Buying a home in Italy
Jul 21st, 2007, 02:20 PM
#1
Original Poster
Join Date: May 2006
Posts: 768
Likes: 0
Received 0 Likes
on
0 Posts
Buying a home in Italy
I this comes up often.
We have seen a few posting for apartments that are not terribly expensive. Let's say terribly small apartments for around 40,000Euro.
Does anyone on this website have personal experience with buying real estate in Italy?
What levels of mortgages are available to non-occupant foreigners?
We have read that there is a non-occupant transfer tax of about 11%. Has anyone been thru this?
Does anything else come to mind?
Thanks
We have seen a few posting for apartments that are not terribly expensive. Let's say terribly small apartments for around 40,000Euro.
Does anyone on this website have personal experience with buying real estate in Italy?
What levels of mortgages are available to non-occupant foreigners?
We have read that there is a non-occupant transfer tax of about 11%. Has anyone been thru this?
Does anything else come to mind?
Thanks
Jul 21st, 2007, 06:49 PM
#3
Join Date: Jan 2003
Posts: 3,872
Likes: 0
Received 0 Likes
on
0 Posts
Jul 21st, 2007, 08:16 PM
#4
Just where are those 40,000 euro apartments? Are they turn-key, or are you looking at extensive renovations?
Mortgages are uncommon, even for Italians. I think you'd be better off finding the funds at home (equity loan on other property, perhaps). There may be various taxes depending on the locality.
Mortgages are uncommon, even for Italians. I think you'd be better off finding the funds at home (equity loan on other property, perhaps). There may be various taxes depending on the locality.
Jul 21st, 2007, 08:40 PM
#5
Join Date: Mar 2007
Posts: 2,285
Likes: 0
Received 0 Likes
on
0 Posts
There are lots of good books to guide you on this issue. See your library or bookstore or Amazon.
Some books (like Restoring a Home in Italy) make it sound pretty fabulous.
Rome real estate prices are about as high as New York. I've looked (salivated over) a lot of real estate in Italy. Prices seem to me to be a bit higher than in France. The price range acrosss the Italian peninsula can be as great as that between San Francisco and Des Moines, so ... the first thing, as always, is to know where you want to live. Climate, region, town or country, what conveniences do you need, do you speak Italian, what kind of town will suit you?
As for mortgages, there are opportunities for financing in some areas, on certain properties, generally meaning restoration of old buildings of character, especially in places where population is in decline or where there is a lot of property in need of rescue. Or there was ,,, these things are subject to change.
Some books (like Restoring a Home in Italy) make it sound pretty fabulous.
Rome real estate prices are about as high as New York. I've looked (salivated over) a lot of real estate in Italy. Prices seem to me to be a bit higher than in France. The price range acrosss the Italian peninsula can be as great as that between San Francisco and Des Moines, so ... the first thing, as always, is to know where you want to live. Climate, region, town or country, what conveniences do you need, do you speak Italian, what kind of town will suit you?
As for mortgages, there are opportunities for financing in some areas, on certain properties, generally meaning restoration of old buildings of character, especially in places where population is in decline or where there is a lot of property in need of rescue. Or there was ,,, these things are subject to change.
Jul 22nd, 2007, 07:32 AM
#7
Original Poster
Join Date: May 2006
Posts: 768
Likes: 0
Received 0 Likes
on
0 Posts
Thanks everyone.
The 40,000euro apartments are finished as opposed to 'to be renovated'. However, these apartments are not in any of the main cities or main tourist towns. From looking at photos, these apartments were 'done' 30 or 40 years ago.
The 40,000euro apartments are finished as opposed to 'to be renovated'. However, these apartments are not in any of the main cities or main tourist towns. From looking at photos, these apartments were 'done' 30 or 40 years ago.
Jul 22nd, 2007, 07:48 AM
#8
Join Date: Mar 2007
Posts: 2,285
Likes: 0
Received 0 Likes
on
0 Posts
Red, as in your own home town, of course you wouldn't choose an apartment without knowing if you like the neighborhood! There are a lot of very beautiful apartments for sale in ITaly in old hamlets that have been completely rebuilt. Problem is, there's no town, just this group of 10-50 or so apartments and houses, all probably second homes. If this Borgo is just outside a real town, great. If not, it might feel a bit isolated, for me anyway.
There are properties available in towns of all kinds, from Assisi to Milan, Lecce to Venice. If I could do it (and I THINK I'd love to) I would spend a month in a town to see how I manage, then maybe three months or longer, and spend some of it checking out various places. Anyone wants a town (or neighborhood) whose social view is a good fit, with activities of interest, probably some restaurants, good services like hospital, etc. Then look for a place that makes it all seem worth the effort.
