If you have always dreamt of purchasing a house in Italy, you may have started looking at real estate listings, imagining your new life in the Bel Paese. However, many potential buyers, especially foreigners, feel disoriented when they approach the Italian real estate market for the first time. We at Italian Real Estate Lawyers are here to help you overcome any challenges and avoid any potential financial losses. This article will describe the most frequent pitfalls that buyers often encounter and the most common mistakes to avoid when purchasing a property in Italy. In addition to this, the article will outline a few recommendations in order for you to fulfil your dream of purchasing a property in Italy.

The first mistake that many people make is overlooking investment property guidelines. Without an understanding of the real estate market, many assume that housing prices in Italy are constantly on the rise as in the U.S. However, it is worth pointing out that real estate prices in Italy often remain stable for many years. In order to make an informed decision you can research statistical data regarding the area where you intend to purchase a property. The website of the National Institute of Statistics (Istat), for example, is an excellent source which provides extensive analyses and publications on a wide variety of topics, such as demographics, urbanism, economy, education and any other relevant factors related to a specific area in Italy. Another useful website is the one of the Agenzia delle Entrate (Revenue Agency), which publishes news about real estate investments. Finally, we also recommend you analyze and compare selling prices by viewing real estate listings posted online. By doing this, you will become more familiar with the range of prices which are offered in relation to the property’s characteristics, such as square footage, location, condition and amenities.

The second most common mistake that people make is choosing the wrong real estate agency. It is advisable for potential buyers to check if the real estate agency offering the housing listings is legit, reliable and reputable. Regrettably, it is not uncommon to find fraudulent real estate agents. The best piece of advice we can offer is to check online reviews about real estate agencies which are located in the area of your interest. On the other hand, if you choose a property which is owned by a private seller, you will not need a real estate agency and thus you will save money on the real estate agent’s commission fee. However, as a downside, you will need to communicate directly with the seller, unless you have a real estate lawyer by your side. Thus, choosing the right real estate professionals is a pivotal step in the journey towards purchasing a house.

The third most common mistake is failing to carry out due diligence and overlooking residency requirements. The current owner may have debts or an ongoing mortgage; on the other hand, if there is a lien on the property, the ownership rights might be limited. In addition to this, you need to verify the property’s status from both an urbanistic and cadastral point of view. In fact, there are properties which cannot be used to reside or to live in. This is the case for apartments which can only be used as office spaces, for instance. Similarly, when buying a plot of land, you will find that there are various types; some plots of land are destined to agricultural purposes only, for example, and thus do not allow construction works. Therefore, it is highly advisable to reach out to a real estate lawyer to check the status of the property or the plot you are interested in in order to avoid any unpleasant surprises.

The fourth mistake that many buyers make is overlooking additional purchasing costs and taxes. As a matter of fact, we strongly advise to take into consideration extra fees and to calculate them in advance. Please bear in mind that if you do not pay taxes, you will risk paying heavy fines. When you purchase a house, you will need to pay several taxes, such as the notary fees, the real estate agency fees, VAT (if the house is new), the registration tax, the cadastral taxes, and the mortgage insurance, if applicable. Overall, these taxes are usually around 10 percent of the total purchase price, but the exact amount may vary depending on multiple factors. Furthermore, taxation will vary depending on whether you purchase the property from a private owner or a construction company. Taxes may also be calculated depending on the region in Italy where you purchase a property. Finally, you should also consider after-sale expenses, such as the ones related to renovation works, furniture, utilities and other fees we outlined in our previous article. Therefore, you should not underestimate additional expenses when you purchase a property in Italy.

As far as mortgages are concerned, it is important to study the advantages and disadvantages of mortgages featuring either fixed or variable rates. While the former involves a fixed, yet often higher amount of payment which does not change over time, the latter is unpredictable as it fluctuates depending on current interest rates. Although the variable option may be appealing, it can become extremely risky when interest rates rise to their highest. Therefore, it is advisable to consider your variable mortgage fees at their highest in order to make a fair prediction of your overall expenses. Secondly, we suggest you choose a mortgage that is spread over a limited period of time. In fact, a mortgage that is longer than 25 years may cause you to pay high interest rates. Thirdly, we recommend you choose a bank carefully based on the best mortgage they can offer. In fact, you can save a considerable amount of money by choosing the lowest and most competitive mortgage rates.

Finally, the fifth and final mistake is accepting a price without negotiating. In Italy, the common percentage of negotiability is around 10 percent and the margin varies depending on the property’s conditions. If a property remains unsold for several years, for instance, you may be able to negotiate the asking price. On the other hand, if the house features highly desirable characteristics in terms of square footage, position and amenities you might not be able to negotiate the price. When the property features an extremely quality-price ratio, the demand is higher and thus the seller may not be willing to sell it for less of its original value. Therefore, you should not be afraid of negotiating and you should also take all the time you need to evaluate both the advantages and the disadvantages of buying a specific property.

If you are thinking of purchasing a property in Italy and you would like to learn more about the potential mistakes one can make throughout the purchasing process, feel free to contact us at info@italianrealestatelawyers.com.

