Italy: compatibility of holiday rental with condominium regulations

In Italy there are many tourist resorts. Even cities like Milan, Naples, Turin enjoy a remarkable tourist attendance. Real estate is not expensive, often less than 1500 € per square meter. On the other hand, demand for short-term rental in almost all the many tourist locations is growing. This is why more and more foreign Italian investors are buying apartments for short-term rentals, or holiday rentals. The compatibility of the holiday rental with the condominium regulations At the same time, there is also an exponential growth in neighborhood complaints from occupants of the same co-ownership to those who deal with this type of entrepreneurial activity. The rules: where are we in Italy? Despite the many legal interventions in this area, in our country, a precise orientation on the nature of b & b and short-term rental activities still seems to be lacking. As explained in a recent article by Sole 24 Ore, it is generally necessary to prohibit these activities in the stipulated co-ownership regulations or regulations; it can also be expressed by a resolution adopted by the co-owners with the consent of all the participants. The same procedure must also concern the resolution of the clause to be included in the current regulations prohibiting the co-ownership operation of this type of activity. In all cases, these are clauses that must be written clearly and explicitly. When, for example, the regulations prohibit the use of the property in question for activities other than residential, the possibility of proposing temporary rentals within the apartment is excluded. Anyone who wishes to use their property for temporary rental purposes should not rely solely on regional laws for the exercise of activities of bed and breakfast or vacation rental: he should   first take into consideration those relating to contractual regulations or conventional condominium by-laws, which override regional legislation.

Real estate investing, the most profitable Italian cities

Real estate sales in Italy are going through a positive phase, especially in the big cities. In recent years, regional capitals have seen an increase in the number of investment-related transactions, also thanks to the activity of holiday homes. This is confirmed by a recent survey carried out by the Tecnocasa group’s research department, which analyzed the trend of investment transactions from 2014 to 2018. From north to south, we find out which are the places where it is interesting to bet. Milan It is the city whose real estate market is the most lively. Suffice it to say that between 2014 and 2018, home sales to be allocated to income went from 15.3% to 26.4% and that 43% of commercial activities opened last year are vacation homes. The Center has always been the most attractive area for investors, but recently other areas have also attracted interest: for example, Lodi-Corse, where more than 44% of purchases are registered, and Gioia-Fulvio Testi, attractive for both tourists and university students of Bicocca. Turin Despite a slight contraction in 2018, investment transactions have increased by more than 5 percentage points since 2014, from 17.3% to 22.6%. Centro-San Salvario and France-Sao Paulo are the most popular areas for tourists and students. Verona A well-known tourist destination, the city of Romeo and Juliet recorded a considerable increase in its investment turnover, from 23% to 30.8% over a period of four years. The historic center is the main attraction, ideal for holiday residences: here, more than 67% of purchases concern real estate to generate income. Then we find the Borgo Roma-Golosine area, which guarantees a good annual yield thanks to reduced prices. Rome While the housing market has fluctuated in recent years, the demand for investment purposes has not decreased, quite the contrary: between 2014 and 2018, there was an increase of 4.7% mostly in the center, where every second purchase is for income. Interesting not only for tourists but also for workers in the Prati-Francia macro-region, the second most popular for investors. Naples It is the capital where the increase in investment purchases has been the strongest, due to lower prices per square meter and increased tourism. While in 2014, 28.9% of the buildings purchased were intended to generate income, they exceeded 40% in 2018. The most popular areas are the center, Posillipo-Chiaia-San Ferdinando and the district of Foria. Palermo More and more Italians, but not only, choose to buy a house in the Sicilian capital. Even after interventions aimed at improving its viability, the area of greatest interest to investors is the Center, which accounts for 44% of purchases for investment purposes. Follows the macro-region University-Brancaccio, thanks to the presence of the train station and the university. And Florence, Venice, Pisa? Well, there properties for sale are few and expensive …

