Buying a home is a dream for many, but it is not always easy to turn it into a reality. Bank mortgages require complex documentation, the fateful 20% down payment that not everyone has saved, and there are often biblical waiting times for the processing of the application. In the meantime, the home of your dreams could slip through your fingers.

However, there is a solution that is still little known but extremely practical: the sale with reservation of title, also known as a “retention of title agreement.” It is a legal instrument that allows you to move into a home immediately by paying the price in installments over time, without the need for an immediate mortgage.

In this guide, we explain everything you need to know to buy a home using this formula, protecting your rights and making an informed choice.

What is a retention of title agreement according to Art. 1523 of the Civil Code?

The retention of title agreement is governed by Article 1523 of the Italian Civil Code. In short: the seller formally retains ownership of the property until the final installment is paid, but the buyer can take possession of the home immediately and use it as if it were already theirs.

It is as if there were two distinct moments:

1. The moment of delivery: when you sign the contract and are given the keys. From this moment, the house is yours for all practical purposes: you live in it, inhabit it, and enjoy it.
2. The moment of transfer of ownership: when you pay the final installment. Only at that moment, automatically, do you become the owner for all legal purposes.

The fundamental peculiarity lies right here: the buyer assumes all risks and responsibilities from the moment of delivery (if a cornice falls, if a pipe bursts, if there is a fire, it is all at your expense), but technically they are not yet the owner until the final balance is paid.

This mechanism protects the seller (who retains ownership as a guarantee of payment) and allows the buyer to move into the home immediately without having to wait years to accumulate a mortgage down payment.

Reservation of Title vs. Rent to Buy: which to choose?

Many people confuse a sale with reservation of title with Rent to Buy, but they are two completely different legal institutions. Let’s clarify.

Sale with reservation of title

In a sale with reservation of title, the contract is already an effective sale from day one. You are buying a home, period. The transfer of ownership will occur automatically upon payment of the final installment, without the need to sign a new contract. It is like an installment sale protected by law.

Rent to Buy

In Rent to Buy (governed by Art. 23 of Decree-Law 133/2014), however, initially you are renting the home with a future option to purchase. You pay a monthly fee (part of which is set aside as a down payment), but at the end of the period you have the right, not the obligation, to purchase and, to do so, you must sign a second sale and purchase agreement to become the owner.

Feature	Reservation of Title	Rent to Buy
Legal nature	Installment sale with deferred transfer effect	Lease with purchase option
Transfer of ownership	Automatic upon final installment	Requires a new contract if the option is exercised
Obligation	You are obligated to complete the payment	You have the right, not the obligation, to purchase
Possession of the property	Immediate, with all risks	Immediate, but as a tenant
Protection in case of default	Strict (risk of losing installments)	More flexible

The choice between the two depends on your specific situation:

• Reservation of title if you are certain you want to buy that home and have a stable income to support the installments
• Rent to Buy if you want to “try out” the home before committing definitively or if your economic situation is still uncertain.

How to buy a home with reservation of title: steps at the notary

Buying a home with reservation of title requires precise steps and specific documentation. Let’s look at the process step by step.

The first step is always the negotiation of the contract with the seller. In this phase, you will need to agree on:

• The total sale price
• The amount of the first installment (usually higher, as a “down payment”)
• The number and amount of subsequent installments
• The overall duration of the payment plan
• Interest (if applicable)
• Conditions for early debt repayment.

Once an agreement is reached, you proceed to the notary for the execution of the public deed. This step is fundamental and mandatory by law. The notary drafts the sale contract with a retention of title agreement, verifying:

• The urban planning and cadastral compliance of the property
• The absence of mortgages, foreclosures, or encumbrances
• The regularity of the seller’s title deeds
• The correct indication of the installment repayment plan

The notary then proceeds to the transcription of the deed in the real estate registers. This is a step of vital importance for the buyer: transcription makes your right enforceable against third parties. In simple terms, if the seller were to have economic problems, go bankrupt, or if someone attempted to seize the property, you are protected because your right was transcribed first.

How much does a deed with reservation of title cost and what is the maximum duration?

Notary fees for a deed with reservation of title are substantially aligned with those of a normal sale, with some additional items related to the complexity of the installment contract.

On average, you should budget for:

• Notary fee: between 1,500 and 3,000 euros (depending on the value of the property and the complexity of the deed)
• Registration, mortgage, and cadastral taxes: if you are buying a primary residence with tax breaks, approximately 2% of the cadastral value; otherwise 9%
• Transcription costs: approximately 300-400 euros

Regarding the maximum duration, Italian law does not provide an express time limit. In theory, you could agree on 20 or 30 years. In practice, however, the most common duration varies from 5 to 10 years, because beyond this period:

• It becomes very risky for both parties
• Banks are unlikely to agree to subsequently grant a mortgage to settle the residual debt
• The value of the property could change significantly

Sale with reservation of title for a primary residence: tax benefits

If the property you are purchasing with reservation of title is your primary residence, you can benefit from the tax breaks provided by law exactly as in a traditional sale.

The “primary residence” benefits include:

• Registration tax reduced to 2% instead of 9% (if purchasing from a private individual)
• VAT reduced to 4% instead of 10% (if purchasing from a construction company)
• Mortgage and cadastral taxes at a fixed rate (50 euros each)

To obtain the benefits, you must meet the standard requirements:

• The property must be located in the municipality where you have (or intend to establish within 18 months) your residence
• You must not own other homes in the same municipality
• You must not have already used primary residence benefits on another property (unless sold within one year)

The notary will verify all requirements at the time of signing and will include the necessary declarations in the deed.