An increasing number of Americans have been flocking to Europe in recent years. Among the reasons are lower costs of living, affordable housing prices and a quieter and more relaxed lifestyle. According to a recent report drafted by Sotheby’s International Realty, a luxury real estate brand founded in 1976 which operates worldwide, France, Italy, Greece, Spain and Portugal are the top countries where international buyers tend to purchase property. This article will discuss the differences between the American and the European housing markets and it will examine the factors that have led many Americans to relocate to Europe and to Italy in particular.

As reported by the global real estate group Knight Frank, one of the world’s leading real estate consultancy firms, searches for French properties by US-based buyers increased by 27% in the first five months of 2022 compared to 2021. Italy and France are the most attractive countries for US buyers; however, Greece too witnessed a 40% increase in real estate transactions between April and June 2022 compared to 2021.The number of American citizens in the Iberian peninsula and in Portugal in particular, has increased by 45% compared to 2021, and Spain, which has the largest American population in Europe, has also witnessed a 13% increase in the number of citizens who have relocated to the country. Finally, according to a study about the role of investors in the European housing market, the Dutch economy has grown substantially since 2013 due to foreign direct investment coming from the U.S. The U.S. firm Blackstone, for instance, owns approximately 117,000 houses in the Netherlands. Therefore, it is clear that there is a growing trend in U.S. investment in Europe and in the housing market in particular.

Jerry Howard, the CEO of the National Association of Home Builders, has claimed that the U.S. are heading toward a housing recession because they are experiencing a supply shortage, which is leading to an increase in construction costs and consequently in housing prices. On the other hand, property prices in Europe are much more affordable compared to the U.S.  In fact, while property prices in the hottest U.S. markets jumped by 30% between early 2021 and the first quarter, prices in Paris and London rose just 5%, and in Florence, they dropped by 1.6%.

Some people argue that the most significant factor driving U.S. citizens to Europe is the plummeting value of the euro. However, there are other important factors, such as a range of tax incentives, the potential to work remotely and the desire to enjoy a quieter and more relaxed lifestyle. In this sense, Italy’s pleasant climate, its new digital nomad visa which was introduced recently, its cuisine and history have been contributing to driving up demand from house hunters overseas.

In addition to relatively cheap housing, culture and lifestyle, Italy is known for its variety of landscapes: Tuscany’s rolling hills, Apulia’s breathtaking beaches and Sicily’s historic towns, for instance, attract thousands of tourists each year. Italy is also the second most popular destination for American students studying abroad. Italian universities offer a wide variety of courses which are available in English and they also offer a number of cultural and academic exchange programs in other EU member states. In fact, Italy’s position at the heart of Europe is also strategic and you can travel to almost any capital in Europe in just a few hours.

It is also worth pointing out that many U.S. citizens are choosing to relocate to Italy or to purchase a holiday home there due to their ancestral ties. As a matter of fact, in recent years, hundreds of Americans with Italian ancestry have decided to pursue Italian citizenship by descent and to relocate to Italy. In fact, if you are a non-EU citizen, you do not need a visa to enter Italy but you will only be allowed to stay in the country for 90 days. On the other hand, if you are an Italian citizen, no limitations or time restrictions apply. It is worth mentioning that purchasing a property in Italy does not entitle non-EU citizens to stay in Italy beyond the 90-day limit.

Even though relocating to a country with a different language and culture might seem scary, adapting to a new lifestyle in a new property in Italy will soon become a thrilling journey if you get qualified and trusted advice when scouting Italy’s real estate market. 

If you are thinking of relocating to Europe and to Italy in particular, and you would like to learn more about Italy’s regions and get a greater insight into the wide variety of choices that Italy’s real estate market has to offer, feel free to contact us at info@italianrealestatelawyers.com.

No matter where in Italy you decide to live, you will find breathtaking landscapes, vibrant city centers and welcoming communities. One of the most interesting features of Italy is how vastly different its regions are from one another. For instance, living in the Northern region of Trentino Alto Adige is very different compared to living in Sicily, and climate is not the only reason. Indeed, Italy’s twenty regions vary greatly not only in terms of climate, landscape and customs and traditions, but also in terms of infrastructure, services, cost of living and property prices. While there is no “best” region to live in, when the time comes for you to decide where you should purchase your property, you will want to make sure that the property you want to buy meets all your needs. If you are taking your first steps in the Italian real estate market, please continue to read this article as it will provide you with some useful tips and pieces of advice to keep in mind when choosing the perfect region to move to.

While it is easy to fall in love with almost any part of Italy, a clear vision of your needs and preferences will allow you to narrow down your research and to focus only on the regions which are compatible with your desired lifestyle. Firstly, would you prefer to live in a dynamic metropolitan city, in a tranquil suburban neighborhood or in a dreamy countryside villa? Furthermore, will you be working remotely? If you plan on staying in Italy for a short period of time and you will be working remotely, for instance, your needs will be different compared to someone who is looking to retire to a quiet area in the long run. Additionally, you may want to enjoy the well-known Italian “Dolce Vita” by travelling to different regions. This option will require you to think about the most convenient means of transportation in order to travel around Italy, be it by public transportation such as trains, ferries and airplanes, or by car, motorbike or bicycle. In conclusion, how much you want to travel and how you plan on doing that will influence which part of Italy you choose to purchase a property.

