Brainstorming about buying a flat somewhere in Europe...
Jan 24th, 2012, 11:33 AM
#103
Why do you think you have fewer rights in property as a non-citizen? that's certainly not true in the UK or France.>>
the rights may not be any different, but one's knowledge of them, and ability to negotiate the system, may be very limited.
the rights may not be any different, but one's knowledge of them, and ability to negotiate the system, may be very limited.
Jan 24th, 2012, 12:06 PM
#104
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I didn't say fewer rights regarding property. I said fewer rights period. The right to live there indefinitely. The right to work. The right to all social service and all benefits. Etc. Etc.
Jan 24th, 2012, 12:31 PM
#105
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scrb,
Many Italians own residential property that they do not live in. They inherited it from family, sometimes more than one dwelling or plot of land. There has been no reason for them to sell it up until now because they weren't paying taxes on it. Now that they will be required to pay taxes on it, so they will sell whatever they don't need. If it has any affect on the rental market, it will be to lower prices for renters as well as more property becomes available generally.
Also, just so everybody knows in advance, buyers of property in Italy do not have the same rights as buyers of property do in many other countries. Much property in Italy is encumbered for various reasons. You may not always be able to sell it as you would property you own in countries with less complicated laws governing the buying and transfer of real property.
These laws may change, but until they are changed, hiring lawyers in Italy to sort out clear title to property can get very expensive, and it is a cost few buyers recoup unless they live in Italy for a very long time.
Many Italians own residential property that they do not live in. They inherited it from family, sometimes more than one dwelling or plot of land. There has been no reason for them to sell it up until now because they weren't paying taxes on it. Now that they will be required to pay taxes on it, so they will sell whatever they don't need. If it has any affect on the rental market, it will be to lower prices for renters as well as more property becomes available generally.
Also, just so everybody knows in advance, buyers of property in Italy do not have the same rights as buyers of property do in many other countries. Much property in Italy is encumbered for various reasons. You may not always be able to sell it as you would property you own in countries with less complicated laws governing the buying and transfer of real property.
These laws may change, but until they are changed, hiring lawyers in Italy to sort out clear title to property can get very expensive, and it is a cost few buyers recoup unless they live in Italy for a very long time.
Jan 24th, 2012, 01:32 PM
#106
I didn't say fewer rights regarding property. I said fewer rights period. The right to live there indefinitely. The right to work. The right to all social service and all benefits. Etc. Etc.>>
and even if these rights exist now, who is to say that they won't change?
Zeppole - you make some very good points; these and more can be difficult for a non-national to discover and understand, even if they speak the language very well, because they lack the knowledge that you can only acquire through living in a country for a long time.
and even if these rights exist now, who is to say that they won't change?
Zeppole - you make some very good points; these and more can be difficult for a non-national to discover and understand, even if they speak the language very well, because they lack the knowledge that you can only acquire through living in a country for a long time.
Jan 24th, 2012, 02:23 PM
#107
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Actually, I think US citizens could go to the UK and buy property and not get many surprises. When I considered living in Spain, it was pretty obvious to me that Spanish real estate agents were very used to dealing with buyers from the UK, and procedures for buying property were pretty straightforward.
There are areas of Tuscany and I suspect Venice where property has been acquired by Italians and clear titles and deeds have been established to make re-sale to Americans more in line with American expectations of a real estate purchase.
Even more important, foreign buyers regularly come into the US and UK real estate markets and purchase property and contracts are straightforward. I mean, the importance of past revolutions in these countries was to establish private property owner rights.
Italy, historically, has protected property in a different way, recognizing its value as family-shared wealth, or as part of a community. Individual, private property rights may not be paramount.
But my biggest concern for anybody thinking of entering into contracts for European property at the moment, whether permanently or even temporarily, is the tremendously uncertain future of the euro currency. Very large corporations are horrified by the thought of rewriting complex contracts and sorting out ownership rights if the euro currency should fail. Any "devaluation" of value will not only affect exchange rates, it will affect the paper value of everything. There is not a single authoritative source to be found who can reassure the world that everything is sure to be all right, and the euro will survive.
So entering into expensive contracts, unless you have money to burn, is inadvisable until the picture is much, much clearer -- and anybody who doesn't really follow what is happening in the euro-zone should not be sinking money into it that they cannot cheerfully afford to lose, should it come to that.
