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Changes to real estate purchase contracts

Real estate law

Changes to real estate purchase contracts

The Labour Decree (ddl Lavoro), which still needs to be approved by the Senate, removes the obligation for buyers and sellers to include the commission paid to real estate agents in the property purchase contract for the apartment.

This amends Decree-Law No. 223 of 2006, which was issued by the then Minister for Economic Development, Pierluigi Bersani. The decree, which is currently still in force, stipulates that the purchase contract for a property must include “each party's obligation to state whether they have used an intermediary”, i.e. an estate agent, “the identification data of the owner”, i.e. the tax code or VAT number, as well as “the amount of costs incurred for this activity and the analytical payment terms for these”. This procedure should ensure that every step of the buying and selling process is clear, transparent and, above all, seamless. In addition, this information was also necessary to enable the buyer to deduct tax at a rate of 19% of the expenses up to a maximum amount of 1,000 euros.

Since the brokerage fees agreed by the agent with the seller and the buyer, which are often unclear, in contrast to the situation in Germany, are freely negotiated, it makes no sense to tell the other party how much has been agreed, which can also lead to unpleasant situations.

The abolition of the obligation to disclose commission, which was originally intended to combat tax evasion, is therefore intended to protect privacy and confidentiality with regard to the economic aspects of brokerage services, but also to ensure free negotiation between citizens and professionals.