If you would like to live in a dynamic metropolitan city then Lombardy, Lazio and Emilia Romagna are among the perfect regions to live in. These regions feature major cities such as Bergamo, Brescia, Milan, Bologna, Modena and Rome, which offer a good work-life balance. Indeed, not only do these cities offer many job opportunities and services, but they also offer excellent schools, universities, hospitals, cultural institutions, food festivals, shows, concerts and art exhibitions. Furthermore, big cities in these regions have excellent transportation links and they host several national and international airports. These positive aspects are reflected in the housing market prices, which are rather high, nevertheless, due to the fact that both locals and foreigners consider these areas to be very popular, purchasing a property here constitutes a valuable investment opportunity, especially if you are considering reselling your property, renting it or opening a B&B.

If you wish to live in one of the most glamorous and breathtaking regions in Italy, we highly recommend Tuscany. This area features internationally renowned cities such as Florence, Lucca and Pisa, which are rich in art, history and culture. Tuscan picturesque hilltop towns have attracted a multitude of foreigners over the past centuries and as a result, there are well-established expat communities in the area.  Arguably, a solid network can offer support to those individuals who decide to move abroad for the first time. Furthermore, the region is located in the central part of Italy, making it possible to reach both Northern and Southern regions fairly easily, either by car or by public transportation. For instance, you can jump on a train and visit many cities such as Venice, Turin, Bologna and Naples. It comes as no surprise then that Tuscany’s celebrity-like status results in its real estate market prices being on the higher end of the spectrum. However, this also means that purchasing a property in Tuscany is a great investment because it is likely to gain more value over time. Furthermore, if you would like to rent your property, there will always be thousands of tourists looking for accommodation. 

Finally, if you prefer an affordable yet dreamy location near the seaside, we suggest visiting Apulia (Puglia). The region is located in the south of Italy and it is famous for its stunning beaches and crystalline water (have you ever heard of the “Maldive del Salento”?). Apulia is the best option for those who wish to live at a slower pace while enjoying the region’s fascinating folklore and delicious traditional cuisine. Furthermore, its historical, artistic and cultural heritage is impressive and unique, and in recent years, Lecce’s baroque architecture and Otranto’s castle have attracted thousands of tourists worldwide. There are growing expat communities in Valle d’Itria and around Brindisi;  additionally, the region features two international airports in Brindisi and Bari, respectively. However, if you decide to live in Apulia you will need to rely on a car as your primary means of transportation. Together with slow internet connection in some remote areas, these factors might be potential issues to take into account, especially if you are planning on working in this region. Nevertheless, the low cost of living creates attractive investment opportunities for potential buyers since the quality-price ratio of properties is remarkable. Therefore, whether you are looking for a villa at the seaside or a traditional Trullo, we encourage you to consider scouting Puglia’s real estate market in order to find exceptional deals.

If you are interested in moving to any of these regions (or anywhere else in Italy!) and you would like some help in order to identify the perfect property for you, contact us for a free consultation at info@italianrealestatelawyers.com.

 

Many foreigners may have seen picturesque historical city centers as well as large metropolises across Italy either in person or through pictures, but many might not be familiar with less touristy areas or with remote and small villages in Italy. If you have travelled to Italy and fallen in love with the country, and you have decided to purchase a property there, you might already know which specific geographical area to choose. However, you might still need to consider which neighborhood specifically is a good match for your needs and desires, be it in the city center or in the suburbs. In order to guide you through this uneasy choice, this article will describe Italian suburbs and it will analyze their characteristics in comparison to U.S. suburbs. Finally, the article will outline the main advantages of living in a suburb in Italy, especially with regard to requalified areas.

Italian suburbs may not be what you expect. In fact, contrary to common beliefs, Italian peripheral city areas often lack independent houses; instead, there are many apartments in tall buildings and condominiums. On the other hand, villas and cottages can often be found in small towns and villages, far from major cities. This is the reason why spacious two-floors houses that possibly feature a cozy front porch, a flourishing backyard and even a wide pool are quite rare in these neighborhoods, unlike in other countries, such as the U.S. Thus, it is very likely that if you choose to purchase a property in the Italian suburbs, this will mean selecting a flat.

The conformation of Italian suburbs is linked to economic factors. In fact, city centers in Italy often feature more costly real estate properties than suburban areas since the latter are deemed less desirable. Conversely, U.S. houses may be very expensive even in suburbs, depending on the specific city. Nevertheless, it is worth noticing that Italian suburbs are still well-equipped with essential amenities, such as shops, markets, cafés and public transportation. On the contrary, U.S. suburbs are often purely residential and therefore people need to rely exclusively on their cars to reach stores and public spaces. Therefore, apartments located on the outskirts in Italy can be considered interesting investment opportunities, even if they are generally thought to be less appealing due to their lower economic value.

Choosing to purchase a property in the suburbs rather than in a city depends on your needs, lifestyle and preferences. Arguably, living in a safe neighborhood for minor children is among the most relevant factors when choosing an area for many families, for instance. Indeed, many families prefer to reside in quieter and greener areas where children can play outdoors, far from traffic and pollution. On the other hand, there are also many families who wish to live closer to city centers, which offer several recreational services, sport activities and useful amenities for both children and parents. Thus, in some cases families may favor a dynamic, active and social lifestyle over a tranquil and rural way of life.