There are areas of Tuscany and I suspect Venice where property has been acquired by Italians and clear titles and deeds have been established to make re-sale to Americans more in line with American expectations of a real estate purchase.
Even more important, foreign buyers regularly come into the US and UK real estate markets and purchase property and contracts are straightforward. I mean, the importance of past revolutions in these countries was to establish private property owner rights.
Italy, historically, has protected property in a different way, recognizing its value as family-shared wealth, or as part of a community. Individual, private property rights may not be paramount.
But my biggest concern for anybody thinking of entering into contracts for European property at the moment, whether permanently or even temporarily, is the tremendously uncertain future of the euro currency. Very large corporations are horrified by the thought of rewriting complex contracts and sorting out ownership rights if the euro currency should fail. Any "devaluation" of value will not only affect exchange rates, it will affect the paper value of everything. There is not a single authoritative source to be found who can reassure the world that everything is sure to be all right, and the euro will survive.
So entering into expensive contracts, unless you have money to burn, is inadvisable until the picture is much, much clearer -- and anybody who doesn't really follow what is happening in the euro-zone should not be sinking money into it that they cannot cheerfully afford to lose, should it come to that.
Jan 24th, 2012, 02:31 PM
#108
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PS annhg,
You wrote: "and even if these rights exist now, who is to say that they won't change?"
I'm afraid if that is the criterion for picking a "safe" place for one's future, then we are all doomed to country-hopping and, despite all the euros troubles, I am glad I hopped to a country whose president said just the other day he would not participate in financial reforms that created a new "law of the jungle" .
You wrote: "and even if these rights exist now, who is to say that they won't change?"
I'm afraid if that is the criterion for picking a "safe" place for one's future, then we are all doomed to country-hopping and, despite all the euros troubles, I am glad I hopped to a country whose president said just the other day he would not participate in financial reforms that created a new "law of the jungle" .
Dec 30th, 2012, 02:31 AM
#111
You wrote: "and even if these rights exist now, who is to say that they won't change?"
I'm afraid if that is the criterion for picking a "safe" place for one's future, then we are all doomed to country-hopping and, despite all the euros troubles, I am glad I hopped to a country whose president said just the other day he would not participate in financial reforms that created a new "law of the jungle" .>>
France is in the process of introducing new laws which will mean that 2nd home owners [including non-resident ones] will have to pay social security contributions on top of their taxes on any profit they make; furthermore because of the wording, it is highly likely that these contributions will not count as taxation and so will not qualify for tax relief in the UK as taxes paid overseas normally do. A similar rule is going to apply to CGT payable upon sale.
caveat emptor, especially abroad.
I'm afraid if that is the criterion for picking a "safe" place for one's future, then we are all doomed to country-hopping and, despite all the euros troubles, I am glad I hopped to a country whose president said just the other day he would not participate in financial reforms that created a new "law of the jungle" .>>
France is in the process of introducing new laws which will mean that 2nd home owners [including non-resident ones] will have to pay social security contributions on top of their taxes on any profit they make; furthermore because of the wording, it is highly likely that these contributions will not count as taxation and so will not qualify for tax relief in the UK as taxes paid overseas normally do. A similar rule is going to apply to CGT payable upon sale.
caveat emptor, especially abroad.
Dec 30th, 2012, 02:40 AM
#113
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Just spent two weeks in Cyprus and because of the economy there there are TONS of reasonable property there! My kids were begging my hubs and I to go look at. 30,000 USD one bedroom condo with pool in a complex while I was impressed with a 200,000 USD villa with pool and 3 bedrooms/2bath near the ocean!
Dec 30th, 2012, 02:53 AM
#114
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"France is in the process of introducing new laws which will mean that 2nd home owners [including non-resident ones] will have to pay social security contributions on top of their taxes on any profit they make;"
No. It has nothing to do with social security. They'll be taxed 2% if they make a profit of more than €50.000 up to 6% if they make a profit of more than €250.000.
No. It has nothing to do with social security. They'll be taxed 2% if they make a profit of more than €50.000 up to 6% if they make a profit of more than €250.000.
