Convention - what does that mean for buyers?

Anyone looking to buy a property in South Tyrol will sooner or later come across the term "conventionalisation". But what is it all about and what does a conventionalised flat mean for the buyer? We at IMMOBILPOINT provide an overview.

The exact legal text can be found in the provincial law of 10 July 2018 in Art. 39.

 

CONVENTIONAL OR NON-CONVENTIONAL?

Conventional flats differ from non-conventional flats in that the law does not allow them to be used by everyone. By complying with precise regulations (conditions for occupation of the property), also known as the "binding nature of the dwelling", the legislator seeks to strengthen the development and social welfare of South Tyroleans and long-term residents. The conditions for entitlement contained in a conventional property and the associated social ties can be summarised as follows:

Requirements for occupation of a conventional flat

• Registered residence in South Tyrol at the time the building licence is issued
• Registered residence/place of residence in South Tyrol for at least 5 years
• proper employment contract in the province of Bolzano
• registered residence in South Tyrol for at least 5 years prior to the temporary emigration
• no family member may be the owner of a dwelling appropriate to the needs of the family that is easily accessible from the place of work or residence, or have a usufruct or right of residence in such a property

When letting a conventional property, the rent is capped by law according to certain criteria (letting at the provincial rent with mandatory permanent use). If it is not let permanently, it can also be "compulsorily let" by the Office for Subsidised Housing and in view of the lack of rental properties.

The commitment of a conventional property, which was limited to 20 years according to the old Art. 79 and then changed to a non-conventional property, is now permanent and de facto unlimited according to the new Art. 39 from 2018.

WHAT DOES THE COMMITMENT MEAN?

The commitment for conventional flats refers to the fact that the flat must be permanently occupied for one's own housing needs. Residents must have lived or worked in South Tyrol for at least five years and have not previously owned suitable accommodation. The flat may not remain empty either. Anyone who buys a flat and is not resident in South Tyrol must rent the flat to someone who meets the requirements at the provincial rent. This procedure is intended to counteract the housing shortage in South Tyrol and provide local residents with affordable housing.

For new buildings, the commitment is permanent. In the case of existing properties, the commitment can expire after 20 years, which makes the property a non-conventional property with free use. A distinction must also be made in detail between legally prescribed and voluntarily entered into commitments. A declaration of no objection from the mayor is required to cancel the commitment.

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