However, the differences between cities and suburbs are not as sharp as you may think. In fact, it is worth noticing that many Italian municipalities are adhering to innovative initiatives that aim to bring new life to their suburbs. Specifically, city governments are encouraging construction works to build and renovate residential neighborhoods which are located just outside city centers. In particular, in many municipalities, construction companies are renovating unused properties and building new apartments, shopping centers and other facilities. This will attract aspiring buyers who are interested in investing in areas where the quality of life is higher.

Drawing from this, one of the first and most compelling examples of redeveloped areas in Italy is the case of Milan2, the well-known renovated neighborhood within the metropolitan area of Milan. In the seventies, the municipality agreed to face the city’s overpopulation by designing and building a new residential area in Segrate, in the north-east periphery of the city.

The neighborhood was embellished with beautiful architecture, functional apartments, numerous cycle lanes, pedestrian zones and parks. The success of Milano2 subverted the reputation of Milanese suburbs, offering an ideal alternative to people who preferred being close to the city center yet far from traffic, pollution and high criminal rates. Therefore, this case exemplifies how municipalities can work towards making peripheries not only more liveable, but also more attractive for potential investors.

Another important advantage of choosing to live in the suburbs is the proximity to the city center. In fact, renovated peripheral neighborhoods in Italy are usually relatively close to the city center. Thus, even if you live in a suburban area, you can reach the city center relatively easily either by using public transportation, or by cycling or walking. Therefore, you may choose to settle in a suburban district where you can enjoy a nice, comfortable and quiet home, whilst being close to the city center and not having to spend too much money on commuting. 

In conclusion, besides your personal taste and desires, when planning on purchasing a property in Italy it is definitely worth checking the local governments’ plans and projects for developing areas and suburbs as there might be newly built apartments and houses in affordable and modern areas which are worth investing in. Indeed, purchasing a property in Italy, either in a city center or in the suburbs, constitutes an invaluable opportunity, a life-long investment and a way to experience life in the country which is known for its “Dolce Vita”.

Please feel free to contact us at info@italianrealestatelawyers.com for support in selecting and purchasing the house of your dreams in Italy.

Italy has become one of the most sought-after countries by many foreigners and in recent years more and more people are looking to purchase a property in the country. With its incredible variety of landscapes, seas, lakes and mountains, big cities and small quaint towns, Italy has something to offer for each kind of lifestyle and pace of life. As reported by the Financial Times, foreign buyers are attracted to Italy’s real estate market mainly for two reasons: the possibility to work remotely and the desire to spend one’s retirement years in the Bel Paese, which is considered to be the perfect retreat. But can anyone purchase a property in Italy?

In accordance with article 16 of “Decreto Regio”, no.262 of March 16, 1942[1], foreign citizens can benefit from the civil rights which are normally granted to Italian citizens only if Italian citizens can benefit from the same rights in their counterparts’ countries. Therefore, please remember that if you do not reside in Italy, you can purchase a property there only if there is an international treaty between Italy and your country of origin that permits a condition of reciprocity. In other words, a foreigner can purchase a property in Italy only if an Italian citizen can purchase a property in the foreigner’s country. This condition is referred to as “reciprocità” (reciprocity). It is within the duties of the Italian Ministry of Foreign Affairs to verify reciprocity between Italy and other countries on a regular basis.

Reciprocity does not need to be verified for citizens of EU countries, EEA countries, stateless people or refugees who have lived in Italy for at least three years, and for resident aliens in Italy, i.e., foreign nationals who live in Italy on an official basis. These individuals also hold a permit of stay (“carta di soggiorno”), which may be issued for various purposes, such as to study, work or to join family members who are currently living in Italy. It is worth pointing out that being a legal resident in Italy might not be sufficient to purchase a property in Italy; in other words, you might not be able to do so unless there is a reciprocity agreement between Italy and your home country.

Another case in which reciprocity might not be verified involves countries with whom Italy has signed the so called “Accordi bilaterali in materia di promozione e protezione degli investimenti” – Bilateral Investment Treaties or BITs. These treaties establish the terms and conditions for private investment by nationals and companies of one state in another state. In particular, they set standards of conduct, which apply to governments’ treatment towards investors from other countries. They also set standards for fair and equal treatment and they guarantee protection from expropriation, free transfer of means and full protection and security. The list of countries with whom Italy has established conventions and treaties can be found at this link

Please note that if you are a U.S. citizen you can purchase a property in Italy without having to be a resident of Italy. With regards to this, it is important to bear in mind that owning a house does not automatically imply permanent residency in Italy. In other words, if you are not an Italian citizen and you are planning on purchasing a property in Italy, you will only be able to stay in Italy for the period of time allowed by your visa. If you are a U.S. citizen, you will be able to travel to 26 European member countries of the Schengen Area for a maximum of 90 days without applying for a visa. Nevertheless, there are visas which allow their holders to stay in Italy for prolonged periods of time, such as the Elective Residence Visa, which allows foreigners with high financial assets to stay in Italy for a year on the condition that they do not seek employment while living in Italy. One of the requirements to apply for the Elective Residence Visa is owning a property or renting one.

In conclusion, this article has sought to provide information regarding the condition of reciprocity that allows foreign citizens to purchase a property in Italy. If you would like further information or assistance, please feel free to contact our team at Italian Real Estate Lawyers at info@italianrealestatelawyers.com.

