A Dummy’s Guide To Buying A Home In Italy

Submitted by: Adriana Giglioli

A recent tax overhaul in Italy has slashed homebuyers costs by up to 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 real estate transaction, there are simple steps to know to ensure everything runs to plan. Here are the 10 most important:

1) LOOK BEYOND 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 Puglia, Sicily and Le Marche are far cheaper and also have spectacular vistas and coastlines Spend a few days at a time 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 viewing potential purchases, there is such a thing as too many. Trying to cram 45 into a weekend simply turns into a gruelling slog. By property No35, chances are you will remember little of the first two dozen.

2) YOU GET WHAT YOU PAY FOR 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 GOOD REALTOR This is one occasion to be grateful for Italian red tape. All realtors must be professionally licensed and qualified, insured and registered at a Chambers of Commerce. Check their website and letterheads to ensure they belong to one of the following respected organisations: FIAIP (Federation of Professional Estate Agents), FIMAA (Federation of Mediators and Agents) or AICI (Italian Association of Estate Agents).

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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) TAKE LEGAL ADVICE Many investors sign documents and then discover they have made a binding commitment. Engage a reputable lawyer with experience of the Italian system. Are there plans to build a sewage works 500 metres away? Unpaid mortgages on the property? Built without planning permission? A good lawyer will avoid such pitfalls.

6) KNOW HOW THE SYSTEM WORKS After a price is fixed the buyer submits a proposta irrevocabile di acquisto with a deposit of some 5% to remove the property from the market for two weeks. If his surveyor and/or lawyer give the OK both sides sign a compromesso, in which they agree a timetable for completion. A second deposit is paid, taking the buyer’s total downpayment to around 30%. There are heavy penalties if either side pulls out at this stage. The next procedure is to sign the final deed of sale (atto di vendita) in the presence of a notary (notaio), who examines all papers and lodges 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 Fees and taxes usually add 7%-10% to a resale property and 12-15% for a new-build. Typical add-on costs: 3% to the realtor, US$700-2100 to a surveyor, US$210-280 per hour for a lawyer and up to US$7,000 for a notary. For new-builds, 4% VAT is levied if within a year and a half the buyer registers for Italian residency. Otherwise VAT is 10%. For previously inhabited properties, the buyer pays 3% the cadastral value if residency is registered for within a year and a half, otherwise 10%. Cadastral value is decided by the Land Registry based on factors such as number of rooms, location, floor area, etc. It is usually less than 50% of purchase price.

8) DON T GET SHORT-CHANGED ON FOREIGN EXCHANGE In 2009 the Sterling-Euro rate veered between a low in January of 1/Euro 1.06 and a high in June of 1/Euro 1.19. That means buying a Euro 500,000 home would have cost a UK-based buyer 51,500 more at the start of the year than in summer. Hence the importance of using a specialist currency exchange company, who can fix rates for future deals to safeguard against currency fluctuations. They have far better rates than other financial institutions and could in comparison mean a 30,000 difference on a 750,000 transaction.

9) MAXIMISE RENTAL POTENTIAL Do you plan to let out your property? If so, proximity to transport hubs is vital. Aim for a maximum 1 hr 30mins 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. Villas and apartments near a beach rent better and keep their investment value over time because of limits on new construction in these zones.

10) TRY SOME ITALIAN Or as the Italians would say: Cercare di parlare la lingua!. Be aware that in contrast to parts of Northern Europe, fewer than 30% of people here speak English, one of the lowest ratios in the EU. Don t be afraid to embarrass yourself as your efforts, no matter how awkward, will be warmly received by locals.

About the Author: The author writes for real estate website Homes and Villas Abroad (


), specialising in Sicily properties (


) and Tuscany real estate (





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