Buying Property in Italy - Overview
- Low-cost flights have opened up Italy to visitors and property buyers
- Countryside, coast, mountains and cities – there’s a massive choice of Italy property
- There are many parts of Italy with very cheap properties
- Just because a property is expensive, do not think that it can’t make a great investment
Brits have been buying property in some parts of Italy for many decades but particularly since the boom of the 1960s. For most of this time, demand from the UK has been predominantly for property in the regions of Tuscany and neighbouring Umbria, with thousands of derelict farmhouses being renovated into some of Italy’s most desirable and expensive properties. Many Brits have ended up relocating permanently to this idyllic countryside.
Buying Property in Italy - Choice
These rural regions are still the dream of many overseas buyers of Italy property, but the proliferation of low-cost airlines to a host of regional Italian airports has not only opened up the rest of the country to more British visitors, but makes a property in Italy a viable holiday destination rather than a permanent lifestyle change.
Some of these ‘newly discovered’ regions of Italy offer a great choice of property at very reasonable prices, both restoration projects and habitable homes, including new-build property. Renovation costs are relatively cheap in Italy, meaning a renovation property in Italy is an excellent way to see a healthy return on your total investment.
Italy’s cities have history in abundance; the likes of Rome, Florence and Venice have been attracting tourists for centuries and continue to be some of the most culturally rich cities in the world. University towns and the commercial power of Milan and Turin provide another aspect of property ownership: investment in properties that provide short- or long-term rental returns from professional and academic tenants.
The ski resorts of the Alps and Apennines have often been considered ‘budget’ locations for winter sports enthusiasts but in this competitive market there is a constant need to upgrade facilities and provide good value for money. Many of these resorts now recognise the importance of year-round tourism and the need for amenities that bring in visitors during the summer months, a major consideration for property buyers relying on rental income.
Buying Property in Italy - Summary
With such a wealth of property in the countryside, on the coast, perched in the mountains and set in one of its historic cities, the overseas property buyer with an eye for buying property in Italy has never had this much choice to realise their dream.
Buying Property in Italy - The Property Market
Property prices in Italy are usually quoted in ‘euros per square metre’. Like any other property market, in Italy it is impossible to give a definitive guide to what prices should be in any given town or region – with great diversity in the type, age, size, condition and location of property it is very difficult to give an accurate ‘like for like’ comparison.
With such a range of landscapes, climate and culture throughout Italy, it is rather difficult to compare, say, a three-bedroom farmhouse in Le Marche with a three-bedroom farmhouse in Valle d’Aosta – the two areas are quite different and a home buyer is unlikely to ‘switch’ areas purely based on price.
Certain regions, or areas within regions, have long been popular with overseas property buyers, for example, Tuscany and Umbria, and prices will tend to be higher there compared to a similar property in a lesser known region. When buyers started to find themselves priced out of Tuscany property, they started looking to neighbouring Umbria and prices have risen dramatically there as a result. More recently, with Umbria property prices so high, Marche property has become popular.
With improved travel connections, other parts have been opened up to intrepid buyers of property in Italy. With low-cost airlines servicing previously remote corners of the country it becomes viable to have a holiday property in, for example, Apulia in the southeast, where property prices have traditionally been low but are now creeping upwards with the increased demand.
Overall, capital appreciation in the Italian property market has been steadily rising thanks to a sluggish stock market, and with demand from overseas property buyers in particular on the increase, a well-considered Italian home will continue to reap rewards for many years. As ever, efforts in research and taking expert advice will go a long way to ensuring that a home in Italy will be a happy and rewarding purchase.
Buying Property in Italy - Hotspots
- Apulia – the sunny and scenic southeast of Italy has been opened up thanks to regular low-cost flights to Bari and Brindisi. Property prices have been rising significantly but they are still competitive by Italian standards
- Tuscany – a perennial favourite. Though property prices are very high in some parts, there are cheaper areas if you look. The lifestyle and tourism means that whatever you spend, the area will always be a good long-term investment
- Umbria – prices are nearly on a par with Tuscany, but nevertheless the climate and landscape are as wonderful as ever – a terrific place to relocate or buy a holiday home. Tourism means letting potential is very good.
The Process of Buying Property in Italy
- While the amount of Italian red tape is well known, and bureaucracy tends to move rather slowly, buying a property in Italy is actually pretty straightforward – if somewhat time consuming
- Anyone wishing to buy an Italian property must first obtain a tax identification number (codice fiscale) from the Italian authorities
- There are then three main buying stages. The property buyer makes an offer, which commits him/her to buying the property at the given price. If the seller accepts, a deposit (usually 10%) is paid
- Both parties than sign a legally binding buying proposal (compromesso di vendita). This outlines the details of the transaction, including the scheduled completion date
- Should the seller withdraw, they must pay the property buyer double the value of the deposit. If the buyer pulls out, he/she loses the deposit
- On completion, both parties sign the final contract (rogito) in the presence of a notary, who then issues the deeds and informs the land registry to transfer ownership. The remainder of the balance, plus all taxes, must then be paid at this point
Buying Property in Italy - Fees & Taxes
- Property buyers should set aside around 15% of the purchase price to cover costs
- Stamp duty/land registration tax for non-residents varies from 10% of the declared price for urban property up to 17% for a rural property. Most properties are considered urban
- Residents or those intending to make a permanent move will pay 4% stamp duty
- VAT on new properties ranges from 10% to 20%, depending on whether the property is considered a ‘luxury home’. This is usually included in the price
- Reduced rates of 4% VAT are available for those who build their own property
- Estate agent’s fees are usually between 3% and 5% per cent, notary fees average around 3% and legal costs tend to amount to around 2% of the purchase price
- Local taxes (ICI) of between 0.4% and 0.7% also apply to anyone owning a property in Italy
Read our Italy Property Law article.
Key Facts
Health
The Italian health service is much better than its reputation. For the most part, Italy’s health service is cheap and pretty good, with English-speaking medical staff widely available. That said, many Brits still prefer to take out private health insurance when visiting
Travel
All major airports in Italy are very well connected, with year-round cheap flights available from most regional airports around the UK. Some destinations do not, however, have direct links with the UK as yet, but this could well change in the future
Buying Property in Italy - Top Tip
Be careful when considering taking out an Italian mortgage. Most are only offered on a repayment basis (interest-only mortgages like those common in the UK are not generally available) and are usually for 15 years, rather than the 25 years offered in Britain
Homes Overseas Property Club
Homes Overseas has joined forces with a collection of IFA specialists to form the Homes Overseas Property Club (HOPC), designed for existing and prospective overseas property homeowners.
The Club – which has access to international lawyers in no fewer than 43 different countries - has been set up in order to guide people through some of the various issues relating to buying and maintaining a property overseas. It offers advice on a range of topics, including financial, legal, insurance, taxation, property management and foreign currency matters.
For further information please telephone 0845 838 7142 or email info@homesoverseaspropertyclub.com
Read our articles about buying property in Italy:
well as our overseas news stories affecting the property market in Italy or view our range of property for sale in Italy.
Some information contained herein may have changed since it was first published. Homes Overseas strongly advises you to seek current legal and/or financial advise from a qualified professional.