[1] The decree which regulates immigration and foreign citizens’ rights in Italy at the time of writing is Decreto Legislativo no.286 of July 25, 1998.

Despite the great variety of choice that Italy’s real estate market has to offer, if you have a very specific idea of what your future dream house should look like, there might be very few options you might like. However, if you do not like the idea of compromising then you may want to consider buying a plot of land and building your house from scratch. Although there are several requirements to consider before you decide to buy a plot of land and start building your house, you should not be afraid of Italian bureaucracy because if you do seek the help of the right professionals, you will ultimately build the house of your dreams. If you are wondering where and when to begin this journey, keep reading this article as we will guide you through the process of identifying and purchasing a plot of land for your future dream house.

WHAT TYPE OF LAND CAN YOU BUILD ON?

An essential aspect to be aware of before you start planning on purchasing a plot of land is that in Italy, each plot of land is assigned to a specific purpose, therefore, you need to look out for a plot of land for building purposes. The two key documents that can help you identify the type of land you are buying are the Piano Regolatore Generale (“general town development plan”), which lists the general purpose of each plot, and the piano particolareggiato, a complimentary document which regulates any form of public and private works. In order to build on the plot of land you have chosen, it should be defined as terreno edificabile (construction plot). Sometimes a plot might be listed as a construction plot but after analyzing the documentation you might realize that it is an agricultural plot or a plot intended for industrial construction. Therefore, the type of plot should always be verified in the development plans, which are available in the municipality where the plot of land is located. Checking the legal status of a plot is also crucial to verify that that it is not intended for public works or other purposes.

PURCHASE TAXES

It is worth pointing out that as far as taxes are concerned, if you are purchasing a plot of land you will need to pay a registration tax (payable only once), which is 9% of the value of the plot. If you are building your first house you will be entitled to a tax reduction and will need to pay 4% VAT on construction fees. More information about tax breaks for homebuyers can be found here.

SHOULD YOU PERFORM ANY ADDITIONAL CHECKS ON THE PLOT OF LAND?

While it is not mandatory, it is highly recommended that you ask an expert in the construction industry to make sure that your chosen plot comes with no hidden problems. In this case you may ask a geometra to help you; although you may not be familiar with this specific role as there is no direct equivalent of this profession abroad, a geometra’s responsibilities combine those of an architect and surveyor. The geometra’ vast knowledge and skills will allow you to understand whether there are any issues with the plot of land you would like to buy; the geometra will also provide you with advice regarding future construction works and the paperwork needed to buy the plot of land. The geometra will also be able to tell you if the area where you would like to build is at seismic or hydrogeological risk, and if there is access to water and electricity.

HOW MUCH FREEDOM WILL YOU HAVE IN DESIGNING YOUR HOUSE?

In Italy a house plan is designed by an architect, an engineer or a geometra and it needs to be approved in order to obtain a building permit. There are also other factors you must take into account prior to submitting the project to apply for a building permit, namely the minimum distances to be maintained between one property and another, the coverage ratio (i.e., the percentage of the lot that can be covered), the height that the building can reach and the distance the building must be from the road.  The application for a building permit must be submitted at the Sportello Unico dell’Edilizia of the municipality in which the property to be built is located. Once the building permit has been obtained, you will be able to start the construction phase.

If you would like more information about how to identify a suitable plot for your dream Italian house, please send us an email at info@italianrealestatelawyers.com.

 

Despite the housing market having been influenced heavily in recent years due to health emergency-related uncertainties and a near-total shutdown, it is fair to argue that since then prices have risen in proportion to the high level of demand. This is especially true in Italy where a combination of factors such as the country’s lifestyle, innovative tax rates and incentives have boosted the country’s housing market. In particular, recent studies argue that most of the requests in 2021 came mainly from overseas and particularly from U.S. citizens wishing to purchase property in what they define the “Bel Paese”. However, there has also been a surge in European buyers and more specifically in German, British and Dutch citizens. However, despite the rising prices Italy remains a very affordable country for foreign buyers. In fact, the median price for a house in Italy is much lower than in countries such as the U.S. and the U.K., to name a few. If you are thinking of purchasing a property in Italy and are wondering about issues such as the time that is necessary to purchase a property, as well as the purchasing process per se, this article will provide you with a few pieces of information to help you better understand the process. At the end of the article you will also find a podcast hosted by our attorney Marco Permunian and content creator and dual citizen expat Rafael Di Furia.

When comparing Italy’s “mercato immobiliare” (real estate market) to other real estate markets, such as the one in the U.S., there are different aspects to consider. Firstly, it is worth making a distinction between how long properties stay on the market, and how long it takes to finalize the purchasing process once you have identified the property you would like to buy. Perhaps one of the most important factors which influences timing, especially in the initial phases of the purchasing process, is the location. Although properties in rural areas tend to stay on the housing market longer and houses in cities tend to be sold much faster across both the U.S. and Italy, there is a remarkable difference between U.S. and Italy. Generally speaking, houses in the United States are sold faster than in Italy. However, there may also be cities and areas such as Milan or Lake Garda where a property might be taken off the market and sold within a few days. On the other hand, properties in rural areas tend to be sold within 2 or 3 years from the moment they are advertised on the market. A study run by “Ufficio Studi del Gruppo Tecnocasa”, arguably one of the largest real estate agencies in Italy, reports that during the second semester of 2021, properties in big cities were sold on average in 114 days. On the other hand, properties in big cities and surrounding provinces were sold within 144 days. This figure has decreased in 2022 to 110 and 131 respectively.

