Buying a house at auction in Italy: is it possible for a foreigner?

Real estate auctions in Italy are procedures organized by the Court to sell, at the best possible price, a property that has been foreclosed by the creditors of the owner, or resulting from the bankruptcy of a company, or from an inheritance when the co-owners cannot reach an agreement on the management or sale. The procedure involves the appointment of a Custodian, who manages the property during the process and, if necessary, vacates it from occupants, and a consultant who prepares an appraisal describing the history of the property, its factual and legal status, and its commercial value as the auction’s starting price. Then, a professional registered on the list of delegated sales agents (a notary, a lawyer, or an accountant) is appointed to publish the notice of sale (according to the rules established by the judge) on specialized websites, organize the auction, and handle the transfer of ownership in the Land Registry.

Auctions are conducted online: the notice of sale specifies the auction date, detailed participation procedures, and the starting price. The property can only be viewed on the days indicated by the Custodian, usually no more than once or twice between the publication of the notice and the auction date. Despite the limited opportunity to view the property, the appraisal prepared by the consultant provides a very precise and realistic picture, since the consultant is an impartial party who has sworn to carry out the appraisal truthfully.

Participation in the auction can be done personally or through a notarized power of attorney granted to a lawyer, in any case through an online procedure without the need to go to Court. The bidder is free to choose the price, but the offer cannot be less than 25% below the starting price. The offer must be accompanied by a bank transfer deposit equal to 10% of the bid. 

On the auction day, the delegate opens all the electronic bids received: if there are multiple valid offers, a bidding competition begins, and the highest bidder wins. If there is only one offer, it is automatically accepted if the price offered is equal to or higher than the starting price. If the offer is below the starting price but still higher than the starting price minus 25%, the Judge decides whether to award the property or to hold a new auction.

The auction winner must pay the remaining balance within a deadline set by the Judge (normally 120 days), the property transfer taxes (about 9% of the property’s value), and part of the delegate’s fee. If payment is not made within the deadline, the winner loses the right to the property and forfeits the deposit already paid. 

If no offers are received, the delegate then publishes a new notice of sale with a lower price. For this reason, it is sometimes possible to purchase a property at auction for a price significantly lower than its real market value.

Any EU citizen is allowed to participate in judicial auctions under the same conditions as Italians, even if not resident in Italy. For non-EU citizens, the legal position must be assessed on a case-by-case basis.

Purchasing a house in Italy, by the sea, in the mountains, by a lake, or in historic villages, can be a good deal. Based on my experience, excellent purchase opportunities can be found outside the major cities, also in beautiful holiday locations, while properties at auction in large cities such as Milan, Rome, Florence, etc., tend to be awarded at prices closer to real market value due to the participation of professional real estate bidders.