Practical tips for buying in Italy
1. Are you eligible to buy property in Italy?
While Italy has long been a popular country for overseas property hunting Brits, the UK’s decision to leave the EU has created a slight degree of uncertainty over whether the process will be as straight forward in the near future. Currently, buyers from outside of the EU or the European Economic Area (EEA), can only buy a home in Italy if that country has a reciprocal agreement in place which allows Italians to buy a home in that country. Countries like the United States and Canada have such an agreement in place, and, while there is no guarantee, it is likely the UK will as well. One potential impact that Britain leaving the EU could have on buying a home in Italy is that mortgages could become higher to obtain. Non-EU purchasers are often deemed higher-risk by lenders in the country than those from inside the EU. Whether British buyers will fall into this ‘higher risk’ category once the UK finally completes its divorce from the Union remains to be seen.
2. Why do you want to buy an Italian property?
Are you looking for a holiday home? A property with investment potential? An abode to live in at a later date? Your own individual reason for your purchase should play a huge part in your investment decision. If you’re looking for a property with investment potential, research which areas have property markets which have performed consistently well in previous years. Check out whether there are any events happening that could lead to increased demand for property. Likewise, if you are seeking a holiday home, take a look at the climate for the area in which you wish to buy, and try to find out exactly how busy your desired location is during peak – and off-peak – season.
3. Can you stay in Italy?
If you are looking for a permanent home in Italy, then you will need to check that you are allowed to stay in the country. EU residents from any member state have the automatic right to reside in the country. As do those from the EEA countries.
However, with the UK set to leave the EU completely in the next year or so there is no guarantee that Brits will be allowed to stay in Italy indefinitely under the freedom of movement act – as is currently the case. Brits may conceivably need to apply for a visa to remain and a Blue Card to work in the country.
Preference to EU citizens in terms of job opportunities may also be exercised, so much is likely to depend on the outcome of the exit negotiations as to how Brits will find themselves placed with regards to living in Italy.
Feel free to talk to Halo Financial Consultant for further information.
4. Have you thought about where in Italy you want to live?
While the Internet is undoubtedly an invaluable tool for research, there is nothing quite like checking out an area for yourself. A fact-finding trip is almost essential prior to purchasing a home. You can see for yourself what the neighbourhood is actually like; get a feel for the place; check out how close it is to the local amenities and public transport. Just because an agency may say that the house is located minutes away from the beach, doesn’t mean it definitely will be. It’s the agencies’ job to make the property look good; it’s your job to check that it really is as good as they say. Find out how to find a good real estate agent.
5. Do you have a set budget? It’s important to have an idea in your mind of how much your property will cost – in total – and how you will be paying for it. A clear idea of budget helps you set specific goals and will mean you can make the most of any funds you have available to find the right property. Buying a property in Italy could mean you will have to exchange your currency to Euros, which given the weakness of the Pound since 2016’s Brexit announcement, right up until the time of writing (July 2018) is something you will need to keep an eye on.
6. Are you aware of extra charges and hidden fees that you may need to pay?
Beware additional charges when purchasing a house in Italy. Property fees in Europe are regarded as one of the highest in Europe. If you are a non-resident, you should typically allow between 9-15 per cent of the purchase price to cover all taxes and fees. However, depending on the area you are buying in, the price of the property and whether it is a new-build or old property, it could be higher. If you are a resident, the ‘hidden’ fees may be slightly less – potentially between 7-10 per cent. Never buy a property in Italy without seeking legal advice first, and possibly even advice from an independent financial adviser.
Halo Handy Hint
As exchange rates move quickly it’s important to understand the effect this can have on the price of your property and to protect any currency exchanges you make while currency markets are in flux. With this in mind, it is worth considering currency specialists, such as Halo Financial, as opposed to banks, as such firms can offer more detailed guidance and more competitive exchange rates.