There are properties available in towns of all kinds, from Assisi to Milan, Lecce to Venice. If I could do it (and I THINK I'd love to) I would spend a month in a town to see how I manage, then maybe three months or longer, and spend some of it checking out various places. Anyone wants a town (or neighborhood) whose social view is a good fit, with activities of interest, probably some restaurants, good services like hospital, etc. Then look for a place that makes it all seem worth the effort.
Jul 22nd, 2007, 07:58 AM
#9
Join Date: Oct 2006
Posts: 895
Likes: 0
Received 0 Likes
on
0 Posts
If you want an apartment in a foreign country, you are going to look at how often you are going to use it, what you want out of it and are you going to retire there?
I bought a place in the French countryside and there is very little crime in here so that when people are known not to be home by locals, the place is not burgled. If you are in the middle of town, empty places get burgled, vandalised, or even squatters sitting in them. There is also the problem with mustiness if a place is unoccupied for months at a time, maybe burst pipes, etc.
If a place is very cheap there could be things wrong with it, like a bad area with lots of crime. You also need to check on neighbours, noise and so on. Also set up a bank account to pay your bills as in some countries they might just sell your place to pay a relatively small utilities bill.
An apartment ties you to that place whereas if you rent an apartment when wanted, there is no hassle, it's much cheaper, it's where you want and you guarantee a lot better place.
I bought a place in the French countryside and there is very little crime in here so that when people are known not to be home by locals, the place is not burgled. If you are in the middle of town, empty places get burgled, vandalised, or even squatters sitting in them. There is also the problem with mustiness if a place is unoccupied for months at a time, maybe burst pipes, etc.
If a place is very cheap there could be things wrong with it, like a bad area with lots of crime. You also need to check on neighbours, noise and so on. Also set up a bank account to pay your bills as in some countries they might just sell your place to pay a relatively small utilities bill.
An apartment ties you to that place whereas if you rent an apartment when wanted, there is no hassle, it's much cheaper, it's where you want and you guarantee a lot better place.
Jul 22nd, 2007, 08:14 AM
#10
Join Date: Jan 2005
Posts: 121
Likes: 0
Received 0 Likes
on
0 Posts
I think looking into the income tax implications, especially with IRS, also of purchasing and living outside the country. If anybody has any personal experience about what to do or not to do - it would be great to hear. Info on any places to get this info would also be appreciated. Thanks.
Jul 22nd, 2007, 08:26 AM
#11
Join Date: Apr 2006
Posts: 1,844
Likes: 0
Received 0 Likes
on
0 Posts
Thing that would make the most sense is to buy a property which can be rented.
That would mean working with a rental property management company.
It would also obviously make the most sense to have the property in an area popular with tourists.
Then you could reserve some time for when you visit and then the rest of the time, rent it out.
That's the kind of resource I'd be interested in, with links to agents who could help with the transaction as well as agents who rent the property out.
That would mean working with a rental property management company.
It would also obviously make the most sense to have the property in an area popular with tourists.
Then you could reserve some time for when you visit and then the rest of the time, rent it out.
That's the kind of resource I'd be interested in, with links to agents who could help with the transaction as well as agents who rent the property out.
Jul 22nd, 2007, 08:26 AM
#12
Join Date: Jan 2003
Posts: 4,702
Likes: 0
Received 0 Likes
on
0 Posts
Just be aware that you would have to be able to make a trip to Italy almost at a moments notice if seomthing were to occur in your apartment even if you have a company managing it. Also, after someone rents it for a week or 2 and if furniture needs to be repaired or replaced you would probably have to be there on site to do it.
Jul 22nd, 2007, 08:40 AM
#13
Over the past 2 years a friend and I came very close to purchasing a farmhouse that needed restoration, about 9 miles from Florence.
I did as someone above suggested to you, and bought two books on buying/restoring a home in Italy. They outline much of the process in detail, as do some of the on line sites.
I looked into financing both there and here (US). My local mortgage broker gave me leads --i.e., go to an international bank, vs. a US only or Italy only bank (I think he mentioned Citigroup or one of those banks with a global market).
I also found an Italian bank that would lend for property. However, you have a much larger down payment in Italy, or at least with this bank. Interest rate was ok.
For our project, it would have been more complicated because of the restoration, requiring hiring several different professionals (i.e., a geometra) and potentially restoring from a distance, though my friend was considering moving there to oversee it.
