The prospect of slowly sipping a glass of Chianti while relaxing in your quaint and comfy farmhouse in the heart of wine country is tempting you to purchase a vacation home in Tuscany. But you’ve heard about the amount of red tape needed to do just about anything in this country. Simply getting a phone line takes patience and determination.
Getting cold feet about investing in Italian property is understandable. But in 20 years of real estate experience in Italy, I have come to the conclusion that an unfulfilled dream makes for years of regret. And, surprisingly, buying property in Italy isn’t all that complicated. Here are a few simple tips to follow if you are contemplating that purchase.
Do your research—and have fun at the same time
Your main goal is to find the right home for you. That’s the research. Whether you are from the US, Australia, Canada or the UK, you will find that real estate investment is treated quite similarly in Italy, so the only real difference between buying at home or in Italy is that it should be fun! So get out and explore as many shops, restaurants and neighborhoods as possible. Finding a location and a property that meets your needs is an experience that should be savored and enjoyed.
Understand legal and tax matters
In the US, title companies protect prospective buyers and check for any legal inconsistencies before a purchase. In Italy, it is the notary’s legal responsibility to do this for buyers. You will have to pay a notary to do title searches, check for liens on the property and uncover any other legal irregularities regarding the sale and ownership of the property. All buyers must pay a purchase tax, which can be quite expensive. As well, all property owners in Italy, whether residents or not, pay two annual taxes on the property owned. You are not required to pay tax on the income you earn in another country unless you declare residency in Italy, so I don’t recommend that foreign property owners become residents in Italy unless they plan to live and work in Italy full-time.
Know what to insure
You should insure your house against fire damage and third-party liability. Remember that you are insuring your home at replacement or repair value, not market value: they are two very differently priced things. Theft insurance is very expensive in Italy, so think twice about getting it, unless you are at increased risk.
Get help with renovations and permits
There are building codes in Italy, but anyone planning on buying a home that needs restoration, as most do in this country, should first makes friends with a competent architect or surveyor. Most restored, historical buildings come with a certificate of habitation, the Certificato di Abitabilità, which should give you some clue as to its level of compliance with Italian building codes. Nonetheless, always have your newly acquired architect friend take a look at all compliance documents before you buy. Do not go into big restoration projects under-funded, as they always seem to end up costing more than originally planned. Things can get tricky if you are renovating a historical residence complete with frescoes, original brick and marble. You will most likely need a permit from the local authority before you can start any work. The kind of permit will depend on the historical and architectural importance of the building and its site. Again, your best bet is have a trustworthy architect or surveyor take care of these matters for you, as all filing at the local authority must be handled by a qualified professional.
Go to the bank
Although it is not difficult to get a mortgage in Italy, it is a long and tedious bureaucratic process. You must be able to convince an Italian bank that you will be able to pay the loan based on your income earned in a foreign country—your home country. These things have become much easier than in past years, especially since the arrival of some foreign banks in the country. But consider working with a bank in your country. I may be old-fashioned, but I believe it is always better to borrow in the country and currency that you earn in.
Understand real estate commissions and fees
The legal system in Italy requires both buyer and seller to pay a real estate commission, generally 2 or 3 percent. In Italy, real estate agents are considered mediators, so once they get both parties to agree to a deal, they must be paid—before the completion of sale. Be sure to ask agents what their terms are before starting to work with them. Once you have singled out your dream house, get the agent to give you an approximation of the purchase costs and all relevant fees. Consider yourselves warned.