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BUYERS' MARKET IN SPAIN

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BUYERS' MARKET IN SPAIN


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Your Questions Answered

I T A L Y

 

 

WHEN DO YOU HOLD ROADSHOWS AND HOW SUCCESSFUL ARE THEY?

Let's Live Abroad! hold up to seven shows every week. This gives you a chance to speak to someone face to face about living abroad. (Call us on 0845 22 55 777, or drop in to our offices). Some of our agents are from the country you are seeking to buy property; have bought property themselves, or are well versed in the challenges you will face in owning a home abroad. Let’s Live Abroad! is an overseas member of the National Association of Estate Agents (NAEA).

 

I'VE SEEN A NEW HOME ON YOUR WEBSITE. CAN I GET IT CHEAPER BY NOT BUYING THROUGH LET'S LIVE ABROAD?

No. Your home is offered at the lowest list price by agreement with the builder. Walking off the street and buying direct at the lowest list price advertised can often lead to you spending more on 'extras'. With resale properties the procedure is exactly the same as buying or selling through an estate agency in the UK. So, when it comes to finding the best sites and properties, why waste your petrol when you can use ours?

 

SO HOW DO I BUY A HOME IN ITALY?

If you don't have the necessary finances and you don't want to re-mortgage or arrange a bridging loan and you don't have 50% of the purchase price of a new-build available, you will need to sell your home before you can purchase in Italy. Once you have seen the right property, a deposit of €3,000 (approximately £2,000) will usually reserve a property and allow the lawyer to conduct checks on the property before you sign the Preliminary Contract (Compromesso). Just in case you see a property, ensure you can transfer the deposit from your bank or take a credit card or cash to this amount with you to Italy. The best way to transfer money is with a foreign exchange company. Our preferred foreign exchange company is Global Currency Exchange Network. Now you can transfer money into Euros whenever you want. And it costs you nothing to set up!

Now the surveyor (Geometra) - who doesn't check the condition of the property like in the UK - confirms plans have been properly approved and the building is on land appropriate for this use. Once you get a written report from your lawyer, and provided the checks are satisfactory, you then sign the Preliminary Contract and pay 10% of the price of the resale, or something like 30% if it is new-build or 'off-plan'. Stage payments can vary. Once the property is finished and your lawyer has arranged for the taxes to be paid and all snagging has been corrected to your approval, the Final Contract and Title Deed (Rogito) is signed. In the case of a resale, you pay 10% and make the final payment after approximately 30 days. You now own your property and the lawyer can register this at the Land Registry. Allow 16 weeks. Remember, new build is usually cheaper but takes longer to complete. When you buy a resale it is usually offered furnished, with limited guarantee and with the aim of making the vendor a profit.

 

CAN I GET MY DEPOSIT BACK?

No. The 3.000,00€ (£2,000) reservation fee which is paid when purchasing a property in Italy is not refundable neither transferable. Originally, if a client wanted to cancel a property, lets say, "A", and transfer the deposit to a second property, let's call it "B", this was permitted by paying an extra 1.000,00€ towards the second property in order to cover the costs for having had to produce a second fideiussione. Since this fideiussione at reservation stage does not apply anymore, the 3.000,00€ reservation fee will not be refunded or transfered to another property should you cancel or decide to buy another property.

 

WHAT OTHER COSTS SHOULD I WATCH OUT FOR?

Always more than you plan for! It is recommended you set aside 16% of the price of the property to cover lawyers' fees, Land Registry fees. Notary fees, taxes and bank charges.

 

WHAT ARE THE ANNUAL RUNNING COSTS?

As a rough guide, the annual costs for running a two/three bedroom property will be between £1,000 and £2,000 including water, gas, electricity, local rates, community fees and house and contents insurance.

 

CAN I GET AN ITALIAN MORTGAGE?

Yes. Take with you evidence of income like payslips or accounts if you are self-employed or are buying as a company. You can usally borrow up to 75% of valuation. There are not as many UK banks in Italy as Spain, but since 2005, things have been changing and the Italian banks are getting a shake-up. Loans are based on an ability to pay. Lenders like a debt ratio of below 35% of net income. Non status mortgages are difficult to come by and most lenders will expect mortgages to be paid by the time you are 70.

 

CAN I LIVE IN ITALY PERMANENTLY?