Foreigners interested in holiday homes in Italy are increasing

Foreigners wishing to buy real estate in the tourist areas of our peninsula are on the rise. After years of crisis, during which only the most famous and prestigious places had seen the cost of real estate remaining stable, the desire to invest in holiday homes seems to have come back in recent months. In fact, Italians and especially foreigners who want to buy a property in the tourist areas of our peninsula to spend a few weeks relaxing and then make money from short rents are on the rise. Not just at the seaside The best-selling types of apartments are the classic two- and three-bedroom apartments, while the tourists’ favorite places have a twofold tendency: on the one hand, Lake Garda and the Amalfi Coast, which retain their appeal especially in the eyes of German and Scandinavian tourists; on the other, the small villages of the Tuscan hinterland and Liguria, which arouse more and more interest among the English and the Russians, who willingly give up the view of the sea in exchange for more tranquility. Investing in the city remains a guarantee Are purchases for rental purposes a good investment? Despite taxes on the second home, the yield also reaches 5 to 6%, although it is necessary to be careful before talking about a real boom. The most practical solution is to buy real estate located in major cities or universities and to be rented to tourists, students and young workers. Are purchases for rental purposes a good investment? Despite taxes on the second home, the yield also reaches 5 to 6%, although it is necessary to be careful before talking about a real boom. As for houses located near the sea, in the mountains or at the edge of a lake, in addition to taxes and management and maintenance fees, the change in the way people live their holidays, which have become shorter and more diversified, has a negative impact.

10 reasons to consider buying property in Italy

Here are ten reasons that could prompt you to buy real estate in Italy, and the caveats that follow. You enjoy the culture of Italy or of one of its regions and would like to explore it more in depth. Be careful, Italian culture varies a lot from one region to another; moreover, what woos you at a glance may turn up to dismay you in the long run. You have an hobby that you could practice more enjoyably if you had a base in Italy, thanks to its climate or other particular conditions. Just try to practice your hobby for sufficient time in Italy. You have a large family and would like basil for all of you in which to enjoy holidays together or apart. Are you sure your family members will continue to enjoy holidays in Italy? You have young children and would like to have a base for seaside holidays. Give your children a chance to experience a holiday at the seaside in Italy before deciding. You are thinking about ways to boost your retirement finances and think property has good long-term potential. Check out taxes and the possible fluctuations of the real estate market in Italy. You would like to work and live in Italy. Check everything out carefully: working conditions, social life, fiscal obligations, food, pollution, etc. You would like to retire somewhere with a warmer climate. Provided that you won’t feel alone without your friends. You have a lump sum to invest in think putting it in a property could be a safe option and produce regular income. Verify the state of the rental market, taxes and recurrent expenses. You’ve heard about huge potential for capital growth in some areas and would like a slice of the action. Be careful, real estate market fluctuates a lot in Italy in recent years. You think you would enjoy the challenge of property developing overseas. At your own risk.

Deposit of sale price of a house at the notary’s

How it works The Competition Act (No. 124/2017) prepared the ” Deposit of Price at the Notary’s”. The new legislation applies from 29 August 2018. The real estate negotiations must have started from that date. According to the law, first of all, the price must be deposited if at least one of the parties so requests, an agreement between the parties is not necessary. The money on the account of the notary can not be touched and the notary can affect it only for payment to the seller. The seller may not receive the money solely because of damaging events caused by the seller himself: mortgage, seizure. There are no other events that prevent the notary from giving the money back to the seller.  

