Are you an expatriate in Italy looking for the house of your dreams, the one that will accommodate your entire happy family? Or are you simply looking to invest in real estate in Italy and make a profit? There are many reasons to buy a house in Italy, and many mistakes to avoid. Indeed, many expatriates have rushed to buy their property in Italy and unfortunately had to face many difficulties, and sometimes significant financial losses. House seized after purchase, wrong estimation of real estate taxes, you have to be careful when buying a house or a property in Italy. What are the pitfalls to avoid when buying a property? What are the 5 mistakes not to make? Lisbob accompanies you in this wonderful adventure. Here are the 5 mistakes not to make when buying a house or property in Italy.
Not doing the necessary checks
Have you found the perfect home in Italy? Do not fall into the trap of not making the necessary verifications concerning the situation of the property in question from an urbanistic and cadastral point of view. In fact, it is always necessary to make sure that the property respects all the Italian laws concerning building permits for example, especially in the purchase of properties with a swimming pool, well or cabin. It is also necessary to verify that the property is authorized to receive the intended use. In order to avoid these problems, it is always necessary to check the original title deeds: in Italy one of the problems is the donation of real estate which can, in some cases, be revoked by the beneficiaries as well as the heirs. Another problem in Italy is the lack of full ownership of the property on the part of the seller and the existence of mortgages on the property.
Not checking for mortgages
Buying a house in Italy doesn’t have to be a nightmare. To avoid unpleasant surprises, consider asking your notary to verify that the current owner of the house you wish to acquire has no debts and that no mortgage has been placed on your future residence. This check is essential, for the peace of mind it will give you and for the hassle it will save you! A house pledged and it is your dream of living in Italy that flies away.
You can also go to a tax office to find out about the possible mortgage on your property in Italy, but this will involve long waiting hours. In the end, the notarial solution appears to be the most appropriate.
Buying a house in Italy will not have any secret for you
Forgetting to calculate taxes in advance
When you buy a house in Italy, in addition to the price of your property, you have to pay not only the notary fees and the various administrative procedures, but also the taxes on the property purchase. The payment of these taxes is mandatory and you risk heavy fines if you do not pay them. It is strongly advised not to underestimate the impact of these taxes when purchasing your property as it can impact your budget.
You will have to pay the following Italian real estate taxes:
Cadastral taxes;
Registration taxes (if the property is second-hand);
VAT (IVA in Italian) if the property is new;
Mortgage tax (about 2% of the amount of the property).
Each of these taxes has its own method of calculation, with different coefficients in different regions of Italy. Not paying attention to these taxes when searching for a property is already a serious mistake, as the amounts can represent a good percentage of the property’s value.
Not negotiating your mortgage
There are two options when it comes to choosing a mortgage to buy a home in Italy. On the one hand, you can take out a fixed-rate mortgage, and on the other, a variable-rate mortgage. Each has its advantages and disadvantages. The variable-rate mortgage is less expensive than the fixed rate mortgage but has more risks. With this type of mortgage, your bank indexes your interest rate to the European EURIBOR index (one of the main money market reference rates in the euro zone).
This means that they can decide to lower your interest rate when things are going well, but they can also decide to raise it when things are not! This was one of the reasons for the subprime crisis in the United States, and it is a gamble that, over the long term, can prove risky. If you’re not a gambler at heart, a fixed-rate mortgage will cost you a little more, but you’ll know in advance exactly how much you’ll have to pay back at the end of your mortgage. It is normal in Italy to see periods of fixed-rate mortgages for only a limited time (2, 4, 6, 10, 15 years), the rest of the period being again at variable rates.
What is certain is that you should not buy a house in Italy without first negotiating your mortgage. This is a big purchase and you can make real savings by competing with other banks to get as low a price on your mortgage as possible.
You can negotiate your mortgage in Italy
Thinking you can do everything on your own
Buying a house in Italy is an extremely important step in your expatriation. So don’t take the risk of getting it wrong. Lisbob is here to accompany you throughout your settlement in your new adopted country. Practical advice, opening gas and electricity contracts, and all the administrative procedures. Lisbob and their team will take care of everything, so don’t hesitate to contact them in order to make your dream of expatriation to Italy a reality.
