Italian and American real estate systems, we invite you to watch our video interview with Beatrice Bianchi Fasani, a partner at the Miami office of EXP Legal.
During the interview, Beatrice Bianchi Fasani provides detailed insights into the challenges and opportunities in the U.S. real estate market, with a special focus on Miami, one of the most dynamic cities in terms of real estate investments. Watch the full interview at the following link.
