The vast majority of foreign nationals who have taken to purchasing and owning Italian real estate are from within one or another of the European Union nations. With that said, British investors have been particularly active in Italian property investments during the past five to ten years.
The prime real estate purchases by foreign nationals have been concentrated fairly heavily in the rural regions in recent years.
Investment Real Estate
While Italy has seen growth in the number of foreign nationals making real estate purchases since the inception of the EU, the same trend has also been seen across member nations of the European Union . The common marketplace that was formed with the development of the EU is widely recognized as the primary reason for this upswing in real estate buying and selling activity. Analysis has shown that a great deal of this movement in real estate in Italy involves the buying and selling of property for investment purposes.
A significant amount of real estate investment activity has involved two primary types of property: commercial or industrial property and multi-family properties that are used for residential and vacation purposes.
There are no real restrictions on foreign nationals purchasing real estate in Italy beyond a slightly higher purchase registration tax. This holds true for investment real estate as well as other types of real property in Italy.
Residential Real Estate – Single Family Dwellings
The biggest rush of residential property selling has occurred outside some of the major cities like Rome. Many foreign nationals have from other EU nations have been involved in this particular buying spree, purchasing homes and villas in rural areas of Italy for use as second homes. These people maintain that they are attracted to the easy going and relaxing lifestyle of rural Italy. (There have been some motion pictures in recent years set in such environments that many Italian real estate experts maintain have spurred the sales of rural residences in the Italian countryside.)
Residential Real Estate – Apartments
When it comes to finding private residences in the larger cities in Italy, apartments remain one of the most popular types of residential property bought and sold. Take for example the Rome real estate market. Apartments remain one of the most often conveyed forms of real property within the Italian capital. (Of course, the limited amount of living space and the ever growing population of Rome have combined to make apartments an invaluable residential asset in the city.)
Many foreign nationals have invested in apartments in the more major Roman cities over the course of the past decade for two primary reasons. First, these apartments are allowing them to have a second and oftentimes more affordable residence in one or another of the Roman major cities for their own use. Second, many people from other nations are purchasing these apartments in larger Italian cities to then be let or rented.
Generally speaking, investors purchasing apartments in Italy are renting to people who will be in Italy for an extended period of time on business. Some are also targeting these apartment rentals to individuals and families wishing to spend an extended vacation in one of the major Italian cities.
Vacation Real Estate
Vacation real estate remains a proverbial hot property in Italy at the present time. The demand for real estate in the major Italian resort communities have sent the costs of real estate in those communities through the roof. Even so, many of the more “well-healed” foreign nationals continue to seek nicely situated real estate in well recognized resort communities in Italy.
One of the other areas in which vacation real estate is selling at a brisk pace is in some of the more rural spots in Italy. As mentioned previously, many foreign nationals are taking to purchasing real estate and graceful homes in rural parts of Italy to be used as a second home. Likewise, many are purchasing real estate in more remote and rural areas of Italy for use as family vacation homes.
In addition to using these properties for their own personal holiday or vacation purposes, many of these same owners are leasing their properties to others during those times of the year when they are not occupying the properties themselves. As a consequence, many of these people have been able to make their vacation properties pay for themselves. Indeed, there are some foreign nationals who have gone so far as to purchase more than one residential property in different locations across Italy. These individuals are able to use one or another of these residences at different times during the year and let them out to others the remainder of the time. Many have found this type of investment to be profitable.
Successfully Purchasing Real Estate in Italy:Specific Steps to Buying Real Property in Italy
The real estate sales and purchasing process in Italy is fairly streamlined and not particularly complex. For the most part, a foreign national stands in the same shoes as does an Italian citizen, with one exception. When it comes to the purchase of real property in Italy, a foreign national must pay 11% purchase registration tax after the sale itself is consummated. An Italian citizen must only pay 4% purchase registration tax.
In Italy, the first step towards the purchase of real estate is the initial agreement between the parties. Once the initial agreement is signed and executed, there are some primary tasks that must be completed by the parties. For example, the buyer must obtain appropriate and sufficient financing. The seller must work to make certain that title to the property is free and clear of any and all encumbrances so that it can be conveyed to the buyer.
When the initial agreement is signed, the seller will post a deposit in the amount of at least 10% of the total purchase price of the real estate being sold. It is not uncommon in Italy for deposits to run as high as 50% of the overall purchase price of the property. Deposits in Italy tend to be higher than what is seen in many other countries around the world.
Generally speaking, the deposit is not refundable if the buyer simply decides that he or she does not want to buy the property. Indeed, the only real circumstances in which a buyer can obtain a refund of the deposit — even a hefty deposit of up to 50% of the purchase price — is when the buyer backs out of the deal or in circumstances when clear title to the real estate cannot be obtained within the time set forth in the initial agreement between the parties.
The real estate purchase process is overseen by a notary in Italy. The notary actually has more duties than is normally associated with a notary involved in real estate transactions in other countries the world over. For example, the notary in Italy is responsible for carrying out title searches to make certain that the title to the property is free and clear of any obvious defects or liens.
Many real estate experts in Italy recommend that a purchaser take the time to hire what is known as a geometra. The geometra will survey the physical boundaries of the property for sale to make sure that it actually does comport with what is listed on the legal description that is subject to a contract for sale. (Experts maintain that this is particularly important when it comes to older properties in Italy.)
The real estate purchasing process can take upwards of six months to complete in Italy. For this reason, unlike in many other countries around the world, it is a commonplace occurrence for a purchaser to move into residential property after the initial agreement is signed. In most countries around the world, the purchaser does not take possession of the property until the final agreement is executed and the deed to the property is transferred from the seller to the buyer.
If you are thinking of buying real estate in Italy, the best place to start is by visiting in person. Whether you are looking for a city apartment, a farm in the italian countryside or a villa by the sea, our travel experts can help you to plan the perfect buyer’s trip to Italy. Call 800.955.4418 to start planning today.