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By: Adriana Giglioli
Italian tax changes have reduced house purchasing costs by 10-15%. Combined with the country's ceaseless attraction it means there has rarely been a more opportune time to invest in the Italy real estate market. Yet as with any house-buying process, there are simple steps to follow to ensure everything runs to plan. Here are the 10 most important: 1) DON’T GET HOOKED ON TUSCANY Tuscany is Italy’s best-known region, attracting one in three visitors who comes to the country. It’s also its most expensive. Yet other areas such as Le Marche, Calabria and Abruzzo are far cheaper and also have breathtaking landscapes and azure-blue seas. Try various locations to see what areas you like best. Ensure you are reasonably close to local amenities, unless you deliberately want to be in splendid isolation. And when it comes to visiting potential properties, there is such a thing as too many. Trying to cram 60 into a weekend simply turns into an arduous marathon. By the halfway mark, chances are you will struggle to recall much of what you have seen so far. 2) GET REAL ON PRICES Yet Tuscany’s picture-postcard allure is undeniable, from the lush rolling hills, vineyards and olive groves of its countryside to historic appeal of its art cities such as Florence, Lucca and Siena. Buying here remains a gilt-edged investment. But bear in mind that apart from a few pockets, such as Garfagnana to the north of the region and Maremma to the south, most of Tuscany is not cheap and in highly sought-after areas such as Arezzo and Siena, you would be doing well to pick up a three-bedroom farmhouse for much less than US$750,000. In addition, don’t expect half-price bargains in Italy – discounts of around 10% remain typical. 3) FIND A REALTOR Getting taken for a ride by some incompetent cowboy could prove costly. Genuine real estate agents must hold a professional licence, qualification and indemnity insurance and be registered with a Chamber of Commerce. Their publicity material and website should show membership of one or more of the following: AICI (Italian Association of Estate Agents), FIMAA (Federation of Mediators and Agents) or FIAIP (Federation of Professional Estate Agents). 4) DON’T TAKE ON TOO MUCH Don’t over-commit yourself. The idea of renovating a rustic ruin may sound romantic but are you prepared for the work and expense? Complete restorations can cost up to Euro 1,500 per sq m. Other common errors include buying property far bigger than you strictly need. A large farmhouse with pool and 5 hectares sounds fantastic, but don’t ignore the maintenance involved. 5) USE AN AVVOCATO For most buyers the Italian process will be unfamiliar, so hire an independent bilingual lawyer (avvocato) with expertise in Italian real estate. Avoid signing documents on your own without knowing what you are committing to. Another consideration: any unpaid mortgages and loans on the house? Plans for a new highway 400 yards away? Was the property built with planning permission? All are vital checks your lawyer will perform. 6) FAMILIARISE YOURSELF WITH THE SYSTEM After a price is thrashed out the purchaser submits a proposta irrevocabile di acquisto with a deposit of some 5% to take the house off the market for two weeks. If the buyer’s lawyer and surveyor give the go-ahead, the following stage is when both sides sign a preliminary sales contract, in which they agree a timetable for completion. A second sum is paid, bringing the buyer's total downpayment to around 30%. There are heavy penalties if either side pulls out at this stage. The last procedure is to sign the final contract (rogito) in a notary’s office, who scrutinises all papers and sends them with the Land Registry. The buyer pays the balance, usually by bank draft from an Italian bank. Thus he will need to have obtained a fiscal code from tax authorities so he can apply for a bank account. 7) CONSIDER EXTRA COSTS Taxes, fees, etc, add 7%-10% on top of the price of resale properties and 12-15% for new-builds. Expect around 3% to the realtor, US$210-280 per hour for a lawyer, US$700-2100 for a surveyor and US$2,800-7,000 for the notary. For new-builds, there is 4% VAT if within 18 months you register for official Italian residency – a relatively straightforward process. Otherwise, 10%. For non-new-builds, the buyer pays 3% of cadastral value if residency is registered for within 18 months. Otherwise, 10% of cadastral value. Cadastral value – often far less than the purchase price – is assigned by the Land Registry based on factors such as floor area, number of rooms, etc. 8) USE A FOREX FIRM Over the course of 2009 the Sterling-Euro rate veered from a £1/Euro 1.185 peak while troughing out at £1/Euro 1.059. So a UK buyer weighing up a Euro 400,000 villa could have faced shelling out up to £41,250 more just for taking the plunge at the wrong moment. Hence the importance of using a specialist currency exchange company, who can fix rates for future deals to safeguard against currency fluctuations. They give more impressive rates than a bank and could save you £16,000 on a £400,000 deal. 9) CONSIDER RENTAL Will your property primarily be a holiday/retirement home or do you plan to rent it out at some stage? If so, proximity to transport hubs is vital. Aim for a maximum 1.5 hours from the nearest international airport. In big towns and cities, consider proximity to public transport as not all visitors will have access to a vehicle. Properties near a beach rent better and keep their value over time because of tough laws on new construction in these zones. 10) TRY THE LANGUAGE Do your best to pick up some useful Italian words. Bear in mind that in contrast to countries like Sweden and Denmark, a mere 28% of Italy speaks English, one of the lowest figures on the continent. Don’t be afraid to make mistakes as your attempts, no matter how rudimentary, will impress locals.
About The Author:
The author writes for property in Italy specialists Homes and Villas Abroad, who showcase 2,500 homes in Italy. Her areas of expertise include Sicily property and Calabria property.
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