Yes, but first you need an Italian tax code called a Codice Fiscale. Once you have this you will be able to open an Italian bank account, purchase property and open a business in Italy. You can obtain one at Italian tax offices (expect queues) or from the Italian consulate in the UK. The address of the Italian Consulate General is 38 Easton Place, London SW1X 8AN ambasciata.londra@esteri.it. Remember to enclose your name, address, place and date of birth and a copy of your passport.

 

WHAT DOCUMENTS DO I NEED TO BUY IN ITALY?

We can ensure that all the necessary arrangements are made to see you have the correct documentation to buy a property in Italy. The Permesso di Soggiorno, (PdiS) is your residency permit. It is the equivalent of registering yourself with the police. (You do this unwittingly every time you hand over your passport in a hotel). You can do this yourself if you want to by picking up an application form at the local police station (guestura). You also need five passport-sized photos, copies of your passport, a tax stamp (marca da bolla) from a Tabacceria (tobacconist) displaying a black 'T' on the outside, a rental or purchase contract for your property, a photocopy and proof of medical insurance or registration with the Italian health service, (SSN) and a record of your fingerprints (which would have been done at the guestura). If you are planning to work you will need additional documentation for the PdiS for Work, (Permesso di Soggiorno per Lavoro Subordinato). This includes a letter from your employer, proof of income, proof from your employer that they are making contributions in your name at the Instituto Nazionale di Previdenza Sociale, (INPS), your Partita IVA (Italian sales tax ID), proof of registration with the Registro Esercenti Commercio (business register), any necessary permits to do the type of business you are wanting to do and proof of registration at the unemployment office (Centro del L'impiego).

The Carta di Soggiomo is another residency permit much like a 'Green Card' but doesn't have to be renewed every two years like the Permesso di Soggiorno unless you are using it for indentification.

 

DO I NEED TO BE IN ITALY TO COMPLETE ON MY PROPERTY?

Yes, but if it is not possible, Power of Attorney can be given to someone attending on your behalf. Your lawyer can arrange this for you.

 

CAN MY MONEY BE TRANSFERRED IN AND OUT OF ITALY FREELY?

Yes. Our preferred foreign exchange company Global Currency Exchange Network can set up an account for you. Call us on 0845 22 55 777 for more information. You may find they will be able to offer you a rate better than your own bank!

 

WHOSE NAME CAN I BUY PROPERTY IN?

In your own name, joint names, in the name of a limited company, names of adult children or someone who stands to inherit your property.

 

SHOULD I MAKE A WILL FOR MY PROPERTY?

Ideally, yes. You can have a Will just for your Italian assets without replacing the one you have prepared in your own country. Most Italian Wills are signed at the Notary and are private and confidential.

 

DO YOU PAY INHERITANCE TAX IN ITALY?

There is what is called Succession Tax. In 2001 the Italian Parliament abolished Inheritance and Gift Tax. The new regulation of Gift Tax means no tax is levied on gifts between spouses and other relatives to the limit of the fourth degree of relationship. Where the beneficiary is not related to the donor, Gift Tax will be payable if the asset transferred is worth more than approximately €180,000. In this instance the Imposta di Registro tax payable is the value of the asset exceeding the above amount.

 

IS IT TRUE THAT YOU DON'T HAVE TO PAY CAPITAL GAINS TAX?

In a sense this is true, but there are exceptions. In most countries, if you sell a house in that country, you are liable to pay their tax on your profit. The tax on that profit is called Capital Gains Tax. In Italy you will have to pay Capital Gains Tax on your profit if you sell your property within five years from the date of your purchase. However, it is possible to choose a fixed taxation rate (currently 20% of the Capital Gain) with a declaration in front of the public Notary. There are some situations where you do not pay Capital Gains Tax: If you have owned the property longer than five years; if the property has been received as an inheritance; the property has been received as a gift and five years have passed since the deed of sale, and if the property has been used as a principal residence by the vendor or their relatives. Check with your Notary. Laws change!

 

I'VE BOUGHT A NEW PROPERTY BUT IT'S NOT FINISHED AND I'VE SOLD MY PROPERTY IN THE UK.

No problem. You won't be homeless. We will help you find rented accommodation until your new property is ready, so you can start enjoying your life in the sun.

