An Idiot's Guide To Buying A Home in Italy
1) CONSIDER DIFFERENT REGIONS Tuscany remains overseas buyers’ favourite part of Italy. Yet other areas such as Puglia, Sicily and Le Marche are far cheaper and also have breathtaking countryside and beaches. 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 45 into a weekend simply turns into a gruelling slog. By the time you are halfway through, chances are you will remember little of the first few. 2) SET A SENSIBLE BUDGET Thanks to its picturesque countryside and famous tourist hotspots such as Florence and Pisa, Tuscany will always be in demand – and a solid investment. Yet it isn’t cheap and a farmhouse in central Tuscany can cost the best part of US$750,000. But prices can drop 50% if you head to Garfagnana in northern Tuscany. Despite the global real estate crisis, don’t expect huge 40-50% discounts, with 10% being 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). 4) DON’T TRY TOO MUCH Frances Mayes’ bestseller Under The Tuscan Sun sparked a generation of foreign buyers into converting an Italian ruin into the perfect holiday hideaway. An enticing idea but prepared for the sheer graft and expense required. Top-to-bottom refurbishments can cost US$2,100 per sq m. Another blunder is to buy more property than you need. A sprawling five-bedroom house with an orchard, vineyard and 10 acres sounds idyllic but don’t forget the maintenance involved. 5) DON’T SKIP ON A SOLICITOR 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) KNOW THE PROCEDURE After a price is agreed the buyer makes a proposta irrevocabile di acquisto with a payment of some 5% to take the house off-sale for a fortnight. 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 about a third 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 double the deposit. The next stage is to sign the final deed of sale in a notary’s office, who examines all papers and lodges them with the Land Registry. The buyer pays the balance, usually by bank draft from an Italian bank. He will need to have obtained a fiscal code from tax authorities to apply for a bank account. 7) 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. Expect around 3% to the realtor, US$210-280/hour in legal fees, US$700-2,100 for a surveyor and US$2,800-7,000 for the notary. For new-builds, 4% VAT is payable if within a year and a half the buyer registers for Italian residency. Otherwise, 10%. For non-new-builds the buyer pays 3% of the cadastral value if residency is registered for within 18 months. Otherwise, 10% of cadastral value. Cadastral value is assigned by the Land Registry based on attributes such as floor area, number of rooms, etc. and is usually less than 50% of purchase price. 8) DON’T GET SHORT-CHANGED ON FOREIGN EXCHANGE In 2009 Pound-Euro values oscillated between a January low of £1/Euro 1.06 and a summer high of £1/Euro 1.19. 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 better rates than the typical bank and could save you £16,000 on a £400,000 deal. 9) THINK RENTAL 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 1.5 hours from the nearest international airport. In cities, bear in mind how close your property is to public transport as not all holidaymakers will have a car. Villas and apartments near a beach rent better and keep their investment value over time because of limits on additional building in areas near the coast. 10) HAVE A GO AT THE LINGO Cercare di parlare la lingua, as Italians would put it. Bear in mind that unlike the Netherlands, more than 7 in 10 Italians speak no English, among the lowest ratios on the continent. Don’t be afraid to come a cropper as your efforts, regardless of how ham-fisted, will be warmly received by Italians. The author writes for property for sale in Italy specialists Homes and Villas Abroad, who showcase 2,500 Italian properties. Her areas of expertise include Sicily properties and Calabria property. Disclaimer: Article submitters are solely responsible for the content of their articles. 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