RENTING A HOUSE AND LIVING IN MILAN
Just arrived? Looking for a flat or a house to rent in Milan, and generally speaking in Italy? Here you'll find all what you have to know!
THE AGENCY
In Italy, especially in big towns like Rome or Milan, the housing market is almost totally in the hands of real estate agencies. This happens because they can take care, on behalf of the owner of the property, of all the procedure of selling and/or renting a property, including the various steps of bureaucracy (the contacts with the owner/lodger, the planning of the visits, the offer, the contract, the registration of the rental contract, etc.).
A person wanting to sell or to lease a property by himself/herself, especially if he/she works all day, would have to waste a lot of time while dealing with this kind of matters; therefore almost everybody usually asks one or more agents to handle everything. Even when a house seems to be advertised online by a private person, when you call you discover that it is an agency.
Since the offers of the housing market may change quickly, real estate agencies do not update very often their adv entries on the various websites, so you may see something online that is not available anymore when you call.
Renting through an agency means to pay the agency’s fee, which is, in the majority of cases, around 15% of the annual value of the contract (usually the annual value in this case does not include condo fees) + VAT 22%.
The % depends on the agency and on the characteristics of the flat/house. If it is a highly requested property due to its internal or external characteristics, its position, any recent renovation works, etc., the percentage may rise to even more than 15%. The % of the agency is, sometimes, slightly negotiable. Some other agencies ask as a commission a sum equivalent to 1 or 2 month installment/s, whichever is the amount of it, also in this case + VAT 22%.
The agency’s fee is paid only once, normally at the signing of the contract or immediately after, via bank transfer. You will receive a regular invoice for the payment of the agency's fee.
Depending on the kind of agreement the agent has with the owner of the flat, the agent may also remain your main referent in case you have any kind of issue with the property, while living in it.
If a property if offered directly by the owner, you will have anyway to make an offer and sign a contract that will need to be registered with the tax registry in any case. The process may be quicker, but the contract, and the registration of it, are mandatory; if you are offered directly by the landlord not to have the contract registered, we warmly suggest you not to sign it! It’s against the law!
TIME TO SEARCH, TIME TO DECIDE
When you are searching for a flat or a house, very often you can’t expect to get the possibility to see it from one day to another. To take an appointment to see the property, the agency needs to inform the owner and in case he/she wants to be present during the visit, the agency has to match its availability with the one of the owner and, of course, yours. If the apartment is still occupied, the agency must also check the availability of the actual tenant to receive visits.
Another factor to take into consideration is that sometimes, in many agencies, each agent manages a certain number of properties. Not all the properties are managed by all the staff of the agency, therefore you depend on the availability of the single agent in charge of managing the specific property you are interested in.
At a certain point you will need to start considering which are the properties you like the most among the ones you have already seen and make a decision.
For instance, talking about Milan, even though it is a big city, it isn’t so big for what concerns the housing market, especially in certain periods of the year. What was available one week could not be available the following one; so, if you like a property and the price is reasonable for you, you will have to be steadfast at some point.
Furthermore, the real estate market and its offer varies considerably depending on the geographic area and the town where the search for a house is made. For example, looking for a “trilocale” apartment (that is to say: 1 kitchen, 1 sitting room, 2 bedrooms and 1 bathroom) in Milan through one or more dedicated we portals, without applying any filter on the conditions or characteristics of the properties, you get an average result of around 1,000/1,200 ads, but applying necessary filters relating to budget, condition of the property (good!), air conditioning, lift and a cellar, the choice may be reduced to 80 ads and down to 40 by putting more filters (for instance the area of the town, the presence of a garage/parking place, etc.). Furthermore, among the results, there might be several offers just for transitory contract (6 to 18 months) or dedicated to students.
In municipalities outside Milan (or generally speaking in smaller municipalities), the starting point of the research could be only a few dozen results, which is reduced to a few units by inserting certain characteristics in the filters of the research.
It is important to be aware of the above because, nowadays, the offer of apartments for rent is significantly lower than those for sale while the demand is much higher. As a result, not only have prices increased (making a comparison with the previous 2 years), but if an apartment is nice and offered at a market price, it will be rented in a flash. That's why, at a certain point, if you think you've seen something interesting, you need to proceed quickly with the following steps.