 

SHOULD I USE A UK SOLICITOR?

Not unless they are qualified in undertaking the conveyance of overseas property. Even then, they would still have to use an Italian lawyer. If you choose to use an Italian lawyer, don’t worry, you will still receive all documentation in English.

 

CAN I STILL RECEIVE MY PENSION IN ITALY?

Of course, pension and benefits can be paid directly into your Italian bank account.

 

WHAT DO I DO IF I WANT TO WORK?

Anyone from the EU who has a valid passport, becomes a resident and has obtained a Tax and Social Security number can work without a permit. You can place advertisements in the Italian press, enrol with an international recruitment agency or look for work on the Internet.

 

I WANT TO SEND MY CHILDREN TO SCHOOL IN ITALY?

International schools will cost, but state schools are free. Education is compulsory between six and 16. Nursery (Scuola Materna) is both private and public, Primary (Scuola Elementare) is between the ages of six to 10, Secondary (Scuola Media) is between the ages of 11 – 13 and High School (Scuola Superiore) is between the ages of 14 – 18 where students have a wider choice of classes from science to fine arts; classical to modern languages and opportunities to prepare them for work. To enrol children you will need a birth certificate, health records (with details of immunisations) and school reports from any previous schools.

 

CAN I TAKE MY CAT OR DOG?

Of course. The Italian consulate will need to stamp and approve Fluffy’s health certificate from an authorised vet issued within 15 days of departure which must include a certificate of vaccination against Rabies and a certificate declaring your pet has been kept in an area free from animal diseases. The number of the Pets Travel Scheme in the UK is 08702 411710.

 

WHAT IS DRIVING IN ITALY LIKE?

Allow yourself a few days to get used to driving on the right. The roads can be busy in August when it seems like the whole of Rome is heading for the coast but it’s worth the few extra Euros toll charge to use the motorway.

 

WHAT IS ITALIAN HEALTHCARE LIKE?

Once you have your residence permit you can register with the local authority, the L’Unita Sanitaria Locale, (USL) to obtain your national health number from the Italian national health system, the Servizio Sanitario Nazionale, (SSN) which enables you to register with a local doctor, (Medico convenzionato). When you pop along to the surgery (ambulatorio), be prepared to wait, they don’t usually do appointments. Contact the British Embassy for English-speaking doctors in your locale. The healthcare is generally better than that available in the UK but stays in hospital are usually shorter. Before you travel, make sure you have your European Health Insurance Card with you to enable you to receive free healthcare whilst abroad. Private health care is comparatively inexpensive and could be a great benefit.

 

WHAT IS THE ELECTRICITY SUPPLY?

220 volts AC with a frequency of 50Hz. Bring an adaptor to plug in your appliances, especially for your favourite juicer which will soon be busy turning all those lovely citrus fruits into delicious smoothies!

 

WHAT ABOUT SERVICES LIKE ELECTRICITY AND WATER?

Your lawyer will ensure all services are connected to your new property but it is useful to set up a direct debit mandate with your Italian bank to make utility payments. After the bank has stamped them; take them to your lawyer.

 

CAN I RENT MY PROPERTY OUT?

Yes. You can have this arranged through a reputable company, although some major developments already offer this service. Agencies usually offer a key holding and management service for a monthly fee. This is useful when your friends go over to rent your property and you can arrange to have it all cleaned and ready for them. Don’t forget you must declare any rental income to the Inland Revenue.

Buying-to-let can afford some great opportunities since the Italians head south in the summer to enjoy their holidays in Calabria. The British market is expanding all the time as holiday companies are opening up this area. You could expect something like £700-a-week for a two bedroom property here in the summer, but get some advice on your inspection visit. According to The Mail on Sunday, here in the UK, if you invested in a property to let out in 2000, you would, on average be looking at a 133% return by 2007! (By comparism, a savings account might have got you 39% and the stock exchange around 5.8%).

 

DOES YOUR BROCHURE SHOW EVERYTHING AVAILABLE?

No. Keep an eye on our database. New properties come on all the time. Establish whether you are serious about buying in Italy, then call Let's Live Abroad! on 0845 22 55 777 to arrange an inspection tour. If you are an investor wanting to reserve off-plan properties, call 0141 229 1693 (00 44 141 229 1693).

© Let’s Live Abroad! 2007