You do have to consider issues of inheritance and ownership. As I understand it there are specific rules about this in Italy designed to protect family members.
Also, as I understand it there's not the same type of multiple listing service for real estate as we have, in terms of looking at different properties.
My friend is still considering property but will buy an apartment such as you describe that is already restored but that is centrally located in a city or town. (I bought property in Hawaii instead since my family and I have business there and lived there previously.)
So, lots of research in where, what, and how, as well as reflection on what your goals are for buying would help, but the best advice I can give you is to take your time and realize it's a process and not to rush it. We were both glad we went through all the preliminaries. Basically, when the price reached past my threshold, mostly due to the rising Euro, I had to walk away.
I did as someone above suggested to you, and bought two books on buying/restoring a home in Italy. They outline much of the process in detail, as do some of the on line sites.
I looked into financing both there and here (US). My local mortgage broker gave me leads --i.e., go to an international bank, vs. a US only or Italy only bank (I think he mentioned Citigroup or one of those banks with a global market).
I also found an Italian bank that would lend for property. However, you have a much larger down payment in Italy, or at least with this bank. Interest rate was ok.
For our project, it would have been more complicated because of the restoration, requiring hiring several different professionals (i.e., a geometra) and potentially restoring from a distance, though my friend was considering moving there to oversee it.
You do have to consider issues of inheritance and ownership. As I understand it there are specific rules about this in Italy designed to protect family members.
Also, as I understand it there's not the same type of multiple listing service for real estate as we have, in terms of looking at different properties.
My friend is still considering property but will buy an apartment such as you describe that is already restored but that is centrally located in a city or town. (I bought property in Hawaii instead since my family and I have business there and lived there previously.)
So, lots of research in where, what, and how, as well as reflection on what your goals are for buying would help, but the best advice I can give you is to take your time and realize it's a process and not to rush it. We were both glad we went through all the preliminaries. Basically, when the price reached past my threshold, mostly due to the rising Euro, I had to walk away.
Jul 22nd, 2007, 01:20 PM
#14
Join Date: Mar 2007
Posts: 2,285
Likes: 0
Received 0 Likes
on
0 Posts
re: renting that property as a vacation apartment after you buy ...
In the tourism centers there are both good and bad (and excellent) managment companies for properties, and with the right management there is no reason one would have to run back and forth for any problem. You pay them to handle small issues, not just greet the renters and hand over keys.
People who see only the downside should never do it, it wouldn't be any fun for them. People who see only the upside are probably being naive and may have to learn expensively.
Smart folks like annw and her friend won't have too many unpleasant surprises and may have a great many happy days ...
A friend of mine owns a little house in a small town in Italy. For 20 years it was for summer only (a converted stone barn without heat) but now she's winterized it and rents it in the winter, and lives there herself over the summer. (Her tenant goes away in summer - a perfect synergy)
This house is my idea of near perfect: just inside the town walls, and up high with a couple of windows that overlook the valley. Down a narrow street you come to a gate, and inside is a small yard - formerly the little barnyard or paddock. A nice living room with windows onto the yard; a double=height artist's studio; a kitchen. Upstairs is a big bathroom and one xl loft bedroom, with a curtain that can be drawn to create separate sleeping spaces if there are guests.
Outside her gate you are ten steps from a bakery, 100 steps from the main square. It's pretty perfect - the feeling of being away, with a decent view, yet all the convenience and company of town. (Yes, I have fantasized about this a bit ...!)
In the tourism centers there are both good and bad (and excellent) managment companies for properties, and with the right management there is no reason one would have to run back and forth for any problem. You pay them to handle small issues, not just greet the renters and hand over keys.
People who see only the downside should never do it, it wouldn't be any fun for them. People who see only the upside are probably being naive and may have to learn expensively.
Smart folks like annw and her friend won't have too many unpleasant surprises and may have a great many happy days ...
A friend of mine owns a little house in a small town in Italy. For 20 years it was for summer only (a converted stone barn without heat) but now she's winterized it and rents it in the winter, and lives there herself over the summer. (Her tenant goes away in summer - a perfect synergy)
This house is my idea of near perfect: just inside the town walls, and up high with a couple of windows that overlook the valley. Down a narrow street you come to a gate, and inside is a small yard - formerly the little barnyard or paddock. A nice living room with windows onto the yard; a double=height artist's studio; a kitchen. Upstairs is a big bathroom and one xl loft bedroom, with a curtain that can be drawn to create separate sleeping spaces if there are guests.