THE OFFER
When you are interested in a flat/house, you can make an offer on it through the agent, who will let the owner have your offer. The offer is usually valid for no more than 2 weeks (unless differently agreed by both the owner and the interested party), so the owner has to give an answer within that time. Always remember that the offer is binding for both the owner and the tenant-to-be; if the owner accepts it, he will have to rent you the flat, but on your side, there is no room for second thoughts, because if you change your mind, you will lose the money paid for the offer.
How it works:
- You decide the amount you want to offer for the monthly fee. This amount can be slightly lower than the advertised/proposed price, but it should be in line with the average value of the property and similar properties in the same area. If the offer is too low, you will face a sure reject. The offer only refers to the rent, since the condominium fees, if the property is inside a block of flats or a group of terraced houses, are fixed and cannot be changed by the owner of the flat or by you.
- The agent fill in a document – a standard one as per the Italian civic laws and regulations – which includes all your data, the ones of the owner, the characteristics of the flat/house, the condition of the flat/house, your offer for the monthly rent, the amount of the condo fees, the characteristics of the contract, the amount of the security deposit (usually 3 months’ installments), the duration of the proposal, the amount of the agent’s fee, and a few other legal notices.
- You sign the document contextually providing a payment equal to 1 month installment (equivalent to your offer), or other amount agreed with the real estate agent, via bank check, bank transfer or cash. By the way, not all agencies accept cash due to the Italian anti-money laundering regulations. If you are buying - not renting - a flat/house, the value of the check/bank transfer must be much higher than a single month installment.
- The owner may accept or refuse the offer. If the offer is accepted, the owner will keep the money you paid, which will be the 1st monthly installment (or a part of it, depending on the amount paid) and a contract has to be signed within 1 month or earlier than that (anyway within 1 month). The sooner the better for you, since you are already paying. If the owner refuses your offer, you may decide to increase it or not.
Always remember that the offer is legally binding for both the owner and the tenant-to-be; if the owner accepts it, he/she will have to rent you the flat, but on your side, there is no room for second thoughts, because if you change your mind, you will lose the money paid for the offer!
Nowadays, depending on the agency and the owner, the offer can also be sent by email. Sometimes this is enough, sometimes you still have to go through the step of signing the paper document.
THE CONTRACT
A rental contract is different from a contract used to buy a flat/house. Let’s focus here on the rental contract. The contract will contain again all the main points of the offer and will be more specific on several points regarding i.e. payments and maintenance of the property.
Regarding Italian terminology, in the contract the owner will be referred to as the “Locatore” while you will be referred to as the "Locatario" or “Conduttore” (tenant or lodger).
Rental contract must be registered with the local tax authority within 1 month from the signing. Usually, the agent or the owner takes care of the registration, and you will receive a copy of the registration’s act/receipt, to be kept together with your copy of the contract.
The duration of the contract depends on the type of rental contract. The majority of owners chooses the “Cedolare Secca 4+4” kind of contract because they will pay less taxes on it. Furthermore, the “Cedolare Secca” contract has no annual registration’s fee, both on the side of the landlord and the lodger.
This contract, on a regular basis, lasts 4 years and can be renewed for other 4 years (that’s why 4+4). During the first 4 years the monthly installment will always stay the same, so - notwithstanding the possible variation of the national inflation index - there won’t be any CPI adjustment during the first 4 years.
Even if the duration is 4+4 both the owner, for seriously valid reasons (i.e if he/she needs the property for himself/herself or for the family) and the lodger (for work or other reasons) can terminate the contract, with - at least - a 3/6 months’ notice sent to the owner/tenant via registered mail. The contract is automatically renewed in the absence of written notice of termination, received at least 3/6 months prior to the expiration.
