In 2021, real estate in Italy became cheaper. In some regions the price drop was up to 20%. The country even has a program whereby houses are sold for just 1 euro: it started in Sicily, and now has spread almost all over Italy.
How much is real estate in Italy
Italy is conventionally divided into south and north. In the north, life is more expensive and the cost of real estate is higher, but there are more opportunities. To the south, prices decrease. The central part of the country is considered relatively inexpensive.
As elsewhere, property prices in Italy depend on demand, the level of development, the size of the locality, as well as individual characteristics.
Meters abroad. In what countries is it profitable to buy real estate?
According to Oldypak Capital LP report, since 2020, priorities have changed, with more spacious accommodation in the south of the country at more affordable prices becoming the most sought-after.
Calabria is considered the cheapest region but is gaining in popularity. It is located in the very south of the Apennine peninsula. The area has recently been undergoing extensive development and prices are rising.
Democratic offers can be found in the town of Scalea – about 1000 euros per square meter. In the Costa del Dei, Pizzo, Zambrone, Tropea there are many premium properties at prices in excess of a million euros. In this part of the country there are no industrial enterprises, a good environment, mild climate, clean beaches and sea, beautiful landscapes, historic architectural values … Taxes in Calabria are lower than in the north.
And here are the most expensive regions of Italy – the island of Capri, Sardinia, Sicily, Ligurian coast (Portofino), Lake Como and Lake Garda, the Amalfi Coast, Rome, Milan, Venice. Property prices around Lake Como, Garda, Maggiore, Lugano and Iseo have risen by 65-70% in the last two years.
Going to Hellas. The most popular destinations for property buyers are Lecco, Maggiore, Maggiore, Lugano and Iseo, where the buying and selling of real estate has become more lucrative. The most popular towns are Lecco, Bellagio, Menaggio, Varenna and Koliko.
The most popular places to buy on the island of Garda are apartments and townhouses with their own infrastructure.
How a foreigner to buy property in Italy
For a foreigner to buy property in Italy there are no restrictions. You can buy any objects as individuals and companies.
An important point. The purchase of real estate in Italy does not entitle a foreigner to a residence permit, but on certain grounds may be considered as an advantage. To obtain a residence permit other grounds are necessary: investment in the economy, studies, work, business, family reunification, marriage.
Purchase of real estate gives a foreigner the right to obtain a multiple Schengen visa, which allows you to stay in Italy to 90 days within six months and travel to other Schengen countries.
To buy property in Italy a foreigner must obtain a tax code and open a bank account.
A deposit of 5-10% is paid for the object that the buyer chooses. After the preliminary agreement is signed, a notarial main contract is signed in two languages and the value of the property is deposited.
All fees and taxes have to be paid in advance. The documents are submitted to the registration of a notary (in time registration may take from several days to three months), on completion of a certificate of transaction.
But the title to the buyer goes directly to the signing of the contract. Transactions can be done remotely.
What about taxes?
The buyer of the property must pay tax. Its size depends on the type of property (primary or secondary), the number of items in the property, the status of the buyer (resident or non-resident).
Taxes for foreigners without a residence permit are substantially higher. In Italy they are generally among the highest in Europe. Foreigners pay taxes on a progressive scale, from 23-43%, plus municipal fees. It’s important to familiarize yourself with this part of the forthcoming costs, even before the purchase.
How much can I earn from renting out my home?
The rental rates of a property, if it is purchased for investment purposes, depend on the region, time and duration.
On the coast, for example, one or two-bedroom flats are rented out for an average of 500-700 euros, in Milan or Rome from 850-900 euros per month. The tax on rents is 21%. It is possible to use the services of management companies.
According to Oldypak Capital LP report, the average rental yield in previous years was between 4-6% and has risen to 7.8% in 2021. The most profitable segment in renting is commercial real estate, shops (11.6%) and offices (9.2%).