Rental prices up 1.5% in the first quarter of 2019

According to the latest Idealist price index, the rental market ends in the first quarter with a rise in rents equal to 1.5%, an average of 9.2 euros / m2. In the last 12 months, rents in Italy are up 2.8%. For Vincenzo De Tommaso, head of the Idealist design office in Italy: “The positive moment of the rental market continues, even if the national rent card is more and more articulated and complex. In any case, the recovery is confirmed in the main cities, but also in the centers and localities where the strong demand for short-term, sometimes seasonal, rental, especially in the main destinations, can influence the normal price dynamics. For the rest, the market remains asphyxiated and suffers from legislative rigidities that do not protect the owners against arrears and risks, forcing many of them to keep their goods out of the market instead of accepting offers from potential tenants. Hence the need for greater regulatory clarity to promote the flexibility and dynamism of this market, the engine of development of the country. Rental market by region The first quarter of 2019 ended in positive territory for most Italian regions (13 out of 20), led by Sardinia (8.4%), Basilicata (6%) and Lombardy ( 5%). On the contrary, the biggest declines of the period are Piedmont (-3.2%), Molise (-3.4%) and Umbria (-4.5%). Rental market by city Among the capitals analyzed, the most important increases concern Cosenza (12%), Chieti (11%) and Agrigento (8.1%). The largest decreases were in Biella (-11.9%), Campobasso (-8.2%) and Como (-7.2%). Bari (6.2%) leads the uptrend in the large cities markets ahead of Cagliari (4.4%) and Milan (3.4%). The winter months show slight progress in Rome (1%), while Naples (-1.4%) and Turin (-1.6%) are reversing. Milan (18.8 euros / m²) remains the place with the most expensive square meters for rent, in front of Venice (16.2 euros / m²) and Florence (16 euros / m²), which precedes Rome (13.2 EUR / m²). The lowest rents in Italy are in Caltanissetta (3.9 euros / m²), which precedes Vibo Valentia and Reggio Calabria at 4.4 euros per month.

Sambuca (Sicily) – 1 Euro Houses for Sale

Call for bids Update On February 19th the Municipality has published a new call for bids (i.e., “Bando di Gara”, in Italian) for a second slot of properties in its historical district. The new slot includes 16 properties. A brief description of these properties, including few pictures and indicative site plans, are available on the Municipality’s website at: http://www.comune.sambucadisicilia.ag.it/Case%20a%201%20euro/Immobili%20a%201%20euro.htm On the same webpage, the Municipality has made available a document, in both Italian and English versions, describing the rules governing submission of bids and final assignment of the properties. The English version of the document can be found at: http://www.comune.sambucadisicilia.ag.it/Case%20a%201%20euro/Bando%20case%20ad%201%20Euro%20-%20English.pdf Similarly to the prior call expired in May 2018, properties are assigned based on a silent auction with a starting price of 1 €, with participating bidders submitting their private offers and the highest bidder winning the property. The new deadline for submitting the bids is April 19th 2019 by 1pm. Given the high visibility and foreign interest that this initiative has been recently attracted, our firm is currently committed to offer professional assistance to anyone interested in submitting bids to the call. We are offering support in all steps of the process, from forwarding additional professional pictures of the properties on sale as well as preparing the required documentation for the bids. We are also committed to assisting the auction winners in the preliminary contractual stage with the Municipality and presenting the necessary renovation project within 90 days from the preliminary contract. Please, don’t hesitate to contact us at info@studiolegalemagaraggia.it for further info.