Dec 30th, 2012, 03:04 AM
#115
From 1 January 2012 the French social charges are also applicable to non residents who let their French property unfurnished. The rate of income tax applying is now 35.5%. There are different methods of calculating property income tax, which depend upon the specific facts of each case (including whether the property is being let furnished or unfurnished).>>
et voila!
pv - what you are referring to i think is the CGT change, payable upon sale. the introduction of the requirement on foreign home owners to make social security contributions from their RENTAL income is what produces the double taxation problem - if it is not described as a tax, UK tax payers will not get relief on it and will still have to pay UK take on the income as if the contribution had not been made.
this problem was highlighted on the BBC Radio 4 Money programme yesterday, which is usually pretty reliable.
at the very least anyone contemplating buying a 2nd home in France should make themselves very conversant with the potential tax problems.
et voila!
pv - what you are referring to i think is the CGT change, payable upon sale. the introduction of the requirement on foreign home owners to make social security contributions from their RENTAL income is what produces the double taxation problem - if it is not described as a tax, UK tax payers will not get relief on it and will still have to pay UK take on the income as if the contribution had not been made.
this problem was highlighted on the BBC Radio 4 Money programme yesterday, which is usually pretty reliable.
at the very least anyone contemplating buying a 2nd home in France should make themselves very conversant with the potential tax problems.
Dec 30th, 2013, 01:44 PM
#118
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Zeppole, why do you say that up until now there were no property taxes in Italy? Until 2012, there was the ICI, which was a property tax. Berlusconi promised to abolish it during an election campaign, and won the election largely on that basis. Then the ICI was replaced with the IMU, which is different from the ICI only in that it has a different name, and that, at least for the moment, you don't have to pay it on your primary residence. (With the ICI, starting sometime in the past ten years, you paid a lower tax rate on your primary residence, which resulted in a fair number of fictitious divorces so that a couple could have two primary residences between them.)
The IMU falls rather heavily on second houses compared to the ICI, so that may cause some people to sell second houses, but it may just cause more "divorces". I've also heard of adult children leaving the family nest to live in the summer home, at least on paper. It would take a lot to make an Italian give up his summer home. In any case, the IMU has been in effect now for a year, and I haven't seen any great sell-off. I would expect that what would mostly get sold is in the category of grandma's uninhabited farmhouse with no central heating; the only market for these sorts of houses is that northern Europeans often buy them and fix them up. There's almost no demand for them in the domestic market, and most Italians who own such properties have no expectations of being able to sell them.
The housing market in Italy has been depressed for at least four years now, but there was never a big housing bubble here as there was in Spain, so it's more a stagnation of sales rather than a collapse in value. It's very hard right now to get a mortgage, so sellers may be eager to close a sale with someone paying cash.
In 2014, there were be some reconfiguring of property taxes, with a new service tax probably making up lost revenue because of the abolition of the IMU sulla prima casa. It's hard to say what effect this will have on real estate prices, but the service taxes should hit non-primary residences less heavily, because they don't use services such as trash collection when they're standing empty. We have a second house, and we pay much less for services on that house than for our primary residence.
The government sale of properties, if it ever comes off, would not affect the sales of small apartments. It's mostly large buildings, offices, former convents, former barracks, and the like, that are owned by the government.
The IMU falls rather heavily on second houses compared to the ICI, so that may cause some people to sell second houses, but it may just cause more "divorces". I've also heard of adult children leaving the family nest to live in the summer home, at least on paper. It would take a lot to make an Italian give up his summer home. In any case, the IMU has been in effect now for a year, and I haven't seen any great sell-off. I would expect that what would mostly get sold is in the category of grandma's uninhabited farmhouse with no central heating; the only market for these sorts of houses is that northern Europeans often buy them and fix them up. There's almost no demand for them in the domestic market, and most Italians who own such properties have no expectations of being able to sell them.
The housing market in Italy has been depressed for at least four years now, but there was never a big housing bubble here as there was in Spain, so it's more a stagnation of sales rather than a collapse in value. It's very hard right now to get a mortgage, so sellers may be eager to close a sale with someone paying cash.
In 2014, there were be some reconfiguring of property taxes, with a new service tax probably making up lost revenue because of the abolition of the IMU sulla prima casa. It's hard to say what effect this will have on real estate prices, but the service taxes should hit non-primary residences less heavily, because they don't use services such as trash collection when they're standing empty. We have a second house, and we pay much less for services on that house than for our primary residence.