Outside her gate you are ten steps from a bakery, 100 steps from the main square. It's pretty perfect - the feeling of being away, with a decent view, yet all the convenience and company of town. (Yes, I have fantasized about this a bit ...!)
Jul 22nd, 2007, 01:27 PM
#15
Join Date: Mar 2007
Posts: 2,285
Likes: 0
Received 0 Likes
on
0 Posts
One thing that hasn't been mentioned is that this is likely a poor time to buy real estate in Europe if you're spending dollars. If I were in the market, I'd hold off unless I had money I could afford to lose.
A property priced at 125,000 Euro in 2001 would have cost you about $100,000. Today something that price would be more than $165,000. This gap stings when comparing hotel bills from then and now, but is a bit gasp inducing when looking at buying real estate.
A property priced at 125,000 Euro in 2001 would have cost you about $100,000. Today something that price would be more than $165,000. This gap stings when comparing hotel bills from then and now, but is a bit gasp inducing when looking at buying real estate.
Jul 22nd, 2007, 01:56 PM
#16
Join Date: Sep 2004
Posts: 45,322
Likes: 0
Received 0 Likes
on
0 Posts
I am not sure about Italian inheritance laws for property owners that are US citizens but for Italian citizens when one spouse dies the remaining spouse inherites a portion of the property and the children the rest. For example if a couple has one child the remaining spouse retains 50% ownership and the child inherits 50%.
Not sure how it works when there is more than one child of the marriage. And again I have no idea how the laws pertain to citizens of other countries.
Not sure how it works when there is more than one child of the marriage. And again I have no idea how the laws pertain to citizens of other countries.
Jul 22nd, 2007, 08:03 PM
#17
Join Date: Apr 2006
Posts: 1,844
Likes: 0
Received 0 Likes
on
0 Posts
So are you saying that certain properties for sale may have ownership or title in dispute because there may be inheritance claims against them?
What about liabillity laws concerning renters?
Or insurance for fire, theft, vandalism?
Also how about repatriating any rental income and reporting to IRS, etc.?
What about liabillity laws concerning renters?
Or insurance for fire, theft, vandalism?
Also how about repatriating any rental income and reporting to IRS, etc.?
Jul 22nd, 2007, 10:52 PM
#18
Join Date: Sep 2004
Posts: 45,322
Likes: 0
Received 0 Likes
on
0 Posts
Hi scrb, were your questions addressed to me? If so I was referring to the fact that if a property owner dies the inheritance laws in Italy are different than in the US. The inheritance laws in France are different also. But again I don't know if the inheritance laws in Italy pertain only to Italian citizens or to anyone that owns property in Italy. If I were buying property in Italy I would certainly want to find out before making a purchase.
Insurance of course is available in Italy. I have three different Italian friends in Italy that are Insurance Brokers.
If a US citizens receives income from outside of the US one does have to declare that income to the IRS. I am not sure about income tax owed to the Italian government, as I recall there are some complicated laws (aren't all income tax laws complicated, lol).
There are municipal laws in Italy regarding renovations and remodeling. I believe even installing a/c is complicated. Italy is a country that loves red tape. Well the government does their citizens do not. Most Italians know how to get around the laws in most case, more so then the average US citizen.
Insurance of course is available in Italy. I have three different Italian friends in Italy that are Insurance Brokers.
If a US citizens receives income from outside of the US one does have to declare that income to the IRS. I am not sure about income tax owed to the Italian government, as I recall there are some complicated laws (aren't all income tax laws complicated, lol).
There are municipal laws in Italy regarding renovations and remodeling. I believe even installing a/c is complicated. Italy is a country that loves red tape. Well the government does their citizens do not. Most Italians know how to get around the laws in most case, more so then the average US citizen.
Jul 23rd, 2007, 02:08 AM
#19
Join Date: Jan 2003
Posts: 666
Likes: 0
Received 0 Likes
on
0 Posts
A correction to LoveItaly's comment:
<<
If a US citizens receives income from outside of the US one does have to declare that income to the IRS>>
US citizens have to report their GLOBAL income.... makes no difference to the IRS what country it comes from.
As of two years ago, US citizens must also declare all foreign bank accounts that have now, or at any time, more than $10,000 in them.
<<
If a US citizens receives income from outside of the US one does have to declare that income to the IRS>>
US citizens have to report their GLOBAL income.... makes no difference to the IRS what country it comes from.
As of two years ago, US citizens must also declare all foreign bank accounts that have now, or at any time, more than $10,000 in them.