This is why Italian real estate continues to depreciate

Old houses and short-term rent boom: this is why Italian real estate continues to depreciate. While new properties are seeing rising prices, existing real estate continues to decline, a unique case among emerging economies. Why? On average, in the first three quarters of 2018, compared to the same period in 2017, house prices fell by 0.6%. Existing home prices (over 80 per cent) are down 1.0 per cent and new homes are up 1.2 per cent. Compared to the 2010 average, the first year for which the historic series of housing price index is available, housing prices fell 16.7% in the third quarter of 2018, due exclusively to existing housing that has slid by 22.9%, while new housing has seen an overall increase, although low (+ 0.2%). The rate of change in the housing price index for 2018 is negative and equal to -0.5% . Curious reality: housing prices started to fall, but at the same time, trade continues to increase. As the law of supply and demand teaches, the price of the most demanded commodity starts to increase, precisely because there are more and more people wishing to buy it. Apparently, in Italy, this law does not work. But only in appearance: actually, in Italy only buy those who can afford it: those who have a stable job, who sell their property, or the parents for their children. With the complicity of interest rates on mortgages that are at a historical low in this period. It remains nonetheless that, despite the recovery of 2015, sales are still far from pre-crisis levels. The data released by ISTAT, the National Institute of Statistics, are quite true, but it is not quite true that Italian real estate depreciates. In fact, in the third quarter of 2018, the value of new homes increased by 1.2% compared to the same period of the previous year. And in the second quarter, the increase was 1.4%. The problem lies in the existing houses. This is due to many factors, including a physiological devaluation, because in recent years, the price of these properties had increased too much, and the fact that Italians maintained on average very few homes. The price of a house that has never been renovated collapses. Whoever buys wants a beautiful house, but on the market, he finds mainly ugly ones. The result can be twofold: either you do not buy, or you do it at reduced prices, because the buyer has to take into account the costs of the restructuring. Indeed, the new houses, built in the city, are selling well and even quickly. The increase in rentals To depress the real estate market, there is also another factor: Italians are starting to rent again. Conventional 4 + 4 contracts are on the rise, but there has been a boom in short-term rentals especially in large cities, or in tourism. A house that, a few years ago still, would have been on sale is now rented, perhaps on platforms like AirBnB – and it’s clear that, if I remove a stock of well-maintained properties in an excellent position, the average quality of homes for sale decline. Real estate in Italy, a unique case Italy is still lagging behind the most advanced economies. Because in the rest of Europe and in the world, the real estate market started to recover from 2012 to return to pre-crisis levels in some cases. According to data from the BIS (Bank of International Settlements), between the end of 2017 and the end of 2016, in the most mature economies, the price of real estate rose by 3% in real terms. Future scenarios The situation remains that of a depressed market. In Italy, most people over 65 own one or more properties. When these people die, a generation of Italians will inherit. But this stock of homes is destined to end up on the market, both because not everyone has the means to keep them and the number of houses will be higher than the number of people who inherit them. The result? The price of real estate will go down. According to the President of Scenari Immobiliari, it is only a matter of time: the real estate market in Italy depends on inflation. As soon as it resumes, even housing prices will rise. Provided that the construction sector is also taken over. So far, the recovery has been observed only in Milan.

2019 house improvement reductions in Italy

Higher rates confirmed for retrofit deductions and energy savings. Tax relief also for furniture and new gardens. One more year to renovate the house with a maxi-reduction of 50%. From construction works to equipment, the finance law has postponed all deadlines to 12 months. Slip also for the ecobonus, for which it is possible to implement energy saving measures by recovering 65% on the Irpef. Renovations. The 50% rate provided for the deduction for exceptional maintenance and renovation work will therefore apply to all expenses by the end of the year. Maximum ceiling for each apartment confirmed at 96,000 euros. The deduction allowed even if the payer is the cohabiting partner of the family member, and in the case of de facto couples. Indispensable to use the dedicated bank on which you must expressly indicate the tax code of the person who will use the deduction. In fact, banks have the obligation to communicate these data to the tax authorities in order to refine the precompiled declaration, so that the creation of text only contains these data. We must therefore pay the utmost attention to the establishment of the transfer. In case of energy saving interventions paid with the transfer for renovations such as change of lighting, purchase of air conditioners or gas boilers, photovoltaic panels, pellet stoves, you must also send a communication to ENEA on the site dedicated to renovations, within 90 days of completion of the work. The mobile bonus. Who renovated the house last year or is about to do it now can also count on furniture and appliances. In this case, the maximum cost is 10,000 euros and must take into account what you have already spent last year for the same apartment. Compulsory payment with traceable instruments (bank transfer, credit card, debit card), but it is not necessary to use a bank transfer dedicated to restructuring. Anyone who buys appliances (oven, refrigerator, washing machine, hotplates) must send the communication to Enea within 90 days of purchase. The green bonus. For those who decide to refurbish the walk or terrace, the specific facilitation is in effect, namely the deduction of 36% on a maximum expenditure of 5,000 euros. Even those who have the “green thumb” will have to turn to a gardener, because facilitation is not allowed for DIY work, for example the simple purchase of plants and planters, but only for the renovation of green places to create new gardens, install irrigation systems. In these cases too, payment is required with traceable instruments but not with a dedicated bank transfer. Ecobonus. Another 12 months to take advantage of 65% or 50% reduction rates for energy saving interventions The higher rate applies to jobs that provide higher savings, such as insulation, the replacement of heating systems by condensing boilers equipped with thermo-valves, solar panels. 50% bonus instead for new appliances, sun protection, biomass boilers. In this case also, for the obligatory payments, the transfer dedicated to the ecobonus and the deduction inserted directly in the pre-filled declaration. The condominium works. With the same rules are also confirmed the tax breaks condominium works, including the green premium. In this case, however, all the bureaucracy is charged to the administrator.

