Are Canadian Citizens allowed to purchase Italian properties?
A new Canadian law – in force since January 1, 2023 – has imposed a restriction for foreigners who are willing to buy any residential property in Canada.
Indeed, the above law prevents non-Canadians and foreign corporations from buying residential property in Canada for two years.
The act defines non-Canadians as those who are not Canadian citizens, Permanent residents of Canada; those registered under the Indian Act.
As per the recent Canadian ban, a person or corporation defined as non-Canadian is not allowed to purchase a property, either directly or through trusts, partnerships or similar entitles.
However, there are some exceptions for those who are not permanent residents, e.g.:
- those who are married to a Canadian citizen;
- permanent students for the previous five years in Canada;
- diplomats and international organisations members; etc.,
are allowed to purchase a property up to CAD $500,000.
The immediate consequence is that according to the international law principle of reciprocity, Italy is going to apply mirroring restrictions to Canadians wishing to purchase properties in Italy.
Of course, the abovementioned principle of reciprocity implies that the above exemptions would apply also for Canadians who are willing to purchase a property in Italy.
Whilst assisting a number of Canadian clients, we have registered some different options which – depending on the specific circumstances of each matter/client – could allow Canadian citizens to complete an Italian property purchase. In fact, there are specific case which could increase your chances to avoid the ban, as follows:
- the purchase proposal or preliminary contract was signed prior to January 1, 2023, provided they prove that the agreement was in place before that date (i.e.: registration of the preliminary or purchase proposal, payment of a deposit, etc.);
the property is not reported as a residential unit (Italian cadastral zoning different from A1, A2, A3, A4, A5, A6, A7, A8, A9) and it lacks of the certificate of “habitability”;
- the property is located in a Municipality with a population lower than 10,000 citizens; however, if it is close to a metropolitan city, the ban might apply anyway;
- the property is purchased with a spouse (or civil union partner) who is an Italian permanent resident or an EU citizen;
- the property has been received by a succession, separation, divorce, or gift;
- the purchaser has an Italian long term immigration status or they have dual citizenship also holding an EU passport;
Only the local Ministry of Foreign Affairs is competent to provide data on the verification of reciprocity. unfortunately, up to date its website does not provide any information on the new Canadian ban.
This new regulation requires a detailed due diligence on your specific case to understand if it is possible to overcome the ban for the transaction you are aiming to complete.
The Italian Lawyer offers legal assistance to potential buyers for:
- reviewing the documentation and details of each transaction with the cooperation of local notaries for the interpretation of the Canadian law and regulations and the application of the reciprocity condition;
- advising on the best solution for each specific case;
- drafting a tailored proposal and/or contract after assessing the feasibility of the transaction;
- assisting the prospect buyers with the conveyancing process up to completion the property purchase on your behalf also advising on the relative expenses (notarial fees, registration, transfer, pilings, etc.).
It is highly advisable to appoint an International Property Lawyer to carry out the above checks before signing any purchase proposal which would bind the Promisor Buyers to complete the transaction. This would avoid them to be exposed to contractual liabilities in case it is not possible to proceed to completion due to the Canadian ban.
If you are interested in one of the above opportunities and wish to receive further information, please send an email at firstname.lastname@example.org asking for a free first assessment call with one of our property lawyers.