In particular, the most sought-after properties are the ones located in the cities of Milan and Bologna where properties are sold very quickly; in fact, Milan is on top of the list with properties being sold in only 57 days, followed by Bologna where properties are sold in 72 days.

On the other hand, as the American real estate company Zillow reported, U.S. properties generally spend about 25 days on the market before being sold, as opposed to 30 days in 2019. However, this figure needs to be added to 49, which is the number of days which are necessary on average to close on a home purchase. Thus, the total number of days needed to purchase a property in the U.S. is 74 days.

The purchasing process in Italy

Once a buyer has identified the property they would like to purchase, the first step is to present a formal purchase offer. It is always advisable to try to negotiate the final price as the asking price generally tends to be higher than the actual value of the property. If the seller accepts the offer the buyer can sign a preliminary contract of sale, which is legally binding. The preliminary contract also sets a date by which the final contract will need to be executed. At this stage of the process, the purchaser also pays a deposit of approximately 10%-20% of the property value. If the deposit is defined as “Caparra Confirmatoria” and the purchaser fails to fulfil certain obligations, the seller can then rescind the contract (“rescissione del contratto”) and the purchaser will automatically lose the entire deposit paid. If, on the other hand, the seller refuses or is no longer able to sell the property, then the purchaser will be legally entitled to a refund, which is double the amount of the deposit paid initially. At this point, if the buyer has the funds to purchase the property and pay in cash and there is no need to perform extensive due diligence on the property both parties can go ahead and sign the final contract of sale, which generally occurs a few weeks after the offer is accepted. There are cases in which it may take slightly longer, such as if the buyer is taking out a mortgage, if thorough due diligence needs to be carried out on the property, or if the property is occupied by tenants who need to move out within a given period of time.

Finally, the final contract of sale is signed by both parties in front of a Notary who is responsible for assessing all the legal paperwork related to the property. If all the documents are in order, the Notary will schedule a date in which both parties can sign the final deed of sale (in Italian “rogito”), which will then need to be registered at the “Agenzia delle Entrate” (the Italian revenue agency). The buyer becomes the property owner on the day of the closing when both parties sign the final deed before the notary. If the buyer cannot be present on the day of the closing, he or she can sign a power of attorney and allow an agent to sign the final deed of sale. 

We at Italian real estate lawyers can help you purchase the house of your dreams regardless of whether you would like to be present in Italy during the purchasing process or whether you reside abroad and cannot travel to Italy multiple times. Do not hesitate to contact us at info@italianrealestatelawyers.com.

Our team is fluent in English and Italian, and we would be happy to assist you in the process of purchasing your home in Italy!

If you own a holiday home in Italy or you plan to purchase one, you may be wondering if there are ways to optimize your investment returns when you are not spending time in your property. If this is the case, renting it short-term through Airbnb may be the right option for you. Undoubtedly, this comes with a number of obligations and rules, as well as with many questions. For instance, how does one turn a residential property into a rental property? What are the economic pros and cons of this? This article will answer these questions and provide you with information about the costs and the legal implications of renting a property on Airbnb.

How do you choose the perfect Airbnb investment property?

If you are thinking of purchasing a property in Italy, there are a few factors you may want to consider in order to make the best choice. While any type of property can be rented out through Airbnb, if you own a flat in a shared condominium you may want to check whether your neighbors and the administrator agree with your decision to rent. Although a lawsuit won in recent years established that individuals who live in other properties in a condominium cannot interfere with a neighbor’s decision to rent a property on Airbnb, having a good relationship with your neighbors will minimize the possibility of internal quarrels and avoid unpleasant issues. Therefore, before you purchase a flat in a shared building it might be a good idea to talk about your plans to your neighbors. It is also advisable to check that the property you would like to purchase is registered as a residential property as opposed to a commercial property.

The purchasing process

Once you have identified the property you would like to purchase and once due diligence has been carried out on the property, you can start the purchasing process. There will be a key figure in the process, i.e., the notary, who plays a fundamental role in Italian conveyance. In fact, any contract transferring the ownership of a property needs to be signed in front of a notary as well as countersigned by the notary in order to be legally binding. In addition, the notary is responsible for calculating the fees that are applicable to the transactions, and for collecting them from the parties.

Having said this, the purchasing process per se is divided in three stages. The first one entails presenting a formal purchase offer (“Proposta Irrevocabile di Acquisto”); if the seller accepts it, the buyer can sign a preliminary contract of sale (“Contratto Preliminare”), which is legally binding. The preliminary contract of sale defines the property that is being sold, the agreed final price, and it also states that the property complies with all legal and building standards, codes and fiscal laws. The preliminary contract of sale also affirms the seller’s commitment to sell the property on or before the agreed closing date. Although this contract does not have the effect of transferring the ownership of the property, it has several legal binding effects between parties. Finally, the third stage entails signing the Final Deed of Sale before a notary. If the buyer cannot attend the meeting, he or she can sign a Power of Attorney and delegate a third party to sign the Final Deed.

