With Italy’s timeless appeal, and tax reforms which have cut the cost of buying by 10 percent, there’s never been a better time to invest in Italy real property market. But as with any other real estate purchase – particularly in a foreign land – there are some common sense guidelines to follow to ensure that buying your dream home won’t be luxury law.
1) CONSIDER DIFFERENT REGIONS
Tuscany remains the most sought-after overseas buyer’s most desired region in Italy. However, other regions like Sicily, Abruzzo, Calabria and Le Marche are far cheaper and offer stunning scenery and beaches. Take several days at a time , and see which areas you prefer best. Make sure you’re within access to local services or unless you intend to be in complete isolation. In the case of viewing properties, there’s the term “too” many. In the event that you try to squeeze 40 visits in the span of a weekend is an exhausting slog. When you’re at No. 35 most likely, you’ll not recall anything from the previous two dozen.
2) BUDGET REALISTICALLY
The famous Tuscan cities like Florence, Lucca and Pisa and its beaches at Versilia and its beautiful rolling hills will always be popular for property buyers. In spite of its cost it is also a place to live in a budget that are priced at Garfagnana located in Northern Tuscany as well as Maremma in Tuscany’s south being just half what you see in trendy Chianti. One word of caution As we’ve already said, the Italian housing market hasn’t experienced the same decline as other countries. As such, expect to see discounts that are less than 10% off of asking prices.
3) FIND A GOOD REALTOR
This is a good time to be thankful thanks to Italian regulations. Realtors need to be professionally licensed, accredited, insured, and registered with an Chambers of Commerce. Visit their websites and letterheads to confirm that they are members of one of the respected organizations: FIAIP (Federation of Professional Estate Agents), FIMAA (Federation of Mediators and Agents) or AICI (Italian Association of Estate Agents).
4) DON’T TAKE ON TOO MUCH
Don’t over-commit yourself. The thought of renovating an old ruin might sound appealing but are you ready for the effort and the cost that it will require? Renovating a property in competition can cost as much as Euro 1500 per square meter. Another common mistake is purchasing property that is bigger than what you really require. A huge farmhouse with a swimming pool and 5 hectares of vineyards and olive groves is a dream, but do not overlook the cost of maintenance.
5) ENGAGE A LAWYER
In spite of having to deal with a completely foreign legal system that is a foreign language, some foreign buyers continue to make a mess of it by shouting their ways through the Italian buying process without consulting having a legal professional (avvocato).
The risks inherent to this strategy are innumerable. Many sign documents that they don’t understand, and later are entangled by a legally binding contract. In addition, it can mean that several vital checks that a reputable lawyer should carry out being ignored.
These include ensuring that the vendor is registered and is legally authorized to sell. If the property is jointly owned by several family members, which is a common circumstance in Italy and elsewhere, everyone must be in agreement to the sale. The property, as well as any subsequent modifications need to be authorised for planning.
Additionally, Italian law means any mortgages, loans, utility bills, etc. that are related to the property pass on over to the owner who will take it. So lawyers must verify that there are no charges left.
Hire a reputable independent English-speaking avvocato that is personally to you. You can also consult a lawyer’s directory like hg.com.
6) KNOW THE PROCESS
When the seller and buyer agree on to a price, the purchaser deposit 5% of the amount and offers (proposta irrevocabile of acquisition) in order to “reserve” the property for approximately two weeks. If the buyer’s surveyor or lawyer agree for the sale, a preliminary contract (compromesso) can be executed where both parties agree on a date and time frame, and the buyer pays an additional deposit, increasing the amount of his payment to between 25 and 30 percent. Each party is at risk of serious financial penalties if they fail to pay in this stage.
The final step is the sale’s final deed (atto in vendita) which is signed at an office of a notary. The buyer pays the outstanding amount with the use of an Italian Bank draft. Prior to the atto di vendita is completed, the buyer must have a tax code from the tax office in his area so that it is possible to open a bank account.
7) KNOW YOUR ADD-ON COSTS
Taxes and fees typically increase by 7% to 10% of the price of a property that is resold and 12-15% to new construction. Common add-on costs include approximately 3% of agent, Euro 500-1500 for a surveyor, Euro 150-200 per hour for a lawyer, and up to Euro $5,000 for notary.
For new homes, VAT of 4% is charged if within one year and half of the purchaser registers for Italian residency, which is a relatively easy process. If not, the buyer is charged VAT at 10 percent.
For properties that were previously occupied The buyer is required to pay an amount of 3% on”cadastral value “cadastral value” if residency is granted within one year and a half otherwise, 10 percent of the cadastral value is due. Cadastral value is determined at the Land Registry based on factors like the size of the rooms, space, floor area and so on. It’s usually less than 50% of the the purchase price.
8) USE A FOREIGN CURRENCY SPECIALIST
Through 2009 the Sterling-Euro exchange rate fluctuated between a peak of pounds /Euro 1.185 and an ebb of 1/1.059 throughout 2009. So the purchase of the purchase of a Euro 750,000 home would been priced at a price of pound 77,000 more at the bottom of the market, compared to the peak. This is why it is important to choosing a specialist currency exchange service, who are able to determine the rates of future transactions as well as protect against changes in currency. They also provide more favorable rates than banks which can result in an extra pound 30,000 for a transaction of pound 750,000.
9) CONSIDER RENTAL POTENTIAL
The option of selling your Italian property is a great method to finance your investment. Make sure that you’re in easy reach of transportation hubs. If you’re looking at the market that isn’t Italian try to be 60-90 mins from the nearest airport. If you are buying in a major city or town, be sure that trains and buses are in easy reach. Homes near the coast be a great rental opportunity and will retain their value due to the strict limitations on building new homes in these regions.
10) TRY THE LOCAL LANGUAGE
Make an effort to learn Italian Even when you only visit to your Italian residence for just a few days throughout the year. The further you travel to the south the more likely it is that the locals are likely to speak that isn’t Italian. Your efforts, however awkward, will be a source of pride to the people who live there.