House purchase by auction: the first home bonus is valid

The application for tax relief for the purchase of the first house must be made before the transfer order. Buying an auction house can be a big plus. With the online auction portal, you can stay informed of the progress of judicial sales of all assets attached or for which bankruptcy proceedings are ongoing. Research may be limited to houses located in a specific geographic area and within specific price limits. You should almost never participate in the first sale because, in the event that the auction is deserted (that is, in the absence of bidders), at subsequent auctions, the judge may order a reduction of 25%. This is certainly a speculative attitude that is in the end very often the goal of those who buy at auction. In addition to the normal rebate in relation to the market price, home buyers can also benefit from the first housing bonus, ie the tax advantage reserved for those who buy real estate – the first real estate – in the municipality where they have their home or transfer it 18 months after the purchase. A recent decision of the Sondrio Provincial Tax Commission confirmed this. The pronunciation has the important merit of establishing what you need to do to use the first home bonus on the auction purchases. Let’s see more in detail what was said. We do not need to repeat, in this article, all aspects of tax relief for the first home, including the IMU exemption, the property tax. Just remember that it applies to those who have never benefited from the same bonus before and have no other property in the municipality where the house to buy is located. You can get the bonus if you transfer your home within a maximum of 18 months from the purchase in the municipality where the house is located. The first home bonus Does the first home bonus apply to real estate purchases at court auctions? When claiming the first home home bonus for forensic sales? The first home bonus The bonus brings a significant advantage in terms of paying taxes. If the seller is an individual or a company that sells VAT-free, you pay: Proportional register fee of 2% (instead of 9%); Fixed mortgage tax of 50 euros; Fixed register tax of 50 euros. If the seller is a company, with a sale subject to VAT (typical of the manufacturer), you pay: VAT reduced to 4% (instead of 10% VAT for buildings A / 1, A / 8 and A / 9 is 22%); Fixed registration fee of 200 euros; Fixed mortgage tax of 200 euros; Fixed register tax of 200 euros. Does the first home bonus apply to real estate purchases at court auctions? The first house bonus also applies to those who buy a property at auction at the courts. But beware: in order to benefit from the subsidy, it is necessary that the application to benefit from the benefit is presented before registration of the transfer decree with the relevant tax agency. Later, it is impossible to get the bonus. This is the clarification provided by the Sondrio CTP. When to apply for the first house bonus for judicial sales? The judge pointed out that auctions can certainly benefit from the first housing subsidy if the taxpayer declares that he wants to make use of the facilitation at the same time as he asks to be auctioned. This declaration can therefore also be inserted later, with a supplementary act, even after the publication of the decree of transfer, but with the insurmountable delay of the moment of registration of this decree with the Revenue Agency. On this point, the Supreme Court also agrees that it has adopted the same interpretation in the past. Therefore, if the application for use of the bonus is submitted after the registration of the transfer decree, there is no longer any possibility of obtaining the tax benefit.