BREXIT AND REAL ESTATE INVESTMENT IN ITALY

Alessandro Clemente

As Brexit deadline is getting closer, many British overseas property investors are wondering whether they are still entitled to buy home in Italy.

From a juridical point of view, basically both national and international Law confirm that property ownership right is regulated by the Law of the the country where the real estate is located (“lex rei sitae”).

The main legal sources are:

- Civil Code Preleggi,  as per Art. 22 Law 218/94 Art 51  (Italian Law)

- Law 218/1995, as per Art. 51 (International Law)

On the other hand, and in case of cross-border property transaction, it is also of crucial importance making sure that the Condition of Reciprocity is verified between the 2 countries (in our current case, Italy and the UK), always taking into consideration that a property purchase completed not in respect of the condition of the reciprocity has to be strictly considered as null and void.

What is the condition of reciprocity?

In simple terms – and for what concerns the relation between Italy and the UK -  this is a legal principle confirming that British citizens can purchase real estate in Italy as long as Italian citizens are allowed to buy a real estate in the UK.

Reciprocity is anyway set to be verified for EU Members.

Considering that the UK has left the EU (Brexit), the reciprocity condition between these two countries might represent an issue.

Until the 31st December 2020 (Brexit transition period deadline) the condition of reciprocity is certainly verified and so British citizens can buy home in Italy like they did before.

And after the transition period ends?

We confirm that even after the 31st December 2020 (and also in the case of a “no deal scenario”) the condition of reciprocity between Italy and the UK will be considered as verified given the fact that so far, the UK – as part of the WTO (World Trade Organization) - has not approved any restrictions for foreign buyers to invest in its internal real estate market.

Furthermore, Italy and the UK signed up to the GATS (General Agreement on Trade in Services) which – among the others – come with the reciprocal commitment confirming that there are no obstacles for the purchase of real estate between these two countries.