There is also another kind of contract whose duration is again usually 4 years. This kind of contract, which has registration fees to be paid both by the owner and the lodger, is used if the rent is to a company and not to a private person (it is mandatory) or if the owner of the property is a company renting to a private person or to a company. With this kind of contract the owner will have to pay more taxes, while with “Cedolare Secca” contract the owner pays a lower (anf fixed) % of taxes per year. For this reason the advertised price, which in the majority of cases refers to lease to privates, can be increased by the owner so that he/she will be able to cover the increase of the taxes to be paid.
Whichever is the type of contract, at the signing of it, the standard request is that you pay a 3 months’ security deposit and 1 up to 3 months’ installments in advance. The security deposit cannot be used to cover possible rent dues, unless otherwise agreed in the contract.
You will be given back the entire deposit at the end of the lease, after an inspection of the flat/house, unless the landlord claims a payment for slight or serious damages to the property caused by you or for other reasons. For example, normally if you receive a whitewashed flat it must be returned in the same condition, freshly painted. If the tenant has no way or time to take care of the whitewashing of the property before leaving it, he/she can ask the landlord to take care of it and the landlord will deduct the cost from the security deposit.
CONDOMINIUM FEES AND HOUSEHOLD UTILITIES
If the property you would like to rent is inside a block of flats or a group of terraced houses, small or large, you will have to pay condo fees.
These expenses usually include: concierge (if there is one), building ordinary maintenance, common parts electricity, garden maintenance (if there is one), ordinary cleaning of all the common areas including stairs, heating (if the building has a centralized heating system), cold water and sometimes hot water.
In new buildings or terraced houses/group of houses, the condo fees may include also cooling and, partially, electricity. Anyway, everything is always clearly specified in the rental contract.
You have to register on your own name the contract for domestic utilities such as electricity, gas (for hot water and kitchen) and the internet connection, unless differently specified in the rental contract or by the owner.
Normally, during a year, you will receive 6 bills for electricity (one every 2 months) and 4 for gas (one every 3 months), but it also depends on the chosen supplier (there are many and offers change continuously); average costs mainly depends on the consumption, apart from some fixed fees (transport, taxes and administration fees). Internet connection is paid monthly. Main suppliers are: Vodafone, TIM, Fastweb, etc.
Due to the war in Ukraine, since 2022 the costs for the supply of gas and electricity have increased significantly in Italy and consequently also the bills are currently more expensive than a few years ago.
You have to terminate the utilities’ contracts when leaving the flat/house (unless differently agreed with the owner/agent). It is highly suggested to ask your landlord what he/she prefers to do with the supply of gas and electricity once you live; he/she may prefer to have the contracts registered at his/her name, if nobody will immediately enter the property. Terminate and reopen a contract it's longer and more expensive.
THE INSURANCE
The house insurance is sometimes a mandatory requirement included in rental contracts. The owner of the property may add a specific point into the contract stating that he/she requires proof of the existence of an insurance even before handling over the property or within the first month of rent. Sometimes the request is not in the contract, but it is verbally asked.
Whichever is the way in which you are requested for it or not, issuing a basic insurance policy it’s a good idea to protect you and your belongings, since the owner will not be responsible for any damage occurred to you, your belongings or your neighbors for something incidentally caused by you.
The rate charged by insurance providers is usually about 200 up to 400 Euro per year or more, depending on the features of your house and what you want to protect.
Household insurance policies are offered by several national and international companies in Italy. Very often you can apply online, customizing your policy (i.e. Zurich Connect, Aviva, etc.).
The suggestion is to have a good cover at least for damages in case of fire, water leaks and third part liability.
By the way, a policy covering theft perils or damages usually requires a certain number of safety measures existing in the house, e.g. a security door and proper locks on windows and shutters as well as all other possible openings.
MAINTENANCE
Renting a flat and living in it in Italy it’s not like living in a long formula residence or an Airbnb solution, where, for instance, you can have the change of the bedroom’s sheets, the bathroom’s towels or you can have any kitchen's piece of furniture or electronic device repaired/changed by the proprietor.
Usually in the rental contract there is a specific point dedicated to maintenance. This point refers to the Italian Civil Code and the current laws and regulations at this regard.