Economic benefits and taxation

If you decide to use Airbnb to rent out your property, you can offer potential guests both short- term and long-term agreements. However, it is worth keeping in mind that these two options have different implications in terms of taxation. Firstly, as per Italian law, short-term rental agreements (which cover periods lasting up to 30 days within a year) do not need to be registered at the “Agenzia Delle Entrate” (Italian Revenue Agency) and therefore there is less bureaucracy involved in this type of agreements. Nevertheless, a written contract must still be stipulated between the host and the guest.

As for taxation, if you rent your property as a private individual, the taxation regime which will apply to you will likely be the so-called cedolare secca (flat tax). While it will not allow you to deduct any additional expenses (such as cleaning fees or Airbnb taxes), it will allow you to have a preferential fixed rate of 21% applied exclusively to income generated by short-term rental. While this option is undoubtedly advantageous compared to other taxation regimes, it comes with a few limitations. In particular, in order to qualify for the regime, the services you offer must be limited in order for your property to be classified as a rental property; in other words, you will not be able to offer additional services besides cleaning and other services allowed and offered by Airbnb because if you do so, you will convert your accommodation into a fully-fledged hospitality business, which does not comply with Airbnb’s standards and, as such, you will be eligible to pay business taxes .

Therefore, as mentioned above, there are several aspects to consider when purchasing property and renting it on online rental platforms such as Airbnb. In this sense, an understanding of the legal requirements is essential in order to make a safe investment and maximize one’s investment returns. If you are interested in learning more about the topic and you would like further information, please contact our real estate experts and attorneys at info@italianrealestatelawyers.com. We will be happy to help you!

 

Italy is renowned as a tourist destination: it is home to a wide variety of breathtaking natural landscapes, such as snowy mountain peaks, beautiful hills and lakes, and stunning beaches with the clearest water; it is rich in music, history, culture and cuisine; it is also in a strategic geographical position and is thus well-connected to hundreds of cities in Europe and elsewhere. If you would like to relocate to Italy, enjoy your time in the country without any restrictions and perhaps purchase a property there, this article will provide you with information regarding a potential avenue you could pursue: applying for the Investor Visa, which can open the doors to fulfilling your Italian dream.

The Investor Visa, also referred to as the Golden Visa, was first introduced in Italy in 2017 with the 2017 Budget Law as an initiative of the Italian government to stimulate and promote foreign direct investment.

Who can apply for this type of visa?

The visa is designed for HNWI (High Net Worth Individuals) and more specifically for non-EU citizens who can invest  money in strategic assets for Italy’s society and economy. The Golden Visa program is valid for two years; however, it can be extended to three years. When the 5-year period of time has elapsed, the individual can apply for a long-term residency permit. The Italian government has established four categories applicants may invest in and the thresholds are as follows:  

  • Government bonds – € 2 million;
  • Italian limited liability company operating in Italy – € 500,000;
  • Italian start-up company – € 250,000;
  • Philanthropic donation – € 1 million.

There are other requirements one must meet in order to apply. In particular, investors need to provide the Italian authorities with proof that they hold the funds, and that they have clear criminal records. Investors cannot combine multiple categories to invest in; in other words, they may only select one among the four and invest in multiple areas within the chosen category. Investors have three months from their arrival in Italy to proceed with the investment; the advantage of this is that investors do not need to transfer their funds prior to their arrival in Italy.

The process to apply for the visa is quick and easy, and the application is also processed swiftly. In order to file an application, individuals need to create a personal account on the website of the Italian Ministry of Economic Development, they then need to fill in the forms and upload the required attachments, such as a copy of their ID, proof of financial resources, criminal records and any other supporting documentation. Finally, they need to sign a declaration and submit the application. If the application is complete, the Committee Secretariat will evaluate it and provide the applicant with an outcome within 30 days from the date of submission. If the application is approved, the Committee will issue a “Nulla Osta”, a certificate of no impediment which will give the applicant a maximum of six months to apply for the visa at the Italian embassy or consulate that covers the jurisdiction where the applicant resides; finally, the visa will allow the applicant to enter Italy within two years from the visa’s date of issuance. Once the investor enters Italy, he/she will need to go the “Questura” (police headquarters) within 8 days of arriving. The Questura will be responsible for providing the individual with a permit of stay, which is valid for two years starting from the date of entry to Italy.

It is worth mentioning that investor visa holders are required to carry out the investment throughout the 2-year period otherwise the permit may be revoked and no longer renewed. Among the benefits of applying for the investor visa is the possibility for its holders to travel to other Schengen countries, benefit from a special tax regime, access the Italian national healthcare system and extend the permit of stay to immediate family members.

Therefore, if you wish to move to Italy and you would like to be able to stay there beyond the 90-day limit which applies to non-EU citizens, invest in the country and potentially purchase property there, the investor visa can help you achieve your goal. If you would like more information about the application process, or further details about the Italian real estate market and the areas in Italy which are worth considering for your long-term investment, feel free to contact us for a free consultation. Our team of legal experts, real estate consultants and attorney will guide you through Italy’s great variety of prime locations. Please contact us at info@italianrealestatelawyers.com for further details.  We will be happy to help you!