The government sale of properties, if it ever comes off, would not affect the sales of small apartments. It's mostly large buildings, offices, former convents, former barracks, and the like, that are owned by the government.
Dec 30th, 2013, 01:54 PM
#119
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[[ Italy, historically, has protected property in a different way, recognizing its value as family-shared wealth, or as part of a community. Individual, private property rights may not be paramount. ]]
This is pure fantasy. If you buy a house in Italy, it's your house, not your family's house or the town's house.
There's a house right in the most beautiful part of our town that sticks out like a sore thumb. Nowadays, zoning laws would prevent an owner from putting up plastic shutters and aluminum fences on a historical property in a historic zone. However, this was done before zoning laws, and no matter how much our town would love to have a law that gave them some right to force the owner to replace the shutters and tear down the fence, with a financial incentive thrown in, they've been able to do nothing about it. Private property rights are indeed paramount!
This is pure fantasy. If you buy a house in Italy, it's your house, not your family's house or the town's house.
There's a house right in the most beautiful part of our town that sticks out like a sore thumb. Nowadays, zoning laws would prevent an owner from putting up plastic shutters and aluminum fences on a historical property in a historic zone. However, this was done before zoning laws, and no matter how much our town would love to have a law that gave them some right to force the owner to replace the shutters and tear down the fence, with a financial incentive thrown in, they've been able to do nothing about it. Private property rights are indeed paramount!
Dec 30th, 2013, 02:09 PM
#120
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Nutella, I live in Le Marche, one of Italy's most beautiful regions, with, until recently, very little international tourism. Tourism is just beginning to take off in recent years. In Le Marche, you can get a fairly nice apartment, in the center of towns or small cities, for the amount of money you want to spend. As I said above, there never was a real housing bubble here, and although real estate sales have been slow for the last four years, it's mostly because it's very hard to get mortgages, and because unemployment is high. If you pay cash, I don't think you're taking a big risk. I wouldn't buy any property with the hope of capital gains, but it you buy it to live in it and enjoy it, and rent it to tourists, I don't think you're taking a big risk.
Any place along the Adriatic coast has easy access to airports in Bologna and Falconara (AOI, sometimes wrongly called Ancona). Some of the towns are basically beach towns, but places like Fano and Senigallia are lively and interesting year round and have fairly good transportation to places in the foothills inland.
If you don't want to buy in a coastal town, Urbino is a Renaissance jewel, although not the very easiest place to get to by public transportation; it would require a train to Pesaro or Fano and then a bus to Urbino. The buses do run fairly often all day.
Fabriano is another very nice town, on the main train line between Rome and Ancona, so accessible to the local airport in Falconara as well as the airports in Rome; the local economy in Fabriano is rather depressed just now because of factory closings, but that may mean you could snap up a bargain.
Ascoli Piceno is another very beautiful town, with train connections to the coast, and a bus connection to Fiumicino airport in Rome. A fairly new bus service connects Ascoli to the airport in Falconara, but I don't know if you can count on the service to be successful just yet.
There are many, many other towns in the foothills and in the mountains that are unbelievably charming, but most of them have rather spotty bus connections to airports and major train stations.
Any place along the Adriatic coast has easy access to airports in Bologna and Falconara (AOI, sometimes wrongly called Ancona). Some of the towns are basically beach towns, but places like Fano and Senigallia are lively and interesting year round and have fairly good transportation to places in the foothills inland.
If you don't want to buy in a coastal town, Urbino is a Renaissance jewel, although not the very easiest place to get to by public transportation; it would require a train to Pesaro or Fano and then a bus to Urbino. The buses do run fairly often all day.
Fabriano is another very nice town, on the main train line between Rome and Ancona, so accessible to the local airport in Falconara as well as the airports in Rome; the local economy in Fabriano is rather depressed just now because of factory closings, but that may mean you could snap up a bargain.
Ascoli Piceno is another very beautiful town, with train connections to the coast, and a bus connection to Fiumicino airport in Rome. A fairly new bus service connects Ascoli to the airport in Falconara, but I don't know if you can count on the service to be successful just yet.
There are many, many other towns in the foothills and in the mountains that are unbelievably charming, but most of them have rather spotty bus connections to airports and major train stations.