The general rule applied to maintenance and repairs is:
- The tenant is responsible for ordinary maintenance. For instance: the fridge is in fairly good condition when you start living in the house and after a few months it has a slight problem, you should take care of it and pay for the repairs. There is a minor leak from the siphon of the bathroom’s basin, you call and pay the plumber. But in case the appliances inside the house are all new and you experience a problem with one of them, this is not caused by usage, but it may be caused by a problem of the device, which can still be covered by a form of warranty (being new). In this case the owner can take care of the necessary steps to have the appliance repaired or replaced.
- The landlord is responsible for extraordinary maintenance. For instance: there is a serious water leak in the flat/house, which is not due to the usage, but it is related to condominium pipes or to the “age” of the pipes inside the flat/house. The owner will take care of it and pay for the repair.
This is the general rule, but it also depends on the owner, who may also be willing to take care even of minor issues in the flat/house.
Anyway you always have to let the owner be aware of any problems in the flat/house. Sometimes the real estate agent may also remain your referent in case you should face any kind of problem inside the flat/house.
TARI TAX (garbage tax)
This is a tax on garbage collection and recycling, which has to be paid to a dedicated tax registry's office of the local municipality, where the flat/house is located, by all homeowners or tenants/lodgers (if the flat is rented), without exception.
It is the person/family living in the flat, actually “using” the flat and producing garbage, that has to pay the garbage tax.
The tax is made up of two parts, one fixed part based on the sqm of the flat/house, and one variable part based on the number of persons resident in the property; each Italian region may also apply some extra factors to this calculation.
The registration with the local garbage tax registry of the town of residence has to be done within 90 days from the signing of the contract (the sooner, the better) and can be done via email or online or going directly to the office (depending on the municipalities), attaching/bringing:
- a form that needs to be filled in with all your data, those of your family (if any member of your family lives with you) and the land registry’s details of the house (that you can find usually on the contract),
- copies of your documents: permit of stay or postal receipts of the application (for extra-EU citizens), passport, Italian fiscal code, Italian ID card (if you already have it),
- copy of the registered rental contract,
- copy of the residence application receipt (while waiting for the residence procedure to be terminated).
A few months after the application, you will receive a bill via email or via registered post at your residence address. The amount of the bill can be paid altogether or in 4 installments (also via bank transfer or online bulletin).
RESIDENCE APPLICATION
Applying for the residence is fundamental for almost anything related to bureaucracy in Italy and it is mandatory within 90 days from the entrance in Italy, and asap after the signing of the rental contract.
Due to the fact that almost all the big towns in Italy are overflooded by residence requests by immigrants and refugees of many different nationalities, the residence procedure may take a while to be closed, usually 2/3 months (in 2018/2019, 9/10 months was the expected time for the fulfillment of the procedure).
The sooner you apply, the better it is, and the receipts of the residence application can be legally used to prove that you applied for the residence and for many different bureaucratic reasons, for instance to apply for the health cards and the family doctor.
The local municipality of Milan has recently updated the way to be used to apply for the residence. It is possible to apply directly online, after registering to the website of the Municipality of Milan. Up to today date, some texts are still partially written in Italian, and the procedure requirements may not be so simple to be understood.
What is generally needed:
- the filling of the residence application form with:
- All your personal data and the ones of the other members of the family transferring the residence with you.
- Copy of your documents and those of all the members of the family, the list of documents is different depending on nationalities: - for Extra EU citizens holding a regular permit of stay: copy of the permit, passport, Italian fiscal code, Italian ID card (if you already have it); - for Extra EU citizens still holding the receipts of the permit's request: the receipts, what above specified plus the copy of the Nulla Osta, of the Contract of Stay (Contratto di Soggiorno) and of the Modulo 209.
- copy of the registered rental contract,
- for dependent workers or self-employed professionals supporting the family, copy of the work contract or any other document proving the fact that the person applying for the residence actually works in Italy and can financially support the family,
- copy of the translated and legalized documents stating the status of your family (i.e. the marriage certificate and the birth certificate of any son or daughter that will also transfer the residence with you).
Outside of Milan the residence application may be done differently (via registered letter, via email, going directly to the desks of the municipality registry) and additional documents may be requested depending on the municipalities.
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Last update: December 2022