Rent to buy in Trieste: how it works for the owner who sells

Rent to buy (affitto con riscatto) lets you hand over your home now and sell it later: the tenant pays a rent split in two parts, one for living there and one on account of the price, and has the right to buy within a set term. It is governed by article 23 of decree-law 133/2014: the contract must be made public for its whole duration, at most 10 years, and in Trieste that is done in the Libro fondiario, the local land register.

How does it work in practice?

Today you sign a contract with three figures: the sale price, the monthly rent and the part of the rent that goes on account of the price. The tenant moves in straight away and, within the term, decides whether to buy. If they buy, at the deed (rogito) they pay the price minus the instalments already paid; if not, you return the share the contract provides for.

You remain the owner throughout. For the Revenue Agency (Agenzia delle Entrate), which set out the tax rules in circular 4/E of 19 February 2015, the home's income stays yours until the tenant exercises the right to buy.

Article 23 also refers to some rules on usufruct, "as far as compatible": ordinary maintenance costs fall on whoever lives there (article 1004 of the Civil Code), while major repairs such as roof, load-bearing walls and stairs stay with the owner (article 1005).

Which taxes do you pay as a private owner?

Circular 4/E splits the rent in two, according to its purpose.

• The use part is a lease: property income taxed under IRPEF, or the cedolare secca if the conditions of article 3 of legislative decree 23/2011 are met. Registration tax is 2% and can be paid year by year; according to the circular the cedolare replaces registration and stamp duty on the lease.
• The part on account of the price is not your income until you sell: it is an advance on the price. It pays registration tax at 3% on the total of the agreed instalments, at registration.
• The minimum: if the proportional tax on the two parts stays below €200, you pay €200.

At the deed, the tax paid on the instalments is deducted from the tax due on the sale: the same money is not taxed twice. If the sale falls through, the 3% on the instalments cannot be recovered, even if you return the money to the tenant.

What if the tenant stops paying or does not buy?

They stop paying. The contract ends when the tenant fails to pay a minimum number of instalments, even non-consecutive, which you fix in the contract: never fewer than one twentieth of the total number. On a 48-month contract, the threshold cannot be below 3 instalments. Once you have the home back, the rent you collected stays with you as compensation, unless the contract says otherwise; for the handover you can use the eviction procedure.

They do not buy. You return the share of instalments the contract states: the law requires you to write it down, not how much it is. What you keep is, for circular 4/E, other income (article 67, paragraph 1, letter l of the income tax code, TUIR): it pays for the right to buy you granted.

You do not sell. The tenant can ask the court for a judgment that transfers the home (article 2932 of the Civil Code). If instead the contract ends because of your breach, you return the part of the rent credited to the price, with statutory interest.

The Trieste step: land register, not Conservatoria

Article 23 requires the contract to be recorded like a preliminary sale agreement (Civil Code, article 2645-bis), with effects lasting for the whole contract and at most 10 years, instead of the 3 of a preliminary. This protects the tenant: anyone who buys or registers a mortgage against you after the entry cannot get ahead of them.

In Trieste, as in the rest of the land-register territories, there is no Conservatoria. Under article 12 of royal decree 499/1929 every reference to "trascrizioni" applies to entries in the Libro fondiario: the contract goes in as an annotation, ordered by the land-register judge (giudice tavolare). It must be a public deed or a private agreement with authenticated signatures, as article 2645-bis requires for preliminaries; the application can be filed by anyone with a legitimate interest (article 76 of the general land-register law).

If the home has a mortgage. For a dwelling, article 23 applies from the handover the ban in article 8 of legislative decree 122/2005: the notary cannot sign unless the loan has been split or there is a title to cancel or split the mortgage. Talk to your bank before you look for a tenant.

An example: a one-bedroom flat at €180,000 over 4 years

Stated assumptions: price €180,000, term 48 months, rent €1,000 a month, of which €550 for use and €450 on account of the price; private owner with the cedolare at 21%; if the tenant does not buy, the contract returns 70% of the instalments.

1. Instalments over 4 years: 450 × 48 = €21,600.
2. Registration tax on the instalments, at registration: 21,600 × 3% = €648.
3. Cedolare on the use part: 550 × 12 = €6,600 a year; × 21% = €1,386 a year.
4. If they buy: at the deed they pay 180,000 − 21,600 = €158,400, and the €648 is deducted from the sale's registration tax.
5. If they do not buy: you return 21,600 × 70% = €15,120; the €6,480 you keep is other income, taxed under IRPEF. The €648 of registration tax stays paid.

• 4+4 leaseyes

  Owner until the end

  Rent to buy: yes, until the deed

• 4+4 leaseall for use

  Rent

  Rent to buy: use plus instalments

• 4+4 leaseno

  Notary

  Rent to buy: yes, for the entry

• 4+4 lease4 years plus 4

  Length

  Rent to buy: that of the contract, up to 10 years of protection

• Sale price

  Rent to buy: fixed today

Is it worth it for a seller in Trieste?

It can help with a buyer who has no mortgage today but has an income and wants the home. The real costs lie elsewhere: the price stays fixed for years, the home stays tied up while the contract lasts, and you need a notary, which an ordinary lease does not. Before signing, have the notary work out the taxes on your case, and your accountant the income side.