1) THINK ABOUT DIFFERENT AREAS
We find that Tuscany remains overseas buyers’ favourite part of Italy. Yet other areas such as Apulia, Calabria and Abruzzo are far cheaper and also have the same heady mix of stupendous landscapes and beaches. Try various locations to see what areas you like best. And think about area first before looking at properties.
Ensure you are reasonably close to local amenities, unless you deliberately want to be in splendid isolation. And when it comes to visiting potential homes, there is such a thing as too many. Trying to cram 30 into a weekend simply turns into an arduous marathon. By the time you are halfway through, chances are you will have forgotten most of what you saw earlier.
2) GET REAL ON PRICES
Do some homework before starting looking for properties and consider all the related cost to ensure you stay within your budget.
Italian prices have not had the freefall of some other countries, so expect discounts of around 10%. But everything is relative... if you buy a rustic building for restoration for €70,000 you might expect a discount of just a couple of thousand.
3) DON’T OVERBURDEN YOURSELF
Many investors like the idea of converting a run-down rustic into the perfect holiday hideaway.
This is great and is do-able if you do not expect to do everything by yourself.
Ensure you have a good surveyor (geometra) or architect to assist you.
Agree from the start who will project-manage. The type of restoration you have in mind. And check whether your budget is realistic.
Restoration can cost up to €1,800 per sq m (approximately €167 per square ft).
Another blunder is to buy more property than you need. A large five-bedroom house with pool and five acres sounds dreamy but don’t fail to consider the upkeep required.
4) HIRE 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 before you commit to buy a property.
5) LEARN HOW THE SYSTEM WORKS
After a price is agreed the purchaser submits an irrevocable proposal to buy with a down-payment of some 5% to take the house off-sale.
If the purchaser’s surveyor and/or lawyer are happy with things so far, both sides sign a preliminary sales contract, in which they both confirm on a completion schedule. A further payment is paid, taking the buyer's total down-payment to 25%-30% of total purchase price.
Defaulting carries serious repercussions. The buyer may forfeit all monies paid while the seller, if at fault, may have to pay back twice the deposit.
The final stage is to sign the final deed of sale in front of a notary, who scrutinises all documents, carries out all checks such as titles, ownership and register the final deed with the Land Registry Office. The notary also pays property taxes on behalf of the buyer.
The buyer pays the balance, usually by bank draft from an Italian bank.
6) CONSIDER EXTRA EXPENSES
Budget for fees, commissions and taxes to typically mean around 12%-15% extra on the price of a newly constructed home and about 7%-10% on non-newbuilds.
Note that for low-value properties this percentage will be higher because of the presence of fixed costs such as notary fees, etc.
Expect around 3% to the estate agent, €150-€200/hour in legal fees, €500-€1,500 for a surveyor and €2,000-€5,000 for the notary.
On new-builds, there is 4% VAT if within 18 months you register for official Italian residency – a relatively straightforward process. Otherwise, 10%. For older properties 3% of the cadastral value is charged if the buyer takes out residency within a year and a half. Failing which, the charge goes up to 10% of cadastral value.
Cadastral value is a unique value for each property and it is decided by the Land Registry based on factors such as year of building, floor area, number of rooms, etc. and is far less than the property price.
7) DON’T BUY CURRENCY FROM A BANK
Over the course of 2009 Pound-Euro values oscillated 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 have more impressive rates than the typical bank and could mean a £30,000 difference on a £750,000 transaction.
8) MAXIMISE RENTAL POTENTIAL
Will your property primarily be a holiday/retirement home or do you intend to rent it out at some stage? If so, proximity to transport hubs is vital. Aim for a maximum 90 minutes from the closest 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 always have superb rental potential and maintain investment value over time because of tough laws on new construction in these zones.
Ski resort apartments are also very attractive and in high demand.
9) WHEN IN ROME…
Unfortunately unlike parts of Northern Europe, fewer than 3 in 10 Italians know English, among the lowest figures in the EU.
So once you have your house in Italy try to take some lessons and to learn some basic Italian to get by.
Don’t be afraid to come a cropper as your attempts, regardless of how rudimentary, will endear you to Italians.
10) ENJOY
Buying a house in a different country can be a very enjoyable experience from the start.
Rather than you spending valuable time scouring Italy for the right property and then having to negotiate a complex and unfamiliar legal system on your own, The Propert Organiser’s team of experts will handle every single aspect of your purchase for you. At no extra cost whatsoever.
Our commitment to providing you the utmost in client personal care will be evident from our first consultation to find out exactly what sort of property you require–anywhere in Italy.
As well as finding it for you, we will take care of everything else too–from handling all the subsequent paperwork to finding you a surveyor and opening an Italian bank account for you.
Call us now on +44 20 7745 7200 or email us at info@propertyorganiser.co.uk
