Italy’s real estate is among the most aged in Europe. More than half of the existing houses are over 50 years old. Despite their age, most of them are solid. In regions like Liguria, there are even some that date from the beginning of the 20th century, which are still very robust. I was recently in Sanremo, where a real estate agent explained to me that all the buildings in the old town had withstood all the earthquakes, unlike the buildings of new construction. Indeed, these are buildings whose walls easily exceed 30 cm in thickness. This has advantages for thermal insulation, especially in summer, when they are significantly cooler than modern houses. So there are a lot of houses to renovate available for purchase.
Is buying a house to renovate a good investment?
To date, the answer is yes, at least according to an analysis of Corriere della Sera, one of the most prestigious Italian daily newspapers. Let’s see why buying a property to renovate can be an attractive option.
Tax bonuses and minimum rates
The tax benefits on extraordinary maintenance work on residential buildings have also been extended for 2020: this means that for expenses of up to 96 thousand euros, you are entitled to an Irpef deduction (income tax on natural persons) by 50%, spread over ten years. This percentage can go up to 65% for energy retrofit works.
In addition, there is a particularly positive situation on the mortgage front: interest rates at historically low levels provide access to very favorable financing conditions.
How much do you save?
According to the Nomisma Observatory, the savings would be considerable, even taking into account the amount to be allocated to the works. In Milan, for example, almost 80,000 euros would be saved to buy an 80 m² apartment to renovate compared to a house ready to be lived in.
In principle, the Irpef advantage significantly affects the choice of buyers when the price difference between the house to be renovated and that already habitable is at least 30 thousand euros.
Without forgetting another factor of interest for potential buyers: the 2020 finance law increased the IRPEF deduction from 50% to 90% for painting and renovating facades. An initiative that stems from the desire to encourage the redevelopment of the residential heritage of many Italian cities.