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 subject to foreclosure by the owner's creditors, or resulting from a company bankruptcy, or from an inheritance when the co-owners cannot reach an agreement on management or sale. The procedure involves the appointment of a Custodian, who manages the property during the process and, if necessary, clears it of any occupants, and a consultant who prepares an appraisal describing the property's history, its factual and legal situation, and its starting market value. A registered professional (notary, lawyer, or accountant) is then appointed to publish the notice of sale (according to the rules established by the court) on specialized websites, organize the auction, and handle the transfer of ownership to the Land Registry.

Auctions are held online: the auction notice indicates the auction date, detailed participation procedures, and the starting price. The property can only be viewed on the dates specified by the Custodian, usually once or twice between the publication of the notice and the auction date. Despite the limited viewing opportunities, the appraisal prepared by the consultant offers a very accurate and realistic picture, as the consultant is an impartial person who has sworn to carry out the appraisal truthfully.

Participation in the auction can be done in person or through a notarized power of attorney granted to a lawyer, either online or through a court-approved procedure. Bidders are free to choose their own price, but their bid cannot be less than 25% of the starting price. The bid must be accompanied by a deposit via bank transfer equal to 10% of the bid amount.

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

The winning bidder must pay the balance within a deadline set by the judge (usually 120 days), the transfer taxes (approximately 9% of the property's value), and a portion of the agent's fee. If payment is not made by the deadline, the winning bidder loses title to the property and the deposit paid.

If no bids are received, the agent 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 true market value.

Any European Union citizen can participate in judicial auctions under the same conditions as Italians, even if they are not resident in Italy. For non-EU citizens, the legal status must be assessed on a case-by-case basis.

Buying a home in Italy, whether by the sea, in the mountains, on a lake, or in a historic village, can be a great deal. In my experience, excellent purchasing opportunities can be found outside the major cities, even in beautiful tourist destinations, while properties sold at auction in major cities like Milan, Rome, Florence, etc., tend to sell for prices closer to their true market value due to the participation of professional real estate agents.