 

Italy has everything one might desire, especially from a geographical point of view. In fact, the Italian peninsula is located in the centre of the Mediterranean Sea and it offers a great variety of landscapes: from mountains to valleys to dreamlike coastlines or volcanoes. Arguably, most of Italy’s landscape has always been rural, and this feature is reflected in the countless small and quaint towns in its countryside. In one of our previous articles we discussed the main differences between living in a big city in Italy and living in a small town; the aim of this article, instead, will be to introduce you to some of the most interesting areas –not the well-known nor the most popular ones – that you might want to consider if you are thinking of purchasing a property in the countryside. Please note that there is a great variety of spectacular countryside landscapes in Italy, some of which are rich in vineyards as well as rural villages with a welcoming and magical atmosphere.  It is beyond the scope of this article to discuss all of Italy’s countryside areas exhaustively, therefore, this article will focus on a few which we personally believe are worth discovering.    

Umbria is a region in central Italy; it is the only landlocked region on the peninsula. The region is mainly hilly, except for the area of the Sibillini Mountains National Park, which covers a predominantly mountainous area with beautiful valleys crossed by rivers, forests and gorges. Among the attractions in Umbria are Lake Trasimeno, which is the fourth largest lake in Italy, and the man-made Marmore Waterfalls, which are the second tallest in Europe (165m, 541 feet). These are just some of the reasons why the region has been nicknamed “Italy’s green heart”. From a historical point of view, Umbria has a lot to offer, especially in its quaint villages which were founded by the pre-Etruscan people and which later became Roman colonies. Among the cities that are worth visiting are Perugia, Città di Castello, Orvieto and Spoleto. In particular, Orvieto is famous for its 14th-century gothic cathedral which is home to Renaissance painter Luca Signorelli’s awe-inspiring frescoes in the Chapel of San Brizio. Under the town is a riddle of Etruscan-era tunnels and grottos which are 2,500 years old, and which were used throughout the years as siege escape routes, wine cellars and World War II bomb shelters. Gubbio and Assisi are also celebrated for their rich cultural heritage. In particular, Assisi is famous for being the birthplace of Saint Francis of Assisi, patron saint of animals and the environment. The Basilica of San Francesco remains an important Christian pilgrimage to this day. As for property prices, the average cost for a property in Perugia is about 1.402 €/m2, whereas in smaller towns near the provinces the cost is approximately 1.157 €/m2. In Orvieto the average price is 1.783 €/m2, whereas towards the southern part of the region the average price is 800 €/m2.

Sicily is another region with stunning landscapes, with its green pastures contrasting with its sparkling blue Mediterranean waters. Sicily is the largest island of the Mediterranean, its ancient name was Trinacria, which stands for “three promontories” that characterise the island. The island is separated from the Italian peninsula by the Strait of Messina and its coastline stretches over 1.000km approximately. Sicily was inhabited 10,000 years ago and its history is among the most fascinating in the country. Its strategic position in the Mediterranean, in fact, has made the island a crossroad of history and a melting pot of ethnic groups originating from the Greeks, the Romans, the Byzantines, the Arabs, the Normans and the Spanish, who all influenced not only the culture but also the architectural styles, which are now visible in every corner of the island, starting from the archaeological site of Valley of the Temples (Valle dei Templi) in Agrigento, to the cities of Palermo and Monreale. As for the average cost to buy a property, in the province of Palermo and in Monreale it is around $1,240 €/m2. In the southern part of the island in Val di Noto there are towns with baroque heritage which are now UNESCO sites, such as Modica, for instance, which is famous for its chocolate production; here, the average cost for a property is around 973€/m2, whereas in Noto it is approximately 1.375€/m2.

Finally, Apulia, in the southern heel of Italy, is known for its pristine beaches and fresh local food, but it has also become famous in recent years due to its charming white-washed towns like Ostuni, Locorotondo and Otranto with its quaint courtyards and balconies overflowing with flowers. Apulia is also famous for Alberobello and its peculiar Trulli, which are cone-shaped dwellings made with dry-stone and which are surrounded by the countryside and its thousand-year-old olive trees. The elegant city of Lecce, just half an hour away from the international airport in Brindisi, is famous for its intricate Baroque architecture, the “taranta” dance shows and the local craft of papier-mâché. As for property prices, the average cost for a property in the province of Foggia is 1.085€/m2. Generally speaking, prices are higher for properties by the seafront and they tend to decrease as you move away from the coastline. In Monte Sant’Angelo, for instance, the average price is approximately 1.070 €/m2, whereas in Sant’Agata di Puglia, which is in the countryside, the average price is around 459€/m2. On the other hand, in towns in the province of Bari, such as Ruvo di Puglia, prices are approximately 1.300 €/m2 and in Andria they are 1.200 €/m2. In Gioia del Colle and Putignano, which is famous for its Carnival, the asking price is around 1.000 €/m2, which is fairly similar to the asking price for properties in the province of Lecce.

Undoubtedly, when people picture the Italian countryside, they often think of Tuscany’s hills, but while the bucolic region is a must visit, this article has also sought to provide you with information about other spots that are worth exploring too. Please note that there are many other spectacular landscapes Italy offers beyond its cities with each one reflecting a particular need and taste, and ultimately allowing you to live a slower and quieter life whilst enjoying life in the picturesque towns and villages nearby. If you would like further information about purchasing a property in Italy, please feel free to contact us at info@italianrealestatelawyers.com for a free consultation. We will be happy to help you.

 

 

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