Who pays taxes and expenses? IMU, TARI, and maintenance

One of the most frequent questions concerns the management of taxes and ordinary expenses during the installment payment period. The situation is as follows:

IMU (Single Municipal Tax)

From a fiscal point of view, until the final installment is paid, the formal owner of the property remains the seller. Consequently, technically the IMU is the responsibility of the seller.

However, in practice, almost all sale contracts with reservation of title include a clause that assigns the IMU to the buyer, given that they are the one actually enjoying the property. It is a matter of fairness rather than a legal obligation.

Note: this clause must be clearly specified in the contract. If you want to avoid disputes, have the notary insert it expressly.

TARI (Waste Tax)

The TARI, unlike the IMU, is due by whoever holds or occupies the premises, regardless of formal ownership. Therefore, the TARI is always the responsibility of the buyer from the moment they take possession of the property.

Ordinary and extraordinary condominium expenses

The ordinary condominium expenses (cleaning, stair lighting, elevator maintenance, administrator) are always borne by the person living in the property, therefore the buyer.

For extraordinary expenses (roof replacement, central boiler replacement, renovation of common parts), however, the situation can be subject to specific agreements in the contract. Usually, it is provided that these are also borne by the buyer, since they will benefit from them as the future owner.

Ordinary and extraordinary maintenance of the apartment

All maintenance costs, both ordinary (repairs, minor interventions) and extraordinary (boiler replacement, system overhaul, internal renovations), are entirely borne by the buyer.

Remember: from the moment of delivery, the property is at your disposal and under your responsibility. If something breaks, you are the one who must repair it.

Advantages and risks for those buying a home with this formula

Like any contractual instrument, a sale with reservation of title has its pros and cons. Let’s look at them transparently.

Advantages for the buyer

• Immediate access to the property without a mortgage: this is the main advantage. You don’t have to wait years to save up the 20% down payment, you don’t have to pass bank stress tests, and you don’t have to demonstrate exaggerated asset guarantees. You sign, pay the first installment, and the keys are yours.
• Locking in the purchase price: in a growing real estate market (like that of Florence and Prato in recent years), this is a huge protection. The price agreed upon today remains fixed for the entire duration of the contract, even if real estate values rise by 15-20% in the meantime.
• Flexibility in structuring installments: you can freely negotiate with the seller monthly, quarterly, or semi-annual installments, with or without interest, and with the possibility of early repayment. Every contract is customizable based on your economic needs.
• Protection through transcription: the transcription of the deed in the real estate registers protects you from any creditors of the seller. If they have financial problems, your position remains secure.

Risks for the buyer

• Loss of installments in case of default: this is the most serious risk. If for some reason you are unable to pay the installments and the contract is terminated, the seller can retain all sums already paid as “fair compensation” for the use of the property. According to established case law, this mechanism is lawful, although a judge can reduce the compensation if they deem it excessive.
• Responsibility for all risks from the start: if the property suffers damage (fire, flooding, earthquake) during the installment payment period, you are the one who suffers the economic consequences. For this reason, a comprehensive home insurance policy is very strongly recommended.
• Difficulty of resale during the installment period: until the final installment is paid, you cannot freely sell the property because you are not yet the owner. You would need to find someone willing to take over your contract (with the consent of the original seller), which is not a simple operation.
• Complexity in renovations: if you want to carry out major renovation work, technically you should have authorization from the seller (who is still the formal owner). It is fundamental to include clear clauses in the contract that give you maximum freedom of action.

What happens if the buyer stops paying the installments?

If you are unable to pay one or more installments, the seller can:

1. Formally demand payment, granting you a deadline (usually 15-30 days) to settle the arrears
2. If the non-payment persists, terminate the contract for breach

In case of termination:

• The seller regains possession of the property
• You must vacate the home
• The seller retains the installments already paid as “fair compensation” for the occupation of the property during the period.

This clause is provided for by Art. 1526 of the Civil Code and serves to compensate the seller for the lack of enjoyment of the house and for the wear and tear of the asset. A judge can still reduce the amount retained if they deem it disproportionate to the time of occupation.

Why it is advantageous in Florence and Prato: the analysis by Idee&Immobili

In the real estate market of Florence and Prato, sales with reservation of title are making a comeback for very concrete reasons.

The mortgage problem in high-tension markets

Florence and Prato are very dynamic real estate markets, with prices that have seen sustained growth in recent years. The problem? Banks have tightened the criteria for access to credit. Today, obtaining a mortgage at 80% of the value (therefore with only a 20% down payment) has become very difficult, especially for:

• Self-employed workers or freelancers with variable incomes
• Young couples with fixed-term contracts
• Those who have other ongoing loans

The result is that many people with a solid and stable income find themselves unable to purchase, missing out on opportunities for properties perfect for their needs.

The bridge solution toward a mortgage

A sale with reservation of title often works as a “bridge solution”: you move into the home immediately by paying installments to the seller, and after 2-3 years, when your economic situation has stabilized or you have accumulated enough job seniority, you apply for a mortgage to settle the residual debt in a single payment.

In this way:

• You don’t lose the home you like
• You lock in the purchase price (protecting yourself from future increases)
• You demonstrate a history of timely payments to the bank (which strengthens your creditworthiness)
• You have time to settle your financial position.

Buying with awareness with Idee&Immobili

A sale with reservation of title is a powerful and concrete tool for those who want to move into a home immediately without waiting for a bank mortgage. It is not a solution for everyone, but for the right people (with a stable income but limited initial liquidity) it can represent the key to realizing the dream of a first home.

As always, the difference between a good investment and a risky operation lies in awareness. Have expert professionals by your side, read the contract carefully, and honestly evaluate your ability to sustain the installments over time.

Idee&Immobili is at your disposal to guide you through every phase of this journey, from selecting the right property to the final signing at the notary. Because buying a home is an important choice, and it deserves to be made with peace of mind and security.

Frequently asked questions about sales with reservation of title