8 tips on buying a home in Italy

July 16th, 2016

Given Italy’s unwavering attraction that pulls in 40 million visitors annually; its centuries of culture and tradition; and the relative strength of the US dollar and other top global currencies against the euro, there has scarcely been a more ideal moment to buy real estate in Italy.

Indeed, many real estate experts forecast that demand for real estate in Italy, in particular from overseas buyers, to stay buoyant over the forthcoming 12 months.

So, if you intend to acquire a holiday home in Italy, here is a selection of basic guidelines to abide by:

1) DO YOUR GEOGRAPHICAL RESEARCH: Tuscany is overseas buyers’ favourite stretch of the country, attracting nearly 35 per cent of people who come here. As a consequence it is also its dearest.

There are other areas such as the south, which are far less expensive and also boast the same majestic landscapes and azure-blue seas. As an example, the Sicilian housing market fell by approximately 20-30 per cent since the start of the 2007-08 financial crisis.

Try various locations to see what areas you like best. Make sure you are within reasonable distance from local amenities, unless you deliberately want to be in splendid isolation. One tip is to take a look at a website such as where-to-buy-in-italy.com.

2) WHAT CAN YOU AFFORD? Despite the current world financial backdrop, the Italian real estate industry has not fallen apart like its Spanish counterpart.

A couple of years ago there was a much publicised offer to sell one-Euro homes in the Sicilian town of Salemi. But that was a one-off. Because the country did not go through the real estate boom of the first decade of the century, its prices did not suffer the same kind of plummet when the crisis hit.

As we had to tell one US client last year, just as US$65,000 wouldn’t get you a two-bedroom property in Upper East Side Manhattan, it won’t in the centre of Venice either. There are great deals to be had. But don’t expect them everywhere.

3) GET A RELIABLE AGENT: Italian law says all real estate agents must have a licence, qualification and the appropriate insurance and be registered with a chamber of commerce.

Their their website and prove they are signed up to either the AICI (Italian Association of Estate Agents), FIMAA (Federation of Mediators and Agents) or FIAIP (Federation of Professional Estate Agents). When investing abroad it’s important to avoid being ripped off, so this is one occasion to be grateful thankful for Italy’s scrupulous red tape.

4) SEEK LEGAL ADVICE: Despite an unfamiliar legal system in an unfamiliar language, some foreign buyers cut corners by blustering their way through the process without a lawyer (avvocato). The dangers are countless.

First, many sign papers they do not understand and are then bound to an irrevocable legal commitment. Second, it means a number of vital checks that a good lawyer would carry out instead go ignored.

They include ensuring the vendor has a registered title and is legally authorised to sell. Where a property is jointly owned by a number of family members, all must agree to the sale. And the property must have proper planning permission.

Also, Italian law means any loans, mortgages, utility bills, etc, relating to the house pass to the new owner, so a lawyer must ascertain no such charges remain. Try to hire a reputable, independent English-speaking avvocato who comes recommended. Or use a lawyers’ directory such as hg.org.

5) GET TO KNOW THE PROCESS: Once a price is settled on the purchaser makes a proposta irrevocabile di acquisto with a downpayment of some 5% to reserve it for around 15 days. The next stage, once the buyer’s surveyor and/or lawyer gives the green light, sees both sides sign a compromesso, in which a timescale to complete is decided.

A further sum is paid, taking the buyer’s total downpayment to around 30%. Defaulting carries serious repercussions. The buyer may forfeit all monies paid while the seller, if at fault, may have to pay back double the deposit.

The following step is to sign the final deed of sale (atto di vendita) in the presence of a notary (notaio), who examines all paperwork 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.

6) KNOW YOUR ADDITIONAL COSTS: Fees, taxes and commissions amount to an extra 7%-10% on top of the price of resale properties and 12-15% for new-builds.

Usual add-on costs might be around US$250 an hour to a lawyer, up to $2,000 for a surveyor, anything from US$2,750 to US$7,500 for a notary and 3% to the estate agent.

On new-builds, there is 4% VAT if within 18 months you register for official Italian residency – a relatively straightforward process.

Otherwise, 10%. For other properties 3% of the cadastral value is charged if the buyer takes out residency within a year and a half. If not, the levy rises to 10%. Cadastral value is decided by the Land Registry based on variables such as floor area, number of rooms, etc. and is far less than the property price.

7) TAKE CARE OF THE CURRENCY DIFFERENCE: You would not think making a significant purchase in your country without ascertaining the total price. However countless investors commit the same blunder in agreeing to acquire an Italian property with no idea what the price in euros equates to in their own currency.

This is where a specialist foreign exchange dealership is your best friend. It means you can secure a specific exchange rate half a year ahead, giving you peace of mind.

Yet ignoring foreign exchange ups and downs can be costly. For example, between the middle of 2011 and 2012, for a US citizen set on a Euro 500,000 property, the difference between the top and bottom of that cycle would top US$122,000. On no accounts use your high street bank, regardless of how long you have been a customer or – much worse – a currency exchange office at an airport.

8) MAKE AN EFFORT TO GIVE THE LANGUAGE A SHOT: Arm yourself with some useful Italian words. Be aware that unlike North-West Europe, more than 7 in 10 Italians speak no English, among the lowest figures on the continent. Don’t be afraid to make a fool of yourself as your efforts, no matter how clumsy, will be warmly received by locals.

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Why now is the ideal time to invest in Italian property

July 12th, 2016

If you are still pondering whether to invest in the Italian property market, many experts think there is no better time. There are so many signs that point to this summer in Italy presenting a safe opportunity for investment.

News and speculation on Italy’s property market

The price of housing in Italy is stabilising. The year 2014 presented the first signs of recovery since the recession in 2008. Prices in Italy are still eminently reasonable compared to a number of other EU countries.

Indeed, many experts consider that Italy currently has the best property deals in Europe.

This has made the Italian property market easily affordable and accessible for locals as well as foreign investors interested in moving to the country.

Furthermore, reasonably priced mortgage rates and lenders that are now more eager to give loans make the property landscape more appealing.

There are several great value real estate centres, many already popular with global investors — places such as Puglia, Lake Como and Tuscany, as well as the Dolomites and Le Marche, where houses are up to a third less expensive than in Tuscany.

In these locations, you will discover an extensive range of property at attractive prices — and you may even be able to negotiate lower prices.

Take advantage of cheaper prices

For bargain seekers, there is a growing market for property lower than €150,000, and it is expected to remain so throughout 2016.

The upturn from the recession has been particularly noticeable in bigger cities where prices had fallen by 30 percent compared to a decade ago. An upward turning property market in a region that has seen such price dips is going to attract more investors.

However, nothing is guaranteed in the currency markets, making it necessary to keep watching the marketplace performance and factors responsible for changes. Carpe diem, because in  Il Bel Paese property costs have been predicted to rise by the year’s end.

Tax-benefits on your Italian property in 2016

Buyers need to budget an additional ten per cent on top of property prices to cover additional costs. This is for items such as agency fees, stamp duty, legal costs and so on. However, the cost of owning property in Italy is low, particularly when compared to other countries. There is no capital gains tax if you sell after five years and no inheritance tax. Italy has also, in recent years, taken steps to simplify the buying process for foreign investors.

In addition, the Government has introduced policies to reduce the financial burden of property taxes with the introduction of finanziaria 2016. This means that home owners registered for Italian residency, as long as they aren’t buying luxury dwellings, are exempt from Tasi, the compulsory tax paid for community services such as road maintenance, garbage removal, street lighting etc.

Things to bear in mind before buying in Italy

  • Prices

As Sarah Copleston  from The House Shop explains, out unlike in, say, the London property market, Italian prices will more often than not be negotiable — sometimes by as much as ten or 15 per cent off the advertised prices.  Note that this is not a hard and fast rule.

  • Habitability certificate

Inquire from your seller/agent if the property has a habitability certificate. If it does not, you can use the opportunity to negotiate on price, because the vendor is mandated by law to provide a certificate if selling a residential property that needs no renovation. However, if you wish to, you may ask your vendor to start the process of obtaining one.

  • Mortgages

At present it is possible to obtain mortgages of up to 75 per cent. Note that mortgages are almost never given for properties worth less than €80,000.

  • Italian agents

Agent fees can be due as soon as an offer is agreed upon. Some agents act for both buyer and seller. In order to get a secure deal that is suitable for you, hire a personal, independent professional who will work solely with your best interests at heart. It also helps to get a good English-speaking Italian lawyer with a lot of experience if English is your mother tongue. Don’t hesitate, now is the time to get your dream property in Italy.

Italian property group eyes prestige London buildings

July 10th, 2016

It’s often more been common for British property hunters to descend on Italy in search of bargains.

But Sorgente, the Italian real estate conglomerate, is turning the tables as it eyes a string of “trophy” purchases in London.

Piazza Colonna in RomeIt already has in its portfolio Rome’s Piazza Colonna, left, and New York’s Flatiron building, below right, and in June shelled out £167million to add the Queensbury House in Mayfair, central London, to the list.

Now the group – which manages US and European property investments for Italian institutional investors – is in negotiations with other institutional investors about raising capital for a £400million fund to buy additional trophy assets in the UK capital.

Its UK Historic and Trophy BuildingsFlatiron Building in New York Fund will make up around 25 per cent of the £1.6 billion the company plans to set aside to purchase historically or architecturally significant properties across Europe and in the US.

Sorgente’s principal targets in London are landmark addresses in the capital’s prime Mayfair, West End and City districts.

But it is prepared to widen the net further and consider more modern commercial and office properties that have a global recognition factor.

Research commissioned by the group has demonstrated that over the past quarter of a century, such high-value properties in New York, Paris, Milan and Rome – ones that stand out for their architectural appeal, history, prestige location or iconic status – outperformed the rest of the real estate sector regardless of conditions in the wider market.

Sorgente director-general Stefano Cervone argued that such properties boasted a more impressive risk-return profile because they are unique, maintain their intrinsic value better and appeal to investors the world over.

“They are much more liquid as assets than a lot of others on the market as they attract a global investor and will always command a premium to other top-grade property,” he said.

“Tenants also want to stay in them as they develop an attachment to the building and want their company to remain linked with it.”

If you enjoyed this article, why not browse through our range of prestigious properties, characteristic farmhouses and affordable beach villas and apartments?

Four key foreign exchange tips for buying a home in Italy

July 5th, 2016

Do you plan to buy property in Italy?

Love the idea of owning a villa in Tuscany, somewhere you can jet off to when it all gets a bit hectic at home?

Then, part of the process of buying that dream Italian house is exchanging currencies. If you’re in the UK, that’ll be pounds into euros, and if you’re in the US, you’ll start with US dollars of course.

But how do you get the best exchange rate so as to maximise your euro total and get the best possible price? Below are some tips to make the “transferring money abroad” bit of buying your dream home as painless as possible.

1. Research the exchange rates ahead of time.

If you need to have money in your Italian bank account to complete the downpayment on your house in August, start to research the foreign exchange rates in March. This is because it gives you a big window in which to see how the rates are going, decide what rate you think you can reasonably achieve and change currencies at the right time for you.

If on the other hand you leave it to the last couple of weeks, you’ll be stuck with the available rate, regardless of whether it’s good or bad.

2. Find out where the exchange rates have been.

forexTo know whether the exchange rate you’re getting is good or not, you need to know where they’ve been in the recent past.

To find this out, you can either call a foreign exchange broker and ask (if they’re worth their salt, they should have no trouble telling you) or research the rates yourself.

In the latter case, Google Finance is invaluable. Just enter the currency pair you want to change (so if you’re in the UK, that’s pounds to euros, or GBPEUR) and it’ll return not only the latest exchange rate, but also those stretching back a decade. Perfect to see how the euro’s been performing.

3. Don’t assume your bank will offer the best rate.

In a lot of cases, people use their high street banks to transfer foreign currency because they’re familiar and people use them for all their other financial dealings. But in spite of this, don’t assume your bank will offer you the best exchange rate.

In fact, it’s common for banks to offer rates up to 4 per cent worse than those available from specialist brokers. That might not sound like much, but if you want to transfer £1,000 for instance, it will cost you £40 more to reach the same euro total. In other words, this fee can quickly add up.

4. Make sure you use a properly regulated service.

Regardless of where you change currencies, make sure you use a service that’s directly authorised by the Financial Services Authority in the UK (or, if you’re in the US, its equivalent.)

This is important because, if the company is FSA-authorised, it will maintain your funds in a designated client account, ring-fenced and protected. This is vital for your financial security.

To find out if a company is directly authorised by the FSA, meanwhile, either you can contact them or check on their website.

Italian homes are tops for Brits in new property-swap fad

July 4th, 2016

Italy is Britons’ top overseas choice for a new holiday craze – house-swapping.

Just under 3.5% of UK adults – an estimated 1.7 million – plan to take their vacations on the cheap this year – by agreeing to temporarily exchange homes with a family in a spot they would like to visit.

Joint top of the favourite foreign destinations are Italy – whose rich tradition offers countless Italian entertainment opportunities – and Spain, the choice of 15% of house-swapping vacationers. Some 12% plump for France and 10% the United States. Domestically, Cornwall, the Lake District, Devon and Scotland are the spots that head the list.

The number of people taking part in the trend has doubled since 2010. More than half of them cite the economic downturn as the No1 reason that they give a stranger the run of their home – and frequently car as well – for the chance to to spend a free week or two abroad in return.

The practice highlights how the economic downturn has altered Britons’ vacation habits. Figures from the Office for National Statistics show that people in the UK made 10 million fewer trips abroad in 2009-10 than in the preceding 12 months – the sharpest drop for more than 30 years.

House-swappers first of all need to register with a website or agency and supply photographs of where they live – and indicate whether their largesse will extend to leaving their home-exchange partner the keys to the family car.

Ed Kushins of HomeExchange.com – which with nearly 40,000 homes is one of the largest such websites – pointed out: ‘”Costly hotels are out. Apartments and houses and are in. They’re more appealing, more comfortable and less costly.”

A note of caution, though. Some 24% of holidaymakers who have tried the practice say they returned to find their homes had suffered some kind of damage in their absence.

Lloyds TSB Insurance, which carried out the survey, said vacationers tempted by the trend should register only with reliable house-swapping websites. And it said its research highlighted the need for householders to ensure their properties had adequate cover beforehand.

Paul Spillane, in charge of the insurers’ home claims department, said: “House-swapping could become one of the trends of 2011 as it is the sort of break that caters for so many different tastes.”

Of course, rather than simply swap homes, you may want to buy a property in Italy. Our picks this week are homes to renovate